Personal Watercraft Coverage WT 05 01

Watercraft Agreed Value Coverage WT 05 02

Watercraft Joint Ownership Coverage WT 03 01

Watercraft Additional Insured – Lessor WT 03 02

Watercraft Increased Limits Towing and Assistance Expense Coverage WT 03 03

Watercraft Haul Out Expense Coverage WT 03 04

Uninsured Watercraft Coverage WT 04 01

Personal Watercraft Coverage WT 05 01

The Personal Watercraft coverage endorsement is designed for jet-skis and similar craft. The endorsement shows "personal watercraft" as a defined term but does not define it. The definition can be found in the Watercraft Policy WT 00 01 [IDL:WT 00 01 01 10.pdf^WT 00 01 01 10^WT 00 01 01 10]. "Personal watercraft" is defined as a recreational watercraft powered by an inboard motor with its primary source of energy being a water-jet pump, and is capable of carrying one or more people in a sitting, standing or kneeling position. This is your basic jet-ski.

The endorsement begins with a schedule – a description of the watercraft is needed, whether or not the passenger hazard is excluded, and desired coverages for each watercraft listed.

Definitions

I. Definitions

The definition of "your covered watercraft" is replaced by the following:

"Your covered watercraft" means:

1. Any "personal watercraft" shown in the Schedule or in the Declarations.

2. Any "personal watercraft" on the date you become the owner. This provision applies only if you:

a. Acquire the "personal watercraft" during the policy period; and

b. Ask us to insure it within 14 days after you become the owner.

3. Any "personal watercraft" you do not own while used as a temporary substitute for any other "personal watercraft" described in this definition which is out of normal use because of its:

a. Breakdown;

b. Repair;

c. Servicing;

d. Loss; or

e. Destruction

Analysis

This section defines "your covered watercraft". Covered watercraft are "personal watercraft" listed in the schedule or the declarations, and newly acquired "personal watercraft" on the date the insured becomes the owner only if acquired during the policy period and the insured asks for it to be covered within fourteen days of acquisition. Also included are "personal watercraft" the insured does not own but that are used as a temporary substitute for the covered "personal watercraft" because the covered vehicle is out of use due to breakdown, repair, servicing, loss or destruction.

Liability Coverage

II. Part A – Liability Coverage

Part A is amended as follows:

A. The definition of "insured" is replaced by the following:

"Insured" means:

1. You or any "family member" for the ownership, maintenance or use of "your covered watercraft".

2. Any person using "your covered watercraft".

3. For "your covered watercraft", any person or organization but only with respect to legal responsibility for acts or omissions of a person for whom coverage is afforded under this Part.

B. The Exclusions Section is amended as follows:

1. Exclusion C.2.a. is replaced by the following:

We do not provide Liability Coverage for the ownership, maintenance or use of any "personal watercraft" owned by you or any "family member". However, this Exclusion C.2.a. does not apply to a "personal watercraft" insured for Liability Coverage under this endorsement.

2. The following exclusion applies under Part A to any "personal watercraft" for which the Schedule indicates that the passenger hazard is excluded:

We do not provide Liability Coverage for any "insured" for "bodily injury" to any person while occupying, or while being towed by, the described "personal watercraft".

Analysis

The liability coverage modifies the definition of insured to include the named insured or "family member" for the ownership, maintenance or use of the covered craft, as well as any person using the covered craft, or any person or organization but only with respect to legal responsibility for acts or omissions of a person for whom coverage is provided under this section. This is similar to the liability section of the auto policy, which provides coverage for organizations using the vehicle but only as far as their legal responsibility for covered acts. If the insured lets the youth group from church use his jet ski at a youth group outing and a youth accidentally injures another person, that injury is covered.

The exclusions section removes liability coverage for "personal watercraft", then adds it back as long as the coverage is listed on the endorsement. Remember this endorsement attaches to the watercraft policy which is designed for boats, not jet skis and similar personal craft.

If the passenger hazard is indicated as excluded on the schedule, then there is no liability coverage for any "insured" for "bodily injury" to any person while occupying or being towed by the described "personal watercraft". For example, the insured buys a personal watercraft and intends to use it for himself only, and doesn't intend to carry a passenger or use it for towing individuals on saucers or tubes. He opts to exclude the passenger hazard. Later on in the year the insured has friends with teenagers over and two of the teenagers ride the craft at the same time; the passenger is tossed off the vehicle and is injured. Because the passenger hazard was excluded, there is no coverage for those injuries to the passenger.

