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 for that property and it is owned by an "insured".
The amounts of insurance shown are limited by Paragraph F.1. Loss Settlement in this form.

a. Outboard Motor Boats listed in Item 1.a. in the Schedule include permanently attached equipment except motors.
b. Outboard Motors listed in Item 1.b. in the Schedule include fuel containers and any electric starting equipment or controls supplied by the manufacturer as integral equipment.
c. Boat Trailers listed in Item 1.c. in the Schedule include boat carriers. Such trailers or carriers must be designed and used to carry and move boats listed in Item 1.a. in the Schedule.
d. Unscheduled Boat and Motor Equipment insured under Item 1.d. in the Schedule includes detached and detachable accessories, equipment or parts from the boats or motors listed in 1.a. or 1.b. in the Schedule. For example: anchors, batteries, battery boxes and chargers, boat covers, fire extinguishers, flags, flagstaffs, flares, fuel containers not covered in b. above, horns, life preservers, lines, seat cushions, oars, oar locks, pumps and similar mobile equipment.

Analysis

The insuring agreement states that coverage is provided for the watercraft listed in the schedule with an amount and premium as long as the craft is owned by an "insured". The form then describes what can be covered in each section. Under Outboard Motor Boats in 1.a., that includes permanently attached equipment except motors. Motors are covered in 1.b. including fuel containers and electric starting equipment or controls supplied by the manufacturer as integral parts of the motor. Trailers listed in 1.c. are trailers designed and used to transport the boat listed in 1.a. Unscheduled equipment is the detached and detachable accessories used with the scheduled boats and motors, such as anchors, batteries, covers, flares, seat cushions, oars, and other equipment.

2. Newly Acquired Property – Outboard Motor Boat, Outboard Motor Or Boat Trailer

a. We will cover an outboard motor boat, outboard motor or boat trailer you acquire, by ownership, during the policy period subject to the conditions and limits in b. and c. below. Such property must be similar to the property described in the Schedule, an acceptable risk to us and not more than 10 years old.
b. You must report the transaction to us within 30 days of taking ownership and pay an 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.
c. The most we will pay in event of a covered loss to such property is the cost of the item to you up to:

(1) $5,000 for the boat; or
(2) $1,000 for the motor or trailer.

Analysis

Once an insured has scheduled a boat, motor, or trailer on this form, newly acquired property will be covered if certain parameters are met. First, the newly acquired property must be similar to what is already scheduled on the form; it must be no more than ten years old and be an acceptable risk to the insurer. The acquisition must be reported to the insurer within thirty days of acquisition, and the premium must be paid. The most paid for a covered loss to such newly acquired property is $5,000 for the boat, $1,000 for the motor, and $1,000 for the trailer.

3. Replacement Property

a. If, during the policy period, you dispose of covered property, we will automatically insure 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.

b. You must report the transaction to us within 30 days of taking ownership and pay an 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

Replacement property is similar to newly acquired property in that the insurer must be notified within thirty days of taking ownership and pay the premium. If the new property is not reported within thirty days, coverage terminates automatically at the end of thirty days or the end of the policy period, whichever is first. The replacement property must be similar to the property that was disposed of, and the new property is covered up to the amount of insurance on the disposed of property or the invoice cost of the replacement property, whichever is less.

4. Territory Definitions

a. If Item 2.a. if the Schedule is selected, we insure covered property only while on land or inland waters, except the Great Lakes, that are within the Continental United States and Canada.
b. If Item 2.b. in the Schedule is selected, we insure covered property while on land, coastal waters and inland waters, including the Great Lakes, that are within the Continental United States and Canada.

Analysis

There are two options for covered territory. The first is on land or inland waters, excluding the Great Lakes, that are within the Continental United States or Canada. The second is on land, coastal waters, and inland waters, including the Great Lakes, that are within the Continental United States or Canada.

B. Property Not Covered

We do not cover:

1. Hovercraft meaning a self-propelled motorized ground effect vehicle including, but not limited to, flarecraft and air cushion vehicles;
2. Any boat equipped with rotors or other apparatus that enables it to become airborne; and
3. Contraband, or property in the course of illegal transportation or trade.

Analysis

Property not covered is straightforward. Hovercraft are not covered, nor are any boats equipped with rotors that would allow them to become airborne. Likewise, contraband or property in the course of illegal transportation or trade is also excluded. In a small boat, smugglers could transport illegal substances into the country more easily than crossing a land barrier.

