Topics Covered:

Homeowners Policy

Supplemental Watercraft Liability Coverage HO 24 75

Owned Snowmobile Liability Coverage HO 24 64

Incidental Low Power Recreational Vehicle Liability Coverage HO 24 13

Motorized Bicycle and Motorized Scooter Liability Exclusion  HO 24 04

Non-owned Motorized Bicycle and Motorized Scooter Liability Exclusion HO 24 03

Owned Motorized Golf Cart Physical Loss Coverage HO 05 28

Part I Homeowners Policy 

As the name states, the intent of the homeowners policy is to provide coverage for the insured's home and personal property. However, some small vehicles with little power may be covered on a homeowners policy. The homeowners form defines a motor vehicle as "a self-propelled land or amphibious vehicle or a trailer or semitrailer carried on or towed behind such a motor vehicle." The policy then excludes these vehicles from physical damage coverage in the policy, with a few exceptions.

The exclusion for motor vehicles does not apply to portable electronic equipment that receives, reproduces, or transmits audio, visual, or other data signals and is designed to be operated by a power system other than the vehicle. If this equipment can be run from the home as well as a vehicle, then the exclusion for motor vehicles does not apply to this equipment.

The next exception is for vehicles that are not required to be registered for use on public roads and that are used solely to service a residence or that are designed to assist the handicapped. These vehicles are covered as personal property. A golf cart the insured uses when taking care of the yard would be a covered vehicle. Since the policy states that it must be used to service a residence, even if the insured takes it down the street to help a neighbor move mulch around the yard, that is covered. It doesn't have to be the insured's residence that is serviced, it just has to be a residence. An ATV used for servicing the premises would be covered, while an ATV used for off-roading would not be covered. Likewise, a riding lawn mower, as long as it was used mowing a yard, would be covered. As long as the vehicles don't need to be registered for use on public roads and are servicing a residence, there is coverage. Vehicles designed to assist the handicapped are covered as well. Many handicapped people use motorized wheelchairs or scooters for transportation.

That same section also provides an exception for certain hobby aircraft. The form defines aircraft as "any contrivance used or designed for flight, except model or hobby aircraft not used or designed to carry people or cargo." These model or hobby aircraft are covered as long as they are not used or designed to carry people or cargo. So, an insured's drone that he uses for fun is covered as long as it does not carry any property or people.

Hovercraft and their parts are excluded outright, with no exceptions. A hovercraft is defined as a self-propelled motorized ground effect vehicle, including flarecraft and air cushion vehicles.

Watercraft, for the purposes of "watercraft liability," are defined as "craft principally designed to be propelled on or in water by wind, engine power or electric motor, except model or hobby watercraft not designed to carry people or cargo." There is a special limit of $2,000 for watercraft of any type, including any trailers, furnishings, equipment, and outboard engines or motors. So coverage for watercraft is very limited.

These homeowners provisions provide coverage for physical damage for certain vehicles that don't qualify for coverage under an auto policy, but do under a homeowners policy. Notice that very few vehicles are specifically mentioned by type such as ATV, golf cart, etc. Eligible vehicles are referenced by their defining characteristics and actions - vehicles not registered for use on public roads, used to service a residence, or designed to assist the handicapped, for example.

Liability Coverages

Motor Vehicles

The liability portion of the homeowners policy is even more specific in its requirements for coverage for motor vehicles. Motor vehicle liability is the first exclusion under Section II Exclusions. Excluded from coverage are any vehicles that require registration for use on public roads, when registration is required by law or government agency where the vehicle is being used, or is being operated in or practicing for any sort of organized or prearranged race, speed contest or other competition. Also excluded are vehicles rented to others, used to carry persons or cargo for a charge, or used for any "business" purpose unless it's a golf cart while on a golfing facility.