Medical Payments

III. Part B – Medical Payments Coverage

Exclusion B.1. is replaced by the following:

We do not provide Medical Payments Coverage for any "insured" for "bodily injury" sustained while "occupying" a "personal watercraft" owned by you or any "family member". However, this Exclusion B.1. does not apply to a "personal watercraft" insured for Medical Payments Coverage under this endorsement.

Analysis

Again, coverage under medical payments is excluded and then excepted. Coverage for medical payments is excluded for any insured for injuries received while "occupying" a "personal watercraft", but if the endorsement indicates that medical payments coverage has been selected, then coverage does apply.

Watercraft Agreed Value Coverage WT 05 02

As will be seen with many of the watercraft endorsements, this one starts with a schedule. A description of the craft is required as is the desired limit of coverage and deductible.

With respect to the coverage provided by this endorsement, the provisions of the policy apply unless modified by this endorsement.

PART D – COVERAGE FOR DAMAGE TO YOUR WATERCRAFT

With respect to loss to covered property described in the Schedule or in the Declarations for which a specific premium indicates that Watercraft Agreed Value Coverage is provided, Paragraph D. Limit Of Liability under Part D is replaced by the following:

D. Limit Of Liability

1. Our limit of liability for loss will be the lesser of the:

a. Amount shown in the Schedule or in the Declarations; or

b. Amount necessary to repair or replace the property with other property of like kind and quality.

2. If a repair or replacement results in better than like kind and quality, we will not pay for the amount of the betterment.

Analysis

This endorsement allows the insured to cover the vehicle at an agreed value between the insured and the carrier. While it is insured at an agreed value, the limit is still the lesser of the agreed amount or the amount necessary to repair or replace with like kind and quality. If the replacement is better than like kind and quality, the betterment is not paid for.

An insured schedules a watercraft for $80,000. The vehicle is totaled, and a replacement boat of like kind and quality can be found for $75,000. The carrier will pay $75,000, even though the boat was scheduled for $80,000 since that is the lesser amount. If the replacement boat was $85,000, then the insured would receive the scheduled amount of $80,000. If the boat is an older, discontinued model and the only replacement is a better grade model that costs $90,000 then again only the $80,000 will be paid.

Watercraft Joint Ownership Coverage WT 03 01

The schedule for this endorsement schedules other owners of the craft.

The provisions of the policy apply unless modified by this endorsement.

DEFINITIONS

Paragraph A. is replaced by the following:

A. Throughout this policy, "you" and "your" refer to:

1. The named insured shown in the Declarations;

and

2. Any other person shown in the Schedule or in the Declarations.

Analysis

This endorsement is used when a craft is owned jointly by two or more people. The individuals are listed in the schedule, and the form states that "you" and "your" includes those listed on the schedule as well as the named insured.

Watercraft Additional Insured – Lessor WT 03 02

This endorsement schedules a watercraft leased to the insured, and provides coverage for the lessor as an additional insured. Liability, medical payments, uninsured coverage and physical damage coverage are available.

Any liability and any required coverages afforded by this policy for "your leased watercraft" also apply to the lessor named in this endorsement as an additional

insured. This insurance is subject to the following additional provisions:

1. We will pay damages for which the lessor becomes legally responsible only if the damages arise out of acts or omissions of:

a. You or any "family member"; or

b. Any other person except the lessor or any employee or agent of the lessor using "your leased watercraft".

2. "Your leased watercraft" means:

a. The:

(1) Watercraft;

(2) Outboard motor; and/or

(3) Watercraft trailer;

shown in the Declarations or in this endorsement which you lease for a continuous period of at least six months under a written agreement which requires you to provide primary insurance for the lessor; and

b. Any substitute or replacement:

(1) Watercraft;

(2) Outboard motor; and/or

(3) Watercraft trailer;

furnished by the lessor named in this endorsement.

3. If we terminate this policy, notice will also be mailed to the lessor.

4. The lessor is not responsible for payment of premiums.

5. The designation of the lessor as an additional insured shall not operate to increase our limits of liability.

Analysis

This endorsement provides liability and any required coverages to the lessor as an additional insured. If the lessor becomes legally responsible for damages that arise out of acts or omissions of the named insured, family members, or any other person other than the lessor, employee or agent of the lessor, those damages are covered if the covered watercraft was used.

"Your leased watercraft" is defined as the watercraft, outboard motor and or trailer shown in the declarations or the schedule which the insured leases for six continuous months or more where the insured is required to provide primary insurance for the lessor. If the insured is not required to provide primary insurance coverage, then this endorsement does not apply.

Also included as leased watercraft are substitute or replacement watercraft, outboard motors and or trailers that are furnished by the lessor listed in this endorsement. If the vehicle develops a mechanical problem and needs repair and the lessor provides the insured with a substitute vehicle, that substitute vehicle is covered as well.

