Homeowners endorsements-watercraft

Homeowners endorsements-incidental low power recreational vehicle

Homeowners endorsements-owned motorized golf cart physical loss coverage

Automobile policy

Inland marine

Homeowners Policy

As the name states, the intent of the homeowners policy is to provide coverage for the insured's home and personal property. Miscellaneous vehicles are a unique category of property in that they are not necessarily vehicles in the sense of automobiles, but they are not your normal clothing, furnishings, or other forms of personal property. 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.

Vehicles that are not required to be registered to be used on public roads, that are used solely to service an insured's premises, or that are designed to assist the handicapped are covered, as are hobby aircraft.

Examples of these vehicles are:

§ground maintenance vehicles such as mowers, tractors, all terrain vehicles, snowmobiles

§wheelchairs and scooters

§radio-controlled hobby aircraft not designed or used to carry people or property

Note that the exceptions are very specific, with only vehicles that are used solely to service the residence premises being covered. A riding mower that the teenager uses to mow lawns for the neighbors is not covered because the vehicle is taken off the premises and is used to maintain other premises as well. Even though it may be used to service the residence premises, since it is also used off premises, it is excluded. Likewise, an ATV that is used for off-roading is not covered, but an ATV used solely on the residence premises to pull a trailer of mulch or vegetables is covered as long as it is used only for that purpose.

Special limits apply to watercraft and trailers not used with watercraft. This limit is $1500 each, and coverage for trailers used with watercraft is included in the $1500 watercraft limit.

The liability portion of the policy is even more specific in its requirements for coverage for motor vehicles. Coverage is provided only for the vehicles that meet one or more of the following criteria:

§In dead storage

§Used solely to service the residence premises

§Designed to assist the handicapped and being used by a handicapped person

§Designed to assist the handicapped and parked on the premises at the time of loss

§Designed for recreational use off public roads and not owned by an insured

§Designed for recreational use off public roads and owned by the insured but the occurrence takes place on specified insured locations

§Stored watercraft

§Sailboat less than 26 feet in length

§Sailboat over 26 feet and not owned by or rented to an insured

§Inboard or inboard-outdrive boat with 50 horsepower or less and not owned by insured

§Inboard or inboard-outdrive with more than 50 horsepower and not owned or rented to an insured

§Outboard engines or motors with less than 25 horsepower

§Engines with more than 25 horsepower and not owned by the insured

§More than 25 horsepower if acquired during policy period, acquired before policy period and declared at time of inception, or intent to insure is reported within 45 days of taking ownership

§Four person golf cart, speed less than 25 miles per hour, under certain conditions

The specific insured locations on which owned recreational vehicles for use off public roads are covered are as follows:

§The residence premises

§Parts of other premises, grounds, and other structures used as a residence and shown in the declarations or acquired during the policy period

§Part of a premises not owned by an insured where an insured is temporarily living

§Vacant land

§Part of a premises occasionally rented to an insured for other than business use

Those conditions for when a golf cart can be covered are when the cart is:

§Parked or stored at a golfing facility

§Being used to play golf or participate in another leisure activity at a golfing facility

§Traveling to or from where carts are stored at a golfing facility

§Crossing public roads to get to other parts of the golfing facility

§Within a private residential community which contains the insured's residence and has an owners association.

Significant gaps exist in the homeowners policy for most miscellaneous vehicles. However the policy can be modified through endorsements to broaden coverage for these types of vehicles.

Homeowners Endorsements-Snowmobile

The first endorsement is HO 24 64 10 00, Owned Snowmobile. This endorsement provides liability coverage for owned snowmobiles that are described in the schedule. The policy exclusions apply, but coverage is provided if the snowmobile is owned by the insured, described in the declarations, and off certain insured locations. These locations are when the snowmobile is off the residence premises, off premises used as a residence shown in the declarations or acquired during the policy, on a premises owned by the insured where the insured is not temporarily residing, on farm land or non-vacant land not owned or rented to an insured, or land rented to an insured for business use.

There is no physical damage coverage for snowmobiles except for that under the HO 03 10 00 for those that only service the residence premises or were designed to assist the handicapped. 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 the residence premises or assist the handicapped.

