Motorized Snowmobiles Form
Includes copyrighted material of Insurance Services Office, Inc., with its permission.
June 2, 2015
Like golf carts, motorized snowmobiles are their own special type of property. Not really an automobile, but not normal personal property or yard equipment, they are in a class of their own. Therefore an inland marine form is the best way to provide coverage. ISO inland marine form PM 00 34 is designed to provide coverage for motorized snowmobiles, their trailers and equipment.
Topics Covered:
Covered property
Newly acquired or replacement property
Deductible and loss conditions
Snowmobiles are another category that fall into a no man's land of insurance. They are neither automobiles nor yard equipment, but they can't be treated as personal property like a lawn mower. They travel over land during the winter when snow is on the ground, so their use is seasonal. They may or may not travel on roadways depending on weather conditions, but they're not registered for road use. The homeowners form provides some coverage but it is very specific and under only certain circumstances, such as servicing the residence premises, as long as that is its sole purpose. The liability exception that covers snowmobiles designed for recreational use off of public roads covers snowmobiles owned by an insured only if used on the residence premises, other parts of the premises shown in the dec or acquired during the policy period, on part of a premises not owned by an insured where an insured is temporarily residing, on vacant land owned or rented to an insured, or part of a premises occasionally rented to an insured for other than business use. There are a lot of gaps not covered that warrants special coverage.
PART I – PHYSICAL DAMAGE COVERAGE
A. Covered Property
1. Owned Property
We cover the property listed in the Schedule above and described in a., b., c. and d. below only if an amount of insurance and premium is shown for that property.
The amounts of insurance shown are limited by Paragraph E.1. Loss Settlement in this form.
a. "Snowmobile" Defined
The following definition is added specifically to this form and does not alter the definitions
in Common Policy Provisions Form PM 00 01:
"Snowmobile" means a motorized land conveyance, described in the Schedule above, including permanently installed accessories, equipment or parts, that is:
(1) Designed to transport one or two people on snow-covered ground;
(2) Not built or modified after manufacture to exceed a speed of 50 miles per hour
on level ground;
(3) Owned by an "insured" or leased to an "insured" for at least 30 consecutive days; and
(4) Used only for personal pleasure.
Analysis
Like the golf cart form, property on this form must be scheduled, and give the manufacturer, year build, model and serial or motor number. Scheduled property includes the snowmobile itself, trailers for the snowmobile, scheduled and unscheduled equipment. Like most personal property coverages, this form covers scheduled property while it is anywhere in the world as long as it is shown on the schedule. The loss settlement provisions are described later in the form; this form does not use the provisions in the common provisions form.
Snowmobiles are then defined as a motorized land conveyance including any permanently installed equipment that is designed to carry one to two people, used only for personal pleasure, owned or leased to an insured for at least thirty consecutive days, and not built or modified to exceed fifty miles per hour on level ground. Note that equipment permanently installed is considered part of the snowmobile itself; equipment that is detachable or that is not permanently installed would be covered separately under scheduled equipment or the blanket coverage. Again the snowmobile must be owned or leased for thirty consecutive days; if the insured is doing an around the world vacation and staying at various ski resorts, and leases a snowmobile for two weeks at various resorts, those snowmobiles are not covered. The snowmobile must be leased to the insured for at least thirty consecutive days.
b. Trailer
A trailer is a two or four wheeled apparatus designed to be pulled by a motorized land conveyance and used to transport a "snowmobile" over public or private roads. Such apparatus:
(1) Shall be owned by an "insured" or leased to an "insured" for at least 30
consecutive days; and
(2) May be required to be registered for use on such roads.
c. Scheduled Equipment
Scheduled equipment includes detached and detachable accessories, equipment or
parts, each with a cost new value of more than $250 that are:
(1) Used for or with a covered "snowmobile" or trailer; and
(2) Owned by an "insured"; or leased to an "insured" for at least 30 consecutive
days.
d. Unscheduled Equipment – Blanket Insurance
Unscheduled equipment includes detached or detachable accessories, equipment or
parts owned by an "insured" that are used for or with property scheduled under Item
1.a., b. or c.