If the policy is terminated by the carrier the lessor will be notified, and the lessor is not responsible for premium payments. Listing the lessor as an additional insured does not increase the limit of liability.

Watercraft Increased Limits Towing And Assistance Expense Coverage WT 03 03

Like any vehicle, watercraft can breakdown and need to be towed or have emergency repairs made suddenly. This endorsement provides coverage for such instances. The watercraft must be scheduled and described, with a limit for towing and assistance per disablement and the premium.

With respect to the coverage provided by this endorsement, the provisions of the policy apply unless modified by this endorsement.

PART D – COVERAGE FOR DAMAGE TO YOUR WATERCRAFT

B. Additional Coverages

With respect to loss to "your covered watercraft" described in the Schedule or in the Declarations for which a specific premium indicates that Watercraft

Increased Limits Towing And Assistance Expense Coverage is afforded, Paragraph B.2. under Part D is replaced by the following:

2. Towing And Assistance Expense Coverage

If "your covered watercraft" becomes disabled, we will pay reasonable expenses incurred by you for:

a. Towing to the nearest place where necessary repairs can be made;

b. Delivery of gas, oil or repair parts, but excluding the cost of these items;

c. Labor for emergency repairs at the site of disablement; or

d. "Watercraft trailer" roadside repair if the trailer is covered by Part D of this policy.

The most we will pay for any one disablement is the Limit of Liability shown in the Schedule or in the Declarations.

This coverage is additional insurance. No deductible applies to this coverage.

Analysis

The watercraft policy provides up to $500 for one disablement, with a maximum of $1,000 for any policy period. This endorsement allows the insured to increase that amount. If the covered craft becomes disabled, reasonable expenses incurred for towing to the nearest place that can make repairs, delivery of gas, oil or parts but not the cost of the items themselves, labor for emergency repairs at the site of disablement, or trailer roadside repair if the trailer is included on the policy. If the craft runs out of gas and the gasoline costs $100 and the delivery of the gas costs $50, then $50 is what is paid, the cost to deliver the gas to the boat. Likewise the cost of repairs at the site are covered. This is additional insurance, and no deductible applies.

Watercraft Haul Out Expense Coverage WT 03 04

Some areas of the country are prone to hurricanes, and this endorsement provides coverage to haul the boat out of the water. The watercraft and premium are shown in the schedule.

With respect to the coverage provided by this endorsement, the provisions of the policy apply unless modified by this endorsement.

PART D – COVERAGE FOR DAMAGE TO YOUR WATERCRAFT

A. Additional Coverages

With respect to a covered watercraft described in the Schedule or in the Declarations for which a specific premium indicates that Watercraft Haul Out Expense Coverage is provided, the following provision is added:

Haul Out Coverage

We will pay reasonable expenses incurred by you to have the watercraft:

1. Hauled out of the water when the National

Weather Service issues a:

a. Hurricane watch; or

b. Hurricane warning

for the area where the watercraft is located;

and

2. Launched in the same general area after the hurricane watch or warning has ended. The most we will pay for the haul out and launch of any watercraft in any one hurricane watch or warning is $500.00.

This coverage is additional insurance. No deductible applies to this coverage.

Analysis

When the National Weather Service has issued either a hurricane watch or warning for the area the watercraft is located in, reasonable expenses are paid to haul the watercraft out of the water and to launch it when the watch or warning has ended.

The most that is covered is $500 for the hauling out of any craft for any one watch or warning. This is additional insurance with no deductible.

Uninsured Watercraft Coverage WT 04 01

Not everyone is a responsible boater, and there are those on the water who have no insurance. This endorsement allows the insured to protect himself from such individuals by providing coverage when the insured is injured as a result of an uninsured boater. Coverage is shown in a schedule at the beginning of the endorsement.

With respect to the coverage provided by this endorsement, the provisions of the policy apply unless modified by this endorsement.

PART C is replaced by the following:

PART C – UNINSURED WATERCRAFT

COVERAGE

A. Insuring Agreement

1. We will pay compensatory damages which an "insured" is legally entitled to recover from the owner or operator of an "uninsured watercraft" because of "bodily injury":

a. Sustained by an "insured"; and

b. Caused by an accident.

The owner's or operator's liability for these damages must arise out of the ownership,

maintenance or use of an "uninsured watercraft".

Any judgment for damages arising out of a suit brought without our written consent is not binding on us.