Homeowners Endorsements-Watercraft

Similar to the snowmobile endorsement, the watercraft endorsement HO 24 75 10 00 provides liability coverage only. The endorsement maintains the first four watercraft exclusions, which are:

§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.

Homeowners Endorsements-Incidental Low Power Recreational Vehicle

This endorsement HO 24 13 10 00 provides coverage for a unique type of vehicle, a low power recreational vehicle. Such vehicles are not used for yard maintenance, have speeds slower than fifteen miles per hour, and are used for recreation only. A distinction is made indicating that this type of vehicle does not include motorized bicycles, mopeds, or motorized golf carts, regardless of speed. The best example of this type of vehicle is a motorized vehicle for small children. An NPL Mini Cooper is designed for children between three and seven years of age, has a maximum speed of four miles per hour, has forward and reverse gears, and has a working FM radio. 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.

Homeowners Endorsements-Owned Motorized Golf Cart Physical Loss Coverage

Unlike many of the other endorsements, endorsement HO 05 28 10 00 provides physical damage, not liability, coverage. 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. 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 either be 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 most that is paid for loss to the cart itself is the limit listed on the endorsement. 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 all risk 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.

Standard loss settlement language appears: the lesser of actual cash value, the cost to repair or replace, or the limit of liability that applies to the property.

Automobile Policy

The personal auto policy is designed to cover mainly private passenger autos and trucks or vans weighing less than 10,000 pounds. In addition to automobiles, liability coverage is available for nonowned golf carts. Otherwise, there is no mention of other vehicle types in the policy, and they are not covered by the definition of “your covered auto.” Vehicles with fewer than four wheels or that are designed for use off public roads are excluded. Therefore the Miscellaneous Type Vehicle Endorsement PP 03 23 01 05 is required for these miscellaneous vehicles. This endorsement provides liability, medical payments, uninsured motorists, collision, and comprehensive coverage for vehicles such as motor homes, motorcycles or similar vehicles, all-terrain vehicles, dune buggies, and golf carts. See the related discussion Miscellaneous Type Vehicle Endorsement for an in-depth review of the endorsement. See Miscellaneous Type Vehicle Endorsement.

Another endorsement that provides specific coverage is the PP 03 20 01 05, Snowmobile endorsement. This endorsement provides liability, medical payments, physical damage, and uninsured snowmobilers coverage.

However there is some coverage for other types of vehicles. Any trailer owned by the insured is considered “your covered auto.” While the policy excludes liability coverage for any vehicle with fewer than four wheels or designed for use off public roads, an exception is made for trailers, non-owned golf carts, or any vehicle that is being used by the insured in a medical emergency. If an insured is towing a trailer with his vehicle, the same liability coverage that applies to the vehicle applies to the trailer. Likewise, if the insured is using a golf cart owned by a neighbor, liability coverage is provided.

Medical payments coverage and uninsured motorists coverage treat trailers the same as vehicles. Under medical payments coverage an accident must cause the injury to the insured, but the cause of the accident can be a vehicle or a trailer. Golf carts are not covered under medical payments or uninsured motorists coverage.

In order for physical damage coverage to apply to a trailer, the trailer must be shown in the declarations. While a trailer is part of the definition of “your covered auto,” the policy excludes coverage for trailers that are not shown in the declarations. Facilities and equipment used with a trailer are excluded unless recently purchased by the insured or the insured is using a trailer and equipment he does not own. In this situation coverage applies to both the trailer and the equipment.

Inland Marine

Another source of coverage for miscellaneous vehicles is in the inland marine program. There are five separate forms that attach to the inland marine common policy provisions PM 00 01 12 02 to form a complete policy. The forms are as follows:

PM 00 30 12 02 outboard motors and boats

PM 00 31 12 02 vehicles for handicapped persons

PM 00 32 12 02 motorized ground maintenance vehicles

PM 00 33 12 02 motorized golf carts

PM 00 34 12 02 motorized snowmobiles

These forms help fill the gaps that may be left by using a homeowners or automobile policy with attached endorsements. The forms all allow limited physical damage coverage for damage to property of others. These forms are discussed thoroughly in the Motorized Property article. See Motorized Property. Miscellaneous Personal page A.4.