C. Perils Insured Against

We insure against risk of direct physical loss to covered property.
We do not insure:

1. Loss while covered property is:

a. Rented to others;
b. Being used to carry persons or cargo for a charge;
c. Being operated in or practicing for any prearranged or organized race, speed contest or other competition; or
d. Being used for any business purpose other than business entertainment for which there is no direct remuneration. We do insure against loss that results solely from the perils of fire or lightning;

2. 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;

3. Loss caused by or resulting from:

a. Wear and tear, gradual deterioration, weathering, bubbling, osmosis or delamination of fiberglass or plywood;
b. Vermin, insects or marine life;
c. Fungus,mold or rot;
d. Corrosion,electrolysis or rust;
e. Latent defect, inherent vice or any quality in property that causes it to damage or destroy itself;
f. Damage to the hull or motor that results from flaw(s) in the hull or motor that:

(1) Existed at the time of the building of the boat or motor; and
(2) Are not discoverable by ordinary methods of testing. We will cover loss to other covered property caused by the flawed hull or motor;

g. Electrical, mechanical or structural failure or breakdown;
h. Freezing or overheating;
i. Extremes of temperature. But we will pay for loss caused by or resulting from improper winterizing if such winterizing was performed by a competent marina or similar facility;
j. Ice to a boat or motor that is afloat and moored or laid up;
k. Work done to or handling of covered property unless fire or explosion ensues and then we will pay only for the ensuing loss;
l. 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" or another person under the direction of an "insured";
m. Your failure to maintain the covered property in good condition and repair so it cannot be damaged by ordinary weather or water conditions or the rigors of normal use; or
n. Delay, loss of use or any other consequential act.

Analysis

The form is open perils, so everything that is not specifically excluded is covered. The first clause of property not covered addresses property rented to others, being used to carry persons/property for a fee, being used in any sort of race or used in any business outside of business entertainment where there is no direct payment. If an executive has a boat and takes some clients out for an afternoon of entertainment, that would be covered as long as no payment was expected from the clients. It then specifies that losses that result directly from fire or lightning are covered.

The infidelity of persons or entities to whom an insured entrusts the boat is not covered. For example, an insured agrees to sell an interest in his boat to another party, allowing that person to use the boat while making payments on the interest. If the other party steals the boat before interest is vested, there is no coverage for the loss of the boat. However, coverage does apply if the damage results from a carrier hired to move or transport the property. If the insured hires a carrier to bring back the stolen boat and it is damaged in transit, that damage would be covered.

The next clause is a large list of things that are either expected to occur over time as the property ages or is exposed to the environment in general. This includes flaws during construction, damage caused by faulty work on the property, and similar issues. Wear and tear, deterioration, vermin, insects, corrosion, rust, fungus, and weathering can be expected over time or are due to the property being kept outside.

Damage to the hull or motor resulting from flaws in the hull or motor that existed at the time of construction or are not discoverable by ordinary testing is not covered. However, loss to other property caused by the flawed hull or motor would be covered. Likewise, electrical, mechanical, or structural failure or breakdown is not covered. So,if a boat's motor has design flaws that cause it to combust, catching the boat and its contents on fire, the motor itself will not be covered by this exclusion, but the fire damage to the boat and personal contents inside the boat would be covered.

Freezing, overheating, and extremes of temperature are not covered. However, loss caused by or resulting from improper winterizing is covered if the winterizing was conducted by a competent marina or similar facility. Sometimes temperatures drop below normal lows and even the best winterizing can't prevent damage. Likewise, ice to a boat or motor that is afloat and moored or laid up is not covered. Ice is a normal hazard to boats in the water.

Work done to or the handling of the property is excluded unless fire or explosion ensues. That resultant fire or explosion would be covered.If the insured is changing the oil in the boat and spills the oil, causing a fire to ignite, the fire damage would be covered but not the lost oil.

Marring, scratching, denting, or other damage caused by sudden and accidental impact with another object not under the control of the insured or another person under the direction of the insured is not covered. While the language doesn't specify that the other object must be moving, it is implied in the mention that the other object is not under the control of the insured or another person acting at the insured's direction. However, since it's not specified, it stands to reason that if the boat is damaged by scraping against another boat at the dock while mooring, that would not be covered as the insured is not in control of the other boat.