2. "Insured" as used in this Coverage Part means:

a. You or any "family member".

b. Any other person "occupying", or when towed by, "your covered watercraft".

c. Any person for damages that person is entitled to recover because of "bodily injury" to which this coverage applies sustained by a person described in 2.a. and 2.b. of this definition.

3. "Uninsured watercraft" means a watercraft of any type:

a. To which no bodily injury liability bond or policy applies at the time of the accident.

b. Which is a hit-and-run watercraft whose operator or owner cannot be identified and which hits:

(1) You or any "family member";

(2) A watercraft which you or any "family member" are "occupying";

(3) "Your covered watercraft"; or

(4) A person being towed by "your covered watercraft".

c. To which a bodily injury liability bond or policy applies at the time of the accident,

but the bonding or insuring company:

(1) Denies coverage; or

(2) Is or becomes insolvent.

However, "uninsured watercraft" does not include any watercraft or equipment:

a. Owned by or furnished or available for the regular use of you or any "family member".

b. Owned or operated by a self-insurer under any applicable watercraft law, except a selfinsurer which is or becomes insolvent.

c. While located for use as a residence or premises.

d. Owned by any governmental unit or agency.

Analysis

The insuring agreement states that coverage is provide when an "insured" is injured by an accident with an owner or operator of an "uninsured watercraft". "Insured" is the named insured, family members, and others occupying or towed by the covered watercraft.

An "uninsured watercraft" is defined as a watercraft of any type to which no bodily injury liability bond or policy applies at the time of accident, or a watercraft which is a hit-and-run, where the operator or owner cannot be located after the accident occurs. Also, an "uninsured watercraft" includes a vessel to which a liability bond or policy applies, but the bonding or insuring company denies coverage or becomes insolvent. Not considered an "uninsured watercraft" are vessels owned or furnished for the regular use of the insured or family members, or are owned or operated by a self-insurer under applicable watercraft law unless the self-insurer becomes insolvent, if the craft is used as a residence or premises, or if the craft is owned by any governmental unit or agency. If the insured is struck by a coast guard boat, that is not considered uninsured, even if the coast guard denies coverage for the injuries to the insured.

B. Exclusions

1. We do not provide Uninsured Watercraft Coverage for "bodily injury" sustained:

a. By an "insured" while "occupying", or when struck by, any watercraft owned by that "insured" which is not insured for this coverage under this policy. This includes a "watercraft trailer" of any type used with that

watercraft.

b. By any "family member" while "occupying", or when struck by, any watercraft you own which is insured for this coverage on a primary basis under any other policy.

c. By any "insured", if that "insured" or the legal representative settles the "bodily injury" claim and such settlement prejudices our right to recover payment.

d. By you or any "family member" while "occupying" "your covered watercraft" while it is being:

(1) Used as a public or livery conveyance;

or

(2) Hired for charter.

e. By any "insured" using a watercraft without a reasonable belief that that "insured" is entitled to do so. This Exclusion 1.e. does not apply to a "family member" using "your covered watercraft" which is owned by you.

2. This coverage shall not apply directly or indirectly to benefit any insurer or self-insurer under any of the following or similar law:

a. The Jones Act (Maritime Law);

b. Any workers' compensation benefits;

c. Any Federal Longshore and Harbor Workers' Compensation benefits; or

d. Other similar benefits.

3. We do not provide Uninsured Watercraft Coverage for punitive or exemplary damages.

Analysis

Excluded from coverage are watercraft for which the insured has not selected this coverage, including a trailer. Unless the insured adds this endorsement to provide uninsured coverage to a particular craft, a craft not listed on the endorsement is not covered.

If a family member is struck by a craft owned by the insured and covered under another policy that provides primary coverage, there is no coverage here. If the insured or his legal representative settles an injury claim and that settlement prejudices the carrier's right to recover payment, there is no coverage.

As is typical, coverage does not apply if the craft is being used as a public or livery conveyance or has been hired for charter. If the craft is being used by an insured who does not have a reasonable belief that he is entitled to use the craft there is no coverage, unless it is a family member using the covered watercraft owned by the insured.

Any insurer or self-insurer that is covered by the provisions of The Jones Act, workers' compensation benefits, Federal Longshore and Harbor Workers' Compensation benefits or other similar benefits are not covered here. Coverage is not provided for punitive or exemplary damages.

C. Limit Of Liability

1. The limit of liability shown in the Schedule or in the Declarations for Uninsured Watercraft Coverage is our maximum limit of liability for all damages sustained in any one accident.

This is the most we will pay regardless of the number of:

a. "Insureds";

b. Claims made;

c. Property or premiums shown in the Declarations;

or

d. Property involved in the accident.

2. No one will be entitled to receive duplicate payments for the same elements of loss under this coverage and Part A or Part B of this policy.

