It's easy for a homeowner to assume that a jet ski would fit within the parameters of the homeowners liability exceptions for watercraft. However, it is important to remember that the exceptions aren't based on size alone, but on horsepower.
The liability exceptions for watercraft are based on craft with less than 25 horsepower, or craft with more than 50 horsepower but are not owned by or rented to an insured. The horsepower of a jet ski can range from 100 to more than 300 horsepower depending on the make and model. This excludes jet skis an insured owns from liability coverage under the homeowners policy. The cost of jet skis also exceeds the special limit for watercraft which is $1,500 in the 2011 edition of the ISO HO 00 03 and $2,000 in the 2022 edition of the HO 00 03.
The jet ski owner will likely have to turn to endorsements for coverage. For physical damage coverage, a jet ski can be scheduled on the HO 04 61 Scheduled Personal Property Endorsement. The revised Coverage C Increased Limits of Liability HO 04 65 allows for the watercraft limit to be increased, but the manual states that the maximum limit is $5,000, which is not enough to cover the value of the jet ski.
But what about liability coverage? For that, the Supplemental Watercraft Liability Endorsement HO 24 75 should be used. The form allows the watercraft to be scheduled onto the policy for liability coverage. The watercraft must be described, including length and type of engine or motor, including horsepower of the engine or motor, navigation period, and identity of the owner of the outboard motor, if the owner of that outboard motor is not the insured. Sailing vessels greater than 26 feet in length may be scheduled as well, and again they must be described on the schedule, including horsepower and navigation period.
Coverage E liability and F medical payments are provided, with exclusions for participating in, practicing for, or otherwise engaging in any prearranged or organized race, speed contest or other competition. Predicted log cruises are allowed and the exclusion does not apply to sailing vessels. Likewise, there is no coverage if the craft is rented to others or used to carry persons or property for a fee, or the craft is used for any "business" purposes. Any "bodily injury" sustained by an employee whose principal duties are connected with the watercraft is excluded.
Many insureds overlook insurance for their motorized implements, be they jet skis, snowmobiles, or ATVs. As illustrated here, such small personal vehicles need coverage beyond what the standard policy provides, and endorsements are generally the way to provide such coverage.
Christine G. Barlow, CPCU
Christine G. Barlow, CPCU, is Executive Editor of FC&S Expert Coverage Interpretation, a division of National Underwriter Company and ALM. Christine has over thirty years’ experience in the insurance industry, beginning as a claims adjuster then working as an underwriter and underwriting supervisor handling personal lines. Christine regularly presents and moderates webinars on a variety of topics and is an experienced presenter.