Boat Sinking and Loss of Personal Property

An insured's boat sank and the personal property on the boat was lost. The insured's boat policy only had $500 coverage   for personal property, and the insured collected that amount from the boat insurer. However, there was more than $500 worth of personal property on the boat. The insured put a claim in for the rest under his homeowners policy and this claim was denied by the carrier.

The insurer contends that it insures for accidental direct physical loss to personal property caused by the named perils in the policy. Direct physical damage caused by vehicles is a covered peril. The insurer agrees that a boat can be considered a vehicle, but in the subject claim the personal property was not damaged by a vehicle, rather the boat sunk which allowed water to damage the personal property. The insurer claims that there is no other peril named that would apply to this type of direct physical damage.

Our contention is that the term vehicle is undefined and unlimited, and that the insured gets the broadest possible interpretation. There is no exclusion for “sinking and stranding” in the policy; further, there are no special limitations on vehicles. Should coverage apply.

New Hampshire Subscriber

The homeowners policy does not define or limit the peril of vehicle damage in any way. Webster's Ninth New Collegiate Dictionary defines “vehicle” as “a means of carrying or transporting something.” A boat is certainly a vehicle. When the insured's boat sank, his personal property suffered vehicle damage. The loss is payable under the homeowners policy.