There are some specific exceptions, as follows:

• A vehicle in dead storage, as defined below
• A vehicle used solely to service a residence
• A riding lawn mower being used to mow a lawn at the time of the "occurrence"
• A vehicle designed to assist the handicapped that is being used by a handicapped person
• A vehicle designed to assist the handicapped that is parked on the premises at the time of loss
• A vehicle designed for recreational use off public roads and not owned by an insured
• A vehicle designed for recreational use off public roads and owned by the insured when the occurrence takes place on one of the following: 

• • The "residence premises"
  • Part of other premises, structures, and grounds used by the insured as a residence that is shown in the dec or acquired during the policy period for use as a residence
  • Any part of a premises not owned by an "insured" where an "insured" is temporarily residing
  • Vacant land other than farm land owned or rented to an "insured"
  • Any part of a premises occasionally rented to an "insured" for other than "business" use 
    
• Toy vehicle for use by children off an insured location, powered by batteries, for children under seven years old, not built or modified to go more than 5 mph
• Four-person golf cart, not built or modified to go more than 25 miles per hour on level ground, that, at the time of an "occurrence," is within the legal boundaries of a golfing facility or a private residential community, subject to the following conditions:  

• • If within the legal boundaries of a golf course, it must be parked or stored there, or being used by an insured to:

  • • Play golf or for other recreational activity at the facility 
    • Travel to or from where "motor vehicles" or golf carts are parked or stored
    • Cross public roads at designated points to access other parts of the facility
      
  • If within a private residential community:
    • Including public roads upon which a golf cart can legally travel and
    • Is subject to the authority of property owners association and contains an "insured's" residence

This covers a lot of territory. One thing that needs to be clarified is what exactly is dead storage. Dead storage is generally accepted to be when a vehicle has had the battery removed so that the vehicle cannot move under its own power. Other interpretations of the terms focus on the lack of vehicle registration or license plates, meaning it is illegal to move the vehicle on public roads. Generally, it's a vehicle that has been disabled or is otherwise in storage where the intent is that the vehicle will not be used for an extended period of time by anyone. An insured in the military who is deployed out of the country for several months may store his vehicle while gone. However, if a senior citizen quits driving but keeps a vehicle so that family and friends can take them to doctor appointments, the vehicle is not in dead storage, even though it is seldom used. It still needs to be insured on an auto policy and properly registered.

It's important to note that none of the vehicles that qualify for coverage under the homeowners policy are licensed for registration on public roads, used for general transportation purposes, or used in any sort of race. Golf carts are a particular category all their own, but they are smaller, slower vehicles with particular parameters. Electric bicycles, ATVS, snowmobiles, and other vehicles aren't directly mentioned, but unless they fit into the very specific exceptions for coverage, they are not covered unless an endorsement is added. But this is motor vehicle liability - what about other types of vehicles?

Watercraft

As already discussed, physical coverage for watercraft, including any furnishings, trailers, equipment, and outboard motors, is limited to $2,000, which may be raised to $5,000 in increments of $500. Therefore, only small boats are covered. The liability coverage is equally restrictive. Coverage is excluded for watercraft that are operated in or practicing for any prearranged or organized race, speed contest, or other competition, unless the craft is a sailing vessel or the race is a predicted log cruise. Coverage is also excluded if the vehicle is rented to others, used to carry persons or cargo for a fee, or used for any "business" purpose.

If these exclusions do not apply, there is still no coverage unless the craft fits within certain parameters. If the watercraft is stored, there is coverage. Damage to a watercraft will be covered if, at the time of the occurrence, the watercraft is:

Coverage is quite limited - sailing vessels must be small, and powered vehicles must meet specific parameters if the engine is over 25 horsepower. If the craft has more than 25 horsepower, it must be outboard engines or motors owned by an insured who acquired the engines either during the policy period or before the policy period, but only if the engine was declared at policy inception or the intent to insure the motor was reported to the insurer within 45 days of acquisition. Otherwise, the engine must not be owned by an insured in order to be covered.

Aircraft and hovercraft are entirely excluded from the policy. There are no provisions for such vehicles. Remember, however, that the definition of aircraft within the meaning of "aircraft liability" excludes hobby or model aircraft that are not used to carry people or passengers. There is a $2,000 special limit of liability for such model or hobby aircraft. The limit may be raised to $5,000. So if an insured accidentally flies his model aircraft into an observer and that person is injured, there would be coverage for those injuries.

Supplemental Watercraft Liability Coverage HO 24 75

The Supplemental Watercraft Liability Coverage endorsement HO 24 75 provides a way to schedule liability coverage for boats beyond the parameters of the homeowners policy. Eligible watercraft are those powered by engines or motors above 25 horsepower, or sailboats 26 feet or more in length, with or without auxiliary power. If two or more engines or motors are regularly used with any single craft owned by an insured, the horsepower is added together.