Analysis
The form then goes on to define trailers, scheduled and unscheduled equipment. Trailers are those designed to transport any type of equipment, but are used by the insured to transport the snowmobile over public or private roads. If the insured has his own personal snowmobile and likes to take that to various trails, the trailer he attaches to his vehicle to tow the snowmobile would be covered under this form. The trailer must be owned or leased to the insured for at least thirty consecutive days, and the trailer may be required to be registered on public roads. This allows the insured to use one trailer for multiple vehicles such as snowmobiles and atvs, but schedule it under this policy so it is covered.
Scheduled equipment is defined as equipment that is or can be detached from the cart and has a value of more than $250; smaller equipment does not need to be scheduled, and the carrier does not want an extensive schedule of small dollar items. Again, the equipment must be used with either the snowmobile or the trailer, and must be owned or leased to the insured for thirty consecutive days. The carrier does not want to be involved with the insured leasing items for a short period of time, then trading them in for another type of item for another short period, and so forth. In order for there to be coverage, the insured must commit to the type of equipment he wants to cover.
Unscheduled property may be covered on a blanket basis, and there is no need for an elaborate definition. Unscheduled equipment is the same as scheduled equipment; detachable accessories with no minimum dollar amount, that are used with either the snowmobile, trailer, or scheduled property.
.
Newly Acquired or Replacement Property
2. Newly Acquired Or Replacement Property
a. Newly Acquired Property
(1) We will cover a snowmobile, trailer or equipment that you acquire, by
ownership, during the policy period if it is:
(a) Similar to a "snowmobile" or scheduled trailer or equipment; and
(b) An acceptable risk to us.
(2) The limit for this coverage is the cost of the item to you up to:
(a) $5,000 for the snowmobile;
(b) $1,000 for the trailer; and
(c) $500 per item for the equipment.
b. Replacement Property
If, during the policy period, you dispose of a "snowmobile" or scheduled trailer or equipment, we will cover similar replacement property that you acquire by ownership up to:
(1) The amount of insurance of the disposed property; or
(2) The invoice cost of the replacement property;
whichever is less.
c. Reporting Requirement
You must report the transaction to us within 30 days of taking ownership and pay any additional premium from that date.
If you fail to do so, coverage will cease automatically 30 days after you take ownership or at the end of the policy period, whichever occurs first.
Analysis
There are special conditions for when an insured acquires a new snowmobile, trailer or equipment. Not only are there limits as to the value of new equipment that will be covered, but the form states that that property must be an acceptable risk to the carrier. Unfortunately, the form does not explain what an acceptable risk is, so the producer and insured are left to their own devices to determine just what is acceptable. The limits are $5,000 for a new snowmobile, $1,000 for a new trailer, and $500 per item for equipment. As many brand new snowmobiles are over $6,500 at a basic level, this is not much coverage. An insured should notify the carrier immediately when purchasing a new snowmobile so it can be scheduled and properly covered. If the old snowmobile is traded in for a new snowmobile, then the lesser of the amount of coverage on the old snowmobile or the cost of the new snowmobile is what will be paid in event of a loss. Again, in order for a spiffy new snowmobile to be properly covered, the insured needs to notify the carrier right away. If the insured trades in an older snowmobile for a new snowmobile and does not notify the carrier within thirty days, there is no coverage on the snowmobile. If the policy period ends before that thirty days is up, then coverage ends then.
3. Borrowed Or Rented Snowmobile
We also cover a motorized snowmobile that an "insured":
a. Borrows and operates with the permission of its owner; or
b. Rents for less than 30 consecutive days;
provided it is similar to a covered "snowmobile".
The most we will pay for loss to the borrowed or rented snowmobile is the lowest amount of insurance shown under Item 1.a. in the Schedule.
Analysis
Borrowed or rented snowmobiles are set aside separately. When an insured borrows or rents a snowmobile, coverage is provided for that snowmobile up to the lowest amount of insurance for snowmobiles on the schedule. The snowmobile must be similar to a covered snowmobile of the insured's, used with permission of the owner, or rented for less than thirty consecutive days. If the insured owns two snowmobile, one worth $3,000 and the other worth $8,000 and the insured borrows a snowmobile worth $6,000 and that snowmobile is destroyed while in the insured's custody, only $3,000 will be paid out, as that is the lowest amount of insurance on the insured's schedule. Again the form has some ambiguous requirements; the borrowed or rented snowmobile must be similar to a covered snowmobile. That is a broad statement and open to interpretation; what the insured considers similar to his snowmobile and what a claims adjuster might consider to be similar to the insured's snowmobile could easily be two different things. Remember, in any cases of ambiguity, the insured gets the benefit of the doubt.
