Insurance coverage for boat rentals

Coverage Q&A: The insured caused damage to a pontoon boat when he struck a rock during the rental period.

A group of people ride out onto Lake Okeechobee in a pontoon boat. (Credit: Lorraine Boogich/iStockphoto.com)

Every claim is different, and some insurance policies can be difficult to interpret for unique situations. FC&S Expert Coverage Interpretation, the recognized authority on insurance coverage interpretation and analysis for the P&C industry, makes it simple to find credible answers to your complicated coverage questions. Analysis brought to you by our FC&S experts. 

Editor’s Note: Boats are a unique exposure. Although they are vehicles with specific insurance policies available to cover their risks, there also is some coverage under a homeowners insurance policy. However, that coverage only applies to certain types of boats, usually smaller and lower-powered watercraft. This week’s question addressing a situation involving a rented boat and whether the insured’s policy covers damage that occurred during the rental period.

Question: Our insured rented a 20-foot pontoon boat with a 30 horsepower motor for one afternoon. During the rental period, the insured struck a large rock, causing a hole on the left side of the boat.

His insurance policy states, “We’ll pay for the bodily injury or the property damage which results from the maintenance, use, loading, or unloading of a watercraft that is powered by outboard motors, which total more than 25 horsepower, if: 3) the motors are not owned by an insured. ‘Property damage’ means physical injury to tangible property. This includes the loss of use.”

The company says there is no coverage, but it appears that it would be covered per the policy language above. Your thoughts, please.

— Montana Subscriber 

Answer: To learn the answer to this week’s coverage Q&A, please log into your FC&S Expert Coverage Interpretation account.

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