Coverage must be written to the end of the policy period. However, a navigational period may be stipulated and listed on the schedule, and premium will be adjusted on a pro rata basis. In many areas watercraft aren't used year-round. Premium is based on where the insured's residence premises is located. However, if the insured owns another residence in a different state and that is where the watercraft is primarily used, then the premium will be based on that state's rates. For example, an insured living in Maryland also has a condo in Florida that he stays at in the winter. The insured has a boat that he leaves in Florida at the condo; the premium for the boat will use Florida rates.

The endorsement first contains a schedule for powered watercraft or sailboats. The craft in question needs to be described by type, length, and description of motors if any, as well as the horsepower of the engines or motors, navigation period, and who owns the motors if they're not owned by the insured. The endorsement then modifies the watercraft liability exclusion in the policy. Coverage is not provided if the watercraft is:

• A craft racing or preparing for a race (other than a sailing vessel or a predicted log cruise)
• A craft rented to others
• A craft used to carry people or cargo for a fee
• A craft used for any business purposes.
  

All other exclusions that restrict coverage by length of vessel and horsepower are removed. A new exclusion is added, and that is for injury to an employee of the insured if the employee's primary duties involve the maintenance, operation, or use of a watercraft described in the schedule. This is the only watercraft endorsement available for the homeowners policy. If different coverage is desired, then a watercraft policy is needed.

Owned Snowmobile Liability Coverage HO 24 64

There are many endorsements for small vehicles that don't fit on an auto policy but need coverage. The first endorsement is HO 24 64, Owned Snowmobile Liability Coverage. This endorsement provides liability coverage for owned snowmobiles that are described in the schedule. The make, model, serial or motor number are required.

The definition of "insured" is extended to include any person or organization legally responsible for the snowmobile, but does not include a person or organization that uses or has custody or possession of the snowmobile without the owner's permission. If a local teenager takes the snowmobile for a joyride without first asking the owner for permission to use the vehicle, coverage does not apply.

Coverage is provided by exceptions to the exclusions for motor vehicle liability. Coverage is provided if the snowmobile is owned by the insured and the "occurrence" takes place off an "insured location" as defined under B.10.a., b., d., e. or h. That definition includes the "residence premises"; part of other premises used as a residence and that is shown in the declarations or is acquired by the insured during the policy period for use as a residence; is part of a premises not owned by an "insured" and where an "insured" is temporarily residing; is vacant land other than farm land owned or rented to an insured; or any part of a premises occasionally rented to an insured for other than "business" use.

Remember that "motor vehicles" are defined as land or amphibious vehicles that are self-propelled or capable of being self-propelled. It doesn't matter if the vehicle runs on wheels or crawler treads, what matters is how it's propelled. Therefore, snowmobiles are "motor vehicles". As such, there is no physical damage coverage for snowmobiles under the HO 00 03 except for those that only service a residence or were designed to assist the handicapped and that are not required to be registered for use on public roads. Some states require registration of snowmobiles. If the insured is recreationally snowmobiling and hits a tree, there is no coverage for the damaged snowmobile. The snowmobile can only be used to service a residence or assist the handicapped.

Incidental Low Power Recreational Vehicle Liability Coverage HO 24 13

This endorsement HO 24 13 provides coverage for a unique type of vehicle, a low power recreational vehicle. First, the definition of "insured" is extended to include any person or organization legally responsible for the covered vehicle owned by an "insured", as long as custody of the vehicle is with permission of the owner.

Similar to the snowmobile endorsement, coverage is granted by exceptions to the liability exclusion. Such vehicles are designed for recreational use off public roads and are either not owned by an "insured" or are owned by an "insured", but the "occurrence" must take place on a location as defined under B.10.a., b., d., e. or h. That definition includes the "residence premises"; part of other premises used as a residence and that is shown in the declarations or is acquired by the insured during the policy period for use as a residence; is part of a premises not owned by an "insured" and where an "insured" is temporarily residing; is vacant land other than farm land owned or rented to an insured; or any part of a premises occasionally rented to an insured for other than "business" use. Also, coverage applies for vehicles owned by an "insured" as long as the vehicle is not built or modified to exceed 28 miles per hour on level ground and the vehicle is not a moped or motorized golf cart, regardless of speed. The previous edition of the form excluded motorized bicycles and scooters as well - in the 2022 edition of the form, those exclusions have been removed. Those vehicles would now be covered under this form if all parameters are met.