B. Property Not Covered
We do not cover contraband or property in the course of illegal transportation or trade.
Analysis
Contraband and illegally transported property is of course excluded. This must be the shortest property not covered section ever written. While this gives the impression of true all perils coverage, it is not that easy. There are exceptions to the perils insured against that remove coverage for certain perils and situations, as will be discussed in the next section.
C. Perils Insured Against
1. We insure property described in the Schedule against risk of direct physical loss except loss by collision or loss precluded in 3. below.
2. If the Schedule shows that the Collision Peril applies, we also insure against the risk of collision meaning:
a. The physical contact of a covered " snowmobile " or trailer with another object; or
b. The upset of such " snowmobile " or trailer without contact with another object.
3. We do not insure:
a. Loss while covered property is:
(1) Rented to others;
(2) Being used to carry persons or cargo for a charge; or
(3) Being operated in or practicing for any prearranged or organized race, speed
contest or other competition;
We do insure against loss that results solely from the perils of fire or lightning;
b. Loss to covered property used in any activity engaged in for money or other compensation.
c. Loss to tracks or wheels caused by contact with the road or ground, or an object lying on the ground;
d. The infidelity of persons or entities to whom you entrust covered property. But we will pay for loss caused by or resulting from a carrier hired to move or transport such property;
e. Loss caused by or resulting from:
(1) Wear and tear, gradual deterioration or modification;
(2) Fungus, mold or rot;
(3) Corrosion or rust;
(4) Latent defect, inherent vice or any quality in property that causes it to damage
or destroy itself;
(5) Electrical, mechanical or structural failure or breakdown;
(6) Freezing or overheating;
(7) Dampness of the atmosphere or extremes of temperature;
(8) Work done to or handling of covered property unless fire or explosion ensues
and then we will pay only for the ensuing loss;
(9) Marring, scratching, chipping or denting, unless caused by or resulting from sudden and accidental impact with another object not under the control of an "insured";
(10) Your failure to maintain the covered property in good condition and repair so that it is not damaged by the rigors of normal use;
(11) Vandalism or Malicious Mischief if the premises where covered property is kept or stored has been unoccupied for more than 60 consecutive days immediately before the loss;
(12) Animals, birds, vermin, insects or rodents. If, however, the peril of Collision is covered, this preclusion of coverage does not apply to collision with an animal or bird; or
(13) Delay, loss of use or any other consequential act.
Analysis
This is an open perils form, so only what is specifically excluded is not covered. However the usual exclusions are in the perils insured against section as exceptions. As a snowmobile is a form of motor vehicle, collision must be specifically added. If it is added, it provides coverage for the contact of a snowmobile or trailer with another object, or the upset of the snowmobile or trailer without contact with another object. So if while on an outing the insured runs the snowmobile into a tree, there is coverage. Likewise if the insured takes the snowmobile over very uneven ground and overturns the snowmobile, there is coverage, even though there was no contact with another object. Collision with animals is included; while not indicated here, in part (12) it states that while animals are excluded, if collision is added to the form, collision with an animal or bird is covered.
The form then continues with the usual exclusions for loss while the snowmobile is being rented, carrying people or property for a fee, being operated or practicing for a race or other competition, business use, wear and tear, fungi, latent defect, mold or rust, mechanical breakdown, freezing, overheating, dampness of atmosphere or extremes of temperature, marring, scratching, chipping unless due to a collision, faulty maintenance, vandalism, animals, and delay, loss of use or other consequential act. Unique is that loss to tracks or wheels caused by contact with the ground, or an object lying on the ground is excluded. These things are hazards of traveling over the ground, and can't be insured against. Likewise, the dishonesty of people entrusted with the property is excluded; if someone is entrusted with the property and damages it or steals it, there is no covered, but if damages is caused by someone hired to move or transport such property there is coverage. If the insured lets the neighbor borrow the snowmobile and the neighbor negligently runs the snowmobile into a tree and then into a pond, there is no coverage.
D. Deductible
We will pay only that part of the total of all loss payable under this policy that exceeds the deductible amount shown in the Declarations.