Failure to maintain the boat and protect it from ordinary weather and water conditions is excluded. The insured is expected to take good care of his insured property.

The last item is for delay, loss of use and other consequential acts. If the boat is damaged, there is no coverage for loss of use. If the HVAC system in the boat is being replaced and in the process the boat flooring is damaged, there is no coverage for that consequential damage.

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. Options
One or more of the following options apply to this policy only if the box for that option is checked in the policy Declarations, or is otherwise indicated elsewhere in this policy.

1.Towing And Assistance Coverage

a. We will pay the reasonable costs incurred by an "insured"in excess of $100 for emergency repairs to a covered boat that is away from a safe harbor or a boat trailer that is away from the "insured's" residence shown in the Declarations. The most we will pay is:

(1) $500 for any one event; and
(2) $1,000 during each separate12 month period of this policy.

b. We limit reasonable expenses to:

(1) Towing to the nearest place where necessary repairs can be made;
(2) Delivery of gas,oil or repair parts to the site of disablement, but excluding the cost of these items; or
(3) Labor for emergency repairs at the site of disablement.

c. The policy deductible does not apply to loss under this coverage.

2. Protect And Recovery Costs Coverage

a. We will pay for the reasonable costs incurred by an "insured" in excess of $100:

(1) To recover a covered boat, motor or trailer that has been damaged by a peril insured against and protect it from further damage; or
(2) To have a covered boat:

(a) Hauled out of the water when the National Weather Service issues a hurricane watch or warning, for the area where the covered boat is located; and
(b) Launched in the same general area after the watch or warning has ended.

b. The most we will pay is:

(1) $750 for any one event; and
(2) $1,500 during each separate 12 month period of this policy.

c. The policy deductible does not apply to loss under this coverage.

Analysis

Available deductible options are full coverage, $25, $50, $100, $250, and $500. The deductible must be met before payment is made.

There are two optional coverages available to the insured, Towing and Assistance and Protect and Recovery Costs Coverage. These optional coverages must be listed in the schedule or the declarations. Towing pays the reasonable cost in excess of $100 for emergency repairs to a covered boat that is away from safe harbor, or a boat trailer away from the "insured's" residence. The most that will be paid is $500 for any one event and $1,000 during a twelve month period. Reasonable expenses are limited to towing to the nearest place where repairs can be made; delivery of gas, oil, or repair parts to the site of disablement, but excluding the cost of the items; or labor for emergency repairs at the site of the disablement. The deductible does not apply to this coverage.

The Protect and Recovery Costs Coverage pays for reasonable costs in excess of $100 to recover a boat, motor, or trailer that has been damaged by a covered peril and to protect the property from further damage. Also, costs to have a covered boat hauled out of the water when the National Weather Service issues a hurricane watch or warning for the area where the boat is located, and launching the boat in the same general area after the watch or warning has ended. The most that will be paid is $750 for any one event and $1,500 during each separate twelve month period of the policy. Again, the deductible does not apply to this coverage.

F. Loss Conditions
With respect only to the coverage provided in this form PM 00 30, 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 Outboard Motor Boat

(1) Total Loss We will pay for a total loss to a scheduled or replacement boat only if:

(a) It is completely destroyed or lost; or
(b) We determine that the cost to recover or repair it is greater than the amount of insurance shown in the Schedule.

(2) Partial Loss
In the event of a partial loss to a scheduled or replacement boat, we will not pay more than the least of the following amounts:

(a) The amount of insurance that applies to the boat; or
(b) The cost to repair or replace with like kind and quality subject to the following:

i. For plastic or canvas coverings and sails, we will deduct for depreciation:and
ii.For all other covered property, we will not deduct for depreciation.