One example of this type of vehicle is a motorized vehicle for small children. A TOBBI 12V Kids Ride on Car is an electric UTV for children between three and five years of age, has a maximum speed of three miles per hour, has forward and reverse gears, and has six preprogrammed songs. There are cars, trucks, ATVs, Jeeps, motorcycles, and even boats designed for children with speeds ranging from two-and-a-half to six miles per hour. Some have a remote unit so that adults can monitor and override a child's driving. Go Karts with low speeds can be covered by this endorsement as well, but the speed should be verified as some can go as fast as forty miles per hour.

Motorized Bicycle and Motorized Scooter Liability Exclusion  HO 24 04

The development of electric bicycles has created a need to address liability issues. This endorsement significantly restricts the exceptions to the motor vehicle liability exclusion. It only allows an exception for vehicles designed to assist the handicapped that are at the time of the incident being used to assist the handicapped person or are parked on an "insured location". The exceptions for vehicles in dead storage, used solely to service a residence, designed for recreational use and not owned by an insured or owned by an insured and used on certain parts of the "insured location", or designed as a toy for children are removed from this endorsement. This endorsement allows very few exceptions to the motor vehicle liability exclusion.

Non-owned Motorized Bicycle and Motorized Scooter Liability Exclusion HO 24 03

The Non-owned Motorized Bicycle and Motorized Scooter Liability Exclusion HO 24 03 modifies the exception to the liability exclusion for motor vehicles. This modification provides coverage for vehicles designed for use off public roads that are not owned by the insured and the vehicles are not motorized bicycles or motorized scooters. If an insured borrows a neighbor's ATV, then there would be coverage. However, if an insured rents a motorized bicycle while on vacation and runs into a pedestrian causing injuries, there is no coverage. Motorized bicycles and motorized scooters are specifically excluded.

The rest of the endorsement is the same as what is in the homeowners policy and provides coverage for certain owned vehicles as long as they are used on certain sections of the "insured location", or the vehicle is used off an insured location and is designed as a toy for children under seven years of age, powered by one or more batteries and not built or modified to exceed five miles per hour on level ground.

Owned Motorized Golf Cart Physical Loss Coverage HO 05 28
Unlike many of the other endorsements, endorsement HO 05 28 provides only physical damage coverage, but not liability. A golf cart is described the same way as in the policy: designed to carry up to four people for playing golf, and not built or modified to go faster than twenty-five miles per hour on level ground. The endorsement provides coverage for the cart itself and accessories, equipment, or parts not permanently installed on the cart that are designed specifically for golf carts. The equipment must be either at the insured's residence or in or upon a golf cart off the insured's residence. Examples of such equipment consist of heated seat covers, camouflage seat covers, removable gun racks, coolers, and underseat storage trays.

The loss is settled at the least of the actual cash value, the amount required to repair or replace, or the limit shown in the schedule. The most that is paid for any accessories is 10 percent of the highest limit of liability on the schedule. For example, the insured has two golf carts, one valued at $10,000 and one valued at $15,000. If the insured's camouflage seat covers, removable gun rack, and underseat storage trays are stolen, the maximum amount payable is $1,500—10 percent of the cart valued at $15,000 even if the equipment is stolen from the cart valued at $10,000.

If another policy, maintenance warranty, or manufacturer's warranty exists, this coverage is excess over that policy only if that policy pays less than the limit in the endorsement schedule. This form will then pay the difference between that other policy and the limit of this endorsement.

Perils covered in this endorsement are open perils except for certain exclusions. The exclusions are standard and exclude racing, wear and tear on the vehicle, mechanical breakdown or failure, vandalism if the cart is left in a vacant area for more than sixty days, and animals unless collision coverage is requested.

Summary

The homeowners policy is designed to provide coverage for the home and personal property, and not motorized vehicles. While the form is designed to exclude motorized vehicles, there are some exceptions built into the policy for smaller vehicles under certain circumstances. Other small, low powered vehicles may be covered by endorsement. Vehicles that don't fit those parameters may be covered on the auto policy.

Includes copyrighted material of Insurance Services Office, Inc., with its permission.