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).

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 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 operators driving history and ownership history are taken into account.

Now on to 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 policies. 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.

Sydwayz

iTrader: (1)

Stacy, thanks for all of efforts in getting me a couple quotes very quickly last week.

3pointstar

WakeZone INS-- I love your avatar-- one of the best on the site! To me is shows where the priorities are-- not to offend anyone else

thank you

3pointstar

Keith Atlanta

Interesting.

SInce we are on the topic, what happens if the boat is rack kept and the boat over top of you constantly drips oil and ends up ruining your boat cover and staining your interior?

Hypothetical of course...

Jupiter Sunsation

I found these two highlights interesting........written right into the policy!
(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;

WakezoneINS

Correct, if you hook your 10,000lb boat up to your Ford Ranger and tow it and then the towing mechanism fails because you were towing 7,000lbs over capacity... well, yeah, the insurance company isn't going to cover the damage you cause to your boat. However, your auto insurance may still pay any of the bodily injury or property damage you caused to others as a result of the incident.

WakezoneINS

Of course hypothetical.....

So, in your example.... and this is just my educated opinion, If the boat above you caused damage to your boat, then the owner of the boat above you is legally responsible for any property damage caused by their boat. That is why THEY carry insurance. You would need for them to either pay to repair or file a claim with their insurance company...

WakezoneINS

THANK YOU!!!!! My three beautiful babies are my everything.

[ATTACH=CONFIG]540995[/ATTACH]

Bullhead

Beautiful Family!

under "Additional Exclusions" where it states not paying for a loss arising out of mechanical failure...should your steering fail causing you to have an accident would that not be covered?

thanks

Mark

WakezoneINS

Thank you Mark

I can say that I have first hand experience with a claim exactly of this nature! The steering failed, boat ran into wall and totaled the boat.

We called the claim in, they viewed the boat, mechanic confirmed that steering failed. They cut a check for the agreed value of the boat.

That claim was with American Reliable (who in my opinion is one of the best insurance companies for high performance boats in the industry, for rates and claims). So, that said, let's say in the claim we encountered several years ago, nothing ended up happening to the boat and just the steering was left "broken". Would that be covered? Likely not. So, while the mechanical item would not be covered any resulting damage that happens as a result of that failure would be.

Does that make sense? Now, that is not to say ALL carriers will operate this way. Carrier policies do differ from one to the next so it's always important to read and understand your policy. If you don't understand what you're reading... call your agent. That is what we as agents are here for, to make sure you are comfortable with and that you understand the policy you have.