(3) Specifications Or Repair Practices
To determine the cost to repair with like kind and quality, we may use the specifications or accepted repair practices of the manufacturer to determine the cost to repair a boat's molded hull or parts made of plastic, plywood, fiberglass or composite materials.
If we deem it necessary, a repair yard, equipment repairer or surveyor agreeable to us will determine the cost of repairs.

b. Scheduled Or Replacement Outboard Motor And Boat Trailer
Total Or Partial Loss The value of such property is not agreed upon but will be determined at the time of loss.
We will not pay more than the least of the following amounts:

(1) The actual cash value at the time of loss;
(2) The cost to repair or replace with like kind and quality; or
(3) The amount of insurance.

c. Newly Acquired Outboard Motor Boat, Outboard Motor And Boat Trailer– Total Or Partial Loss
The value of such property is not agreed upon but will be determined at the time of the loss.
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.

d. Unscheduled Equipment
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 loss settlement provisions replace those in the Common Policy Provisions form. For scheduled or replacement outboard motor boats that are a total loss, payment is made only if the boat is completely destroyed or lost, or the cost to repair or replace is determined to be more than the amount on the schedule. For a partial loss, payment is the least of the amount of insurance on the boat or the cost to repair or replace with like kind and quality. If plastic or canvas coverings and sails are damaged, then a deduction is made for depreciation. No deductions are taken on any other property.

Certain specifications or repair practices are prescribed.In order to determine the cost to repair a boat's molded hull or parts made of plastic, plywood, fiberglass, or composite materials, the insurer may use the specifications or accepted repair practices of the manufacturer. If the insurer deems it necessary, a repair yard, equipment repairer, or surveyor the company approves of will determine the cost of repairs.

The value of motors and trailers is determined at the time of a total or partial loss. No more than the least of the actual cash value, the cost to repair or replace with like kind and quality, or the amount of insurance is what is paid at the time of loss.

For total or partial losses to newly acquired boats, motors, or trailers, payment will be the least of the cost to repair or replace with like kind or quality or the amount of insurance.

Unscheduled equipment is covered on a blanket basis. Therefore, what is paid is the proportion of the amount of insurance to the actual cash value of the damaged or lost property at the time of loss, but no more than $250. For example, there is $5,000 of unscheduled equipment. The insured's anchor is destroyed in a loss, valued at $200 actual cash value. The value of the anchor is then divided by $5,000 for a result of .04. Therefore, the amount paid for the anchor will be $200 multiplied by .04, or $80.

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 the you and make the loss payment to you and an "insured" 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

Once a claim has been made for a boat, motor, or trailer, and payment issued, the amount of insurance remaining is reduced. The limits will be reinstated by the reduced amount upon determination and payment of the pro rata premium from the date of loss to the expiration date. Under the blanket limit for unscheduled equipment, no reductions are made to the limits after payment has been made. If a loss payment of $5,000 is made, the premium to reinstate that $5,000 payment will be prorated based on the amount of time left until the policy's expiration. Once that prorated payment has been made, the $5,000 will be reinstated so the insured once again has full policy limits available in event of total loss.

Loss payment is standard, and all losses are adjusted with the insured unless a claim has been paid by others or another person is listed in the policy or entitled to receive payment. Losses are payable after sixty days after receipt of the proof of loss and the insurer and insured reach an agreement, or there has been an entry of final judgment, or there is a filing of an appraisal award with the insurer. For example, if the insured does not submit a timely proof of loss, or there is a disagreement as to the amount of the loss, this will not reduce the 60 days the insurer has to make their payment.

The duties after a loss are standard and self-explanatory. As always, the insured is required to notify the insurer as soon as possible, notify the police in case of theft, protect the property from further damage and make repairs to protect the property, keep a record of expenses, cooperate with any investigation, provide an inventory of damaged property, provide records upon request, submit a detailed proof of loss, and other standard requirements.

If there is a loss payee on the property, then payments are made payable to the insured and the loss payee as interests may appear. The loss payee will be notified in writing if the policy is cancelled or nonrenewed.

PART II PROPERTY DAMAGE LIABILITY COVERAGE

A. Limited Coverage

1. We will pay up to:

a. $1,000 for damage to property of others an "insured" is legally liable to pay because of a collision of a:

(1) Covered boat or motor while afloat; or
(2) Covered trailer while transporting a covered boat; 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 property owned by an "insured".

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 otherwise shown elsewhere in this policy for this option.

Analysis

Part II of the policy provides a small amount of liability coverage for damage to property of others. Up to $1,000 is available if the insured is legally liable to pay because of a collision of a covered boat or motor while afloat or a covered trailer while transporting a covered boat. Also, $1,000 is available for costs incurred by an insured in any suit defended by the insurer. These limits may be increased to $3,000, $5,000, or $10,000.

Bankruptcy of an insured has no bearing on coverage available under this form. Coverage does not apply to liability assumed under any contract or agreement, and the deductible does not apply to this coverage.

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