E. Loss Conditions
With respect only to the coverage provided in this form PM 00 34, Paragraph D. Loss Conditions in Common Policy Provisions Form PM 00 01 does not apply and is replaced by the following:
1. Loss Settlement
a. Scheduled Or Replacement Golf Cart, Trailer And Equipment
With regard to a scheduled or replacement "snowmobile", trailer or equipment, other than unscheduled equipment, we will pay for a:
(1) Total loss only if:
(a) Such property is completely destroyed or lost; or
(b) We determine that the cost to repair with like kind and quality or to recover is greater than the amount of insurance that applies to the property.
(2) Partial loss to such property but not more than the least of the following:
(a) The amount of insurance that applies to the property; or
(b) The cost to repair or replace it with like kind and quality.
b. Newly Acquired Snowmobile, Trailer And Equipment
With regard to a newly acquired snowmobile, trailer or equipment, other than unscheduled equipment, we will not pay more than the least of the following amounts:
(1) The cost to repair or replace with like kind and quality; or
(2) The limit of coverage.
c. Specifications Or Repair Practices
To determine the cost to repair with like kind and quality, we may use the manufacturer's specifications or accepted repair practices to repair the " snowmobile's" molded body or parts made of fiberglass, plastic or composite materials.
d. Unscheduled Equipment – Blanket Insurance
We will pay only the proportion of any loss to unscheduled equipment that the blanket amount of insurance bears to the actual cash value of the damaged or lost property at the time of loss, but not more than $250 for any one item.
Analysis
The form has a standard deductible clause. A loss is not paid until it is over the amount of the deductible listed on the policy. Unlike many of the inland marine forms, this form does not follow the loss provisions of the common provisions form. The total loss of a snowmobile, trailer, or scheduled equipment is paid only if the property is completely destroyed or lost or the carrier determines that the cost to repair with like kind and quality is greater than the scheduled amount of coverage. For example, a snowmobile is scheduled for $12,000. The snowmobile burns, and the cost to repair it to return it to its pre-loss condition is $14,000; the carrier will only pay $12,000, the scheduled amount.
Partial losses are paid at no more than the lesser of amount of insurance or the amount to repair or replace it with like kind and quality. Damage to newly acquired snowmobiles, trailers and scheduled equipment is handled the same way.
In order to determine the cost to repair with like kind and quality, the carrier has the right to use the manufacturer's guidelines or specifications to repair the snowmobile's molded parts made of fiberglass, plastic or composite materials. Independent shops may want to use a different technique to repair a snowmobile that is more expensive than the manufacturer's guidelines; the carrier will default to the carrier guidelines and only pay that amount.
Unscheduled equipment is paid on a proportional basis; what is paid is the proportion of loss to unscheduled equipment to the actual cash value of the equipment at the time of the loss, but no more than $250.
2. Reinstatement Of Amount Of Insurance After Loss
With respect to property described in the Schedule:
a. Under Items 1.a., b. and c., we will reduce the amount of insurance by the payment of any claim. However:
(1) We will automatically reinstate the amount reduced; and
(2) Upon determination of the amount of loss, you will pay an additional pro rata
premium from the date of loss to policy expiration; or
b. Under Item 1.d., we will not reduce the amount of insurance by the payment of any claim.
3. Loss Payment
a. We will adjust all losses with you. We will pay you unless:
(1) A claim has been paid by others; or
(2) Some other person is named in the policy or is legally entitled to receive
payment.
b. Loss will be payable 60 days after we receive your proof of loss and:
(1) Reach an agreement with you;
(2) There is an entry of a final judgment; or
(3) There is a filing of an appraisal award with us.
4. Duties After Loss
In case of a loss to covered property, we have no duty to provide coverage under this policy if the failure to comply with the following duties is prejudicial to us. These duties must be performed either by you, or an "insured" seeking coverage, or a representative of either:
a. Give prompt notice to us or our authorized representative;
b. Notify the police in case of loss by theft;
c. Protect the property from further damage. If repairs to the property are required, you must:
(1) Make reasonable and necessary repairs to protect the property; and
(2) Keep an accurate record of repair expenses.
Such expenses will be paid by you and us in proportion to our respective interests;
d. Cooperate with us in the investigation of a claim;
e. Prepare an inventory of damaged property showing the quantity, description, actual cash value and amount of loss. Attach all bills, receipts and related documents that justify the figures in the inventory;
f. As often as we reasonably require:
(1) Show the damaged property;
(2) Provide us with records and documents we request and permit us to make copies;
(3) Submit to examination under oath, while not in the presence of another "insured", and sign the same;
(4) Produce, to the extent that it is within your power, your employees, members of your household or others so that they may be examined under oath; and
(5) Send to us, within 90 days after discovery of the loss, your signed, sworn proof of loss which sets forth, to the best of your knowledge and belief:
(a) The time and cause of loss;
(b) The interests of all "insureds" and all others in the property involved and all liens on the property;
(c) Other insurance or service agreement which may cover the loss; and
(d) The inventory of damaged property described in e. above.
