WakezoneINS

About once a month I have a potential new client ask me the question, “This policy covers everything right?”. I believe most boaters will agree that there isn’t a single insurance company that covers "everything." Rates would be astronomical and unaffordable at the very minimum if insurance companies indeed covered everything and every cause of loss (aka peril).

While I know that the person didn’t truly mean "everything", any insurance agent would be knockin’ on the door to the loony bin if they actually said yes!

Every insurance policy has exclusions. It is recommended (and expected) by the insurance company that you read not just the declarations page but the policy forms behind the declarations page. What you read in the exclusions section might surprise you!


Here are a couple of the definitions and conditions you will find in most performance boat insurance policies, notice I said “performance”


1. Lay up periods - Some policies have them, others don't. A lay up period is the time when your boat is "down" for the winter. It is a time of the year that you do not put your boat in the water. Having a lay up on your policy provides you with a credit on the liability premium of your policy. Keep in mind that there are carriers that will NOT designate a lay up period and just factor down time into your rate (based on your zip code).

2. Navigation limits - Most performance policies designate a navigation limit. This is simply the body or bodies of water that you use your boat in most. For example, someone in Missouri would likely see: "Inland Waters of the United States including the Great Lakes". Always double check your navigational territory to ensure that your boat is covered for the waters where you use your boat.

3. Racing and speed contests - Typically excluded unless endorsed and additional premium paid. This does not include poker runs. Most policies will actually state that poker runs are covered. If your policy is unclear, ask your agent or carrier if you're covered.

4. Named Operator - A named operator endorsement on a policy means that there is no coverage for losses for anyone OTHER THAN the named operator(s) on the policy. Therefore, if someone operates your boat and you want a potential loss covered, you need to add them to your policy. Typically this will require carrier review, approval and endorsement. The named operator(s) driving history and ownership history are taken into account.

Now onto the common exclusions. I apologize for the technical terms here but figured I better list them verbatim. I have listed the exclusions for PROPERTY DAMAGE, not liability, below. This was taken from one performance carrier's policy. Each carrier's policy differs.



COVERAGE A - COVERAGE FOR LOSS
We will pay for loss to the insured watercraft arising out of an accident. The accident and the loss must occur during the Policy Period shown in the Declarations.

TERMS APPLYING TO COVERAGE A
1. ADDITIONAL PAYMENTS
When loss is covered and exceeds the applicable deductible shown in the Declarations, we will also pay:
a. the cost of transporting the insured watercraft or its parts to the nearest
reasonable place of repair. Transporting will be by the least costly reasonable means;
b. reasonable costs other than salvage charges incurred in providing protection for the insured watercraft after a loss;
c. up to 14 days for storage of the insured watercraft when it is stolen and recovered or damaged from a covered loss.
d. salvage charges that:
(1) we agree to pay;
(2) are awarded by a United States Court; or
(3) are determined by an arbitration board in the United States that you and we agree to authorize for this purpose.

2. ADDITIONAL EXCLUSIONS
We will not pay for loss arising out of:
a. mechanical, engine, transmission, electrical, or structural failure;
b. wear and tear, deterioration, weathering, corrosion, rust, metal fatigue, or
electrolysis;
c. dampness of atmosphere, rot, dry rot, mold, or mildew;
d. marring, scratching, denting, chipping, delamination, or osmotic blistering;
e. engine overheating, inadequate lubrication, fuel contamination, abnormal combustion, misalignment of mechanical components, or improper shifting of transmission gears at high speed;
f. faulty manufacture or defect in design;
g. improper repair;
h. freezing, thawing, or contact with ice, when the condition is expected or
anticipated and the insured watercraft was not prepared for cold weather storage or winterized to the standards of the manufacturer or accepted marine standards;
i. birds, rodents, insects, animals, vermin, and marine life except if loss is caused by collision;
j. power surge or interruption to electrical device, other than lightning;
k. ingestion not caused by an accident;
m. unseaworthiness;
n. diminution in value;
o. transportation of the insured watercraft over land when:
(1) the weight of the insured watercraft exceeds the registered weight capacity of the transporting trailer;
(2) the weight of the insured watercraft and transporting trailer exceed the maximum towing weight recommended for the towing vehicle;
(3) the width or beam of the insured watercraft exceeds the trailering allowances of the state and necessary permits were not obtained prior to loss;
(4) the transporting trailer fails during transport of the insured watercraft because of lack of maintenance.
p. legal or illegal seizure or confiscation, or during detention, by any governmental body;
q. a taking, holding, hiding, repossession or sale by:
(1) anyone to whom was given the insured watercraft's care, custody, control, or use;
(2) anyone making a claim for or against the insured watercraft under contract, agreement or law.

Exclusions "a." through "k." shall not apply to ensuing loss caused by consequential sinking, burning, or collision of the insured watercraft.




Hopefully the above was "enlightening" to some readers. I would recommend that when you get your insurance policy in the mail, don't stash it away or add it to the stack of papers. Actually sit down and take a moment to look over the policy. (Hint: they make great night time reading material) haha In all seriousness though, in the event of a loss, it is assumed that you have already read your policy and that you understand your policy. If you have questions, ask your agent right away. Get things clarified up front so that you aren't frustrated OR surprised come claim time.