3. We will not make a duplicate payment under this coverage for any element of loss for which payment has been made by or on behalf of persons or organizations who may be legally responsible.

4. We will not pay for any element of loss if a person is entitled to receive payment for the same element of loss under any of the following or similar law:

a. The Jones Act (Maritime Law);

b. Any Workers' Compensation benefits;

c. Any Federal Longshore and Harbor Workers'

Compensation benefits; or

d. Other similar benefits.

Analysis

The limit of liability section is straightforward. Regardless of the number of insureds, claims made, property shown in the declarations or property involved in an accident the listed limit is the most that will be paid out for all damages in any one accident.

Duplicate payments will not be made under different sections of the policy, and if payment has been made by those legally responsible duplicate payment will not be made for that loss. If the person is entitled to coverage from The Jones Act, workers' compensation benefits, Federal Longshore and Harbor Workers' Compensation benefits or other similar benefits there is no coverage.

D. Other Insurance

If there is other applicable insurance available under one or more policies or provisions of coverage that is similar to the insurance provided under this

Part of the policy:

1. Any recovery for damages under all such policies or provisions of coverage may equal but not exceed the highest applicable limit for any one watercraft under any insurance providing such coverage on either a primary or excess

basis.

2. Any insurance we provide with respect to a watercraft you do not own, including a "nonowned watercraft", shall be excess over any collectible insurance providing such coverage on a primary basis.

3. If the coverage under this policy is provided:

a. On a primary basis, we will pay only our share of the loss that must be paid under insurance providing coverage on a primary basis. Our share is the proportion that our limit of liability bears to the total of all applicable

limits of liability for coverage provided on a primary basis.

b. On an excess basis, we will pay only our share of the loss that must be paid under insurance providing coverage on an excess basis. Our share is the proportion that our limit of liability bears to the total of all applicable

limits of liability for coverage provided on an excess basis.

Analysis

When other insurance also applies to craft insured on this policy, recovery for damages cannot exceed the highest applicable limit for any one craft under any policy on either a primary or excess basis. If there are two policies in force, one for $50,000 and one for $60,000 then the largest possible payout is $60,000, not a combination of the two limits.

Coverage for craft the insured does not own is excess over insurance that is primary for that vessel. If coverage is under this policy on a primary basis, then only that share that must be paid under the primary coverage will be paid. Coverage is the proportion of liability the coverage bears to the total of all applicable limits for primary coverage.

When this policy provides excess coverage, then only the share that must be pad as excess is covered. Again, the carrier's share is the proportion that their liability bears to the total of all applicable limits of coverage on an excess basis.

E. Arbitration

1. If we and an "insured" do not agree:

a. Whether that "insured" is legally entitled to recover damages; or

b. As to the amount of damages which are recoverable by that "insured";

from the owner or operator of an "uninsured watercraft", then the matter may be arbitrated.

However, disputes concerning coverage may not be arbitrated.

Both parties must agree to arbitration. If so agreed, each party will select an arbitrator. The two arbitrators will select a third. If they cannot agree within 30 days, either may request that selection be made by a judge of a court having jurisdiction.

2. Each party will:

a. Pay the expenses it incurs; and

b. Bear the expenses of the third arbitrator equally.

3. Unless both parties agree otherwise, arbitration will take place in the county in which the "insured" lives. Local rules of law as to procedure and evidence will apply. A decision agreed to by at least two of the arbitrators will be binding as to:

a. Whether the "insured" is legally entitled to recover damages; and

b. The amount of damages.

Analysis

Under this form arbitration can be used not only when the insured and carrier disagree as to the recoverable amount of the loss, but also when they disagree as to whether or not the insured is legally entitled to recover damages. Coverage disputes still may not be arbitrated. Once the parties agree to arbitration each side selects an arbitrator, and the aribitrators select a third. If they cannot agree within thirty days either may request that a judge make the selection. Each side pays its own expenses and they split the expenses of the third arbitrator. Arbitration is to take place in the county the insured lives in unless both parties agree otherwise. A decision by two arbitrators will be binding as to whether the insured is legally entitled to damages and the amount of said damages.

PART E – DUTIES AFTER AN ACCIDENT OR LOSS

The following provision is added:

1. A person seeking Uninsured Watercraft Coverage must also:

a. Promptly notify the authorities if a hit-and-run watercraft is involved.

b. Promptly send us copies of the legal papers if a suit is brought.

Analysis

The duties after a loss are standard. Authorities must be notified if a hit-and-run watercraft was involved, and the insured is to promptly send the carrier copies of legal papers if a suit is filed.