5. Loss Payable Clause
If the Declarations names a loss payee and the property in which the loss payee has an interest, we will adjust any loss with you and make the loss payment to you or an "insured" legally entitled to receive payment and the loss payee as their respective interests may appear.
We will notify the loss payee in writing if we cancel or do not renew the policy.
Analysis
When a loss has occurred to scheduled or newly acquired snowmobiles, trailers or equipment, the amount of insurance available is reduced by the amount paid out on the claim. However the amount will be reinstated once the insured has paid a prorated amount of premium from the date of the loss to the end of the policy period. For example, a policy has a loss of $5000 on a snowmobile valued at $12,000. The amount of insurance is reduced to $5,000, but is then automatically reinstated. The insured then pays a prorated amount on the $5,000 from the date of loss to the policy expiration. Losses to unscheduled property do not make any changes to the limit of insurance.
Losses are settled with the insured unless someone else is legally entitled to payment, and losses will be paid within sixty days once settlement has been agreed upon. The duties after are loss are standard; the insured must cooperate with any investigation, provide proof of loss, give details of the loss, notify the police in event of theft, give prompt notice of loss, protect property from further damage, and other standard clauses. The standard loss payee clause follows.
F. Other Conditions
With respect only to the coverage provided in this form PM 00 34, Paragraph E.5., Other Insurance And Service Agreement in Common Policy Provisions Form PM 00 01 is deleted and replaced by the following:
5. Other Insurance And Service Agreement, Plan Or Warranty
a. Other Insurance
If a loss covered by this policy is also covered by other insurance, this insurance is
excess over any amounts payable under any such insurance.
b. Service Agreement, Plan Or Warranty This insurance is excess over any amounts
payable under the following:
(1) Mechanical breakdown insurance or warranty;
(2) Manufacturer's or extended warranty;
(3) Service plan;
(4) Property restoration plan; or
(5) Other similar service agreement, plan or warranty.
Analysis
The other conditions section applies to situations when other insurance is present on the property. This form is excess over any other insurance, including service agreements, plans or warranties.
Liability
PART II . PROPERTY DAMAGE LIABILITY
COVERAGE
A. Limited Coverage
1. We will pay up to:
a. $1,000 for damage to property of others caused by the collision of a covered "snowmobile" or trailer while being used by an "insured" and for which an "insured" is legally liable to pay; and
b. $1,000 for costs incurred by an "insured" in any suit we defend.
Bankruptcy or insolvency of an "insured" or an "insured's" estate shall not relieve us of our obligations under this coverage.
2. This coverage does not apply to liability assumed by an "insured" under any contract or agreement.
3. The policy deductible does not apply to loss under this coverage.
B. Exclusion
We will not pay for damage to:
1. Property owned by an "insured"; or
2. Property of others if, at the time of a collision, the "snowmobile" or trailer is:
a. Rented to others;
b. Being operated in or practicing for any prearranged or organized race, speed contest or other competition;
c. Being used to carry persons or cargo for a charge; or
d. Being used in any activity engaged in for money or other compensation.
C. Optional Increased Limits
If this option applies, the limits of liability noted in A.1. above are each increased to the limit selected in the policy Declarations or shown elsewhere in this policy for this option.
Analysis
Most inland marine forms are property damage only; because snowmobiles are motorized vehicles, liability coverage is provided. Coverage however is limited; only $1,000 is paid for damage to property of others for which the insured is legally liable because of loss caused by a snowmobile or trailer while being used by an insured. Likewise, only $1,000 is provided for costs to an insured for any suit that is defended. Costs to an insured could be lost wages, document reproduction, and other such expenses.
Coverage does not apply to property owned by an insured, as that would be covered under property coverage. Coverage is also not provided if the snowmobile or trailer is rented to others, used to carry persons or property for a fee, being operated in or preparing for a race or competition, or being used in any business.
There is an option to increase the liability limits as long as it is shown on the declarations or elsewhere in the policy. If there is no indication that the limits have been increased, then they have not been.