Summary: The Insurance Services Office (ISO) has added forms to its personal inland marine program that may be used for scheduling motorized vehicles and conveyances. Eligible property includes: motorized golf carts; motorized ground maintenance vehicles; motorized snowmobiles; motorized vehicles for the handicapped; and outboard boats and motors.

The forms are: the PM 00 30 12 02 for outboard motors and boats; the PM 00 31 12 02 for vehicles for handicapped persons; the PM 00 32 12 02 for motorized ground maintenance vehicles; the PM 00 33 12 02 for motorized golf carts; and the PM 00 34 12 02 for motorized snowmobiles. As with the other inland marine forms, these forms are attached to the PM 00 01 12 02 common policy provisions to form a complete policy.

Topics Covered:
Introduction
Outboard motor and boat form
Motorized vehicles for handicapped person form
Motorized ground maintenance vehicles form
Motorized golf carts form
Motorized snowmobiles form

Introduction

The Insurance Services Office (ISO) has a series of personal inland marine forms to cover motorized property. In addition to covering this property on a special perils basis, the forms cover newly acquired or replacement property, borrowed or rented property, and coverage for equipment used with these vehicles. A plus is the limited provision of liability coverage for damage to property of others.

These forms may be used to provide broader coverage than that available under standard homeowners forms. They may also be used to provide a separate amount of insurance when an insured does not wish to increase personal property coverage under his or her homeowners.

As is the case with the other personal inland marine forms, these forms must be attached to the common policy provisions form PM 00 01 12 02. (For a discussion of that form, see Personal Articles Form) Following is a discussion of these forms.

These forms exist due to the uniqueness of the property involved. They are not exactly motor vehicles in the sense that they would be covered under a personal automobile policy, yet they do not exactly fall under personal property either. Each type of vehicle is different enough from the others that a separate form is required. Golf carts are different from ground maintenance vehicles, which are different from handicapped vehicles which are different from boats.

Outboard Motor and Boat Form

The outboard motor and boat form PM 00 30 12 02 may be used to cover boats, including rowboats and canoes, that are not more than twenty-six feet in length and designed to be propelled only by one or more outboard motors. Boats that are individually or jointly owned are eligible. Certain types of watercraft, such as hovercraft, flarecraft, or boats equipped with rotors or other apparatus that enables the boat to become airborne are not eligible.

The boat need not be owned by an insured; for example, a boat may be owned by the parents of the insureds who actually possess and use the boat. The boat, outboard motor, trailer (if any) and unscheduled equipment for the boat (anchors, boat covers, oars, cushions, and other attached and detached equipment) are listed on the schedule and an amount of insurance indicated for each. Coverage is rated by territory: land and inland waters except the Great Lakes; or land, inland waters including the Great Lakes and coastal waters.

Newly acquired property—outboard motor boat, trailer, or outboard motor—is covered up to thirty days from taking ownership of the property or the end of the policy period, whichever occurs first. The most that will be paid in event of a covered loss is $5,000 for a boat, or $1,000 for a motor or trailer. Replacement property (property acquired to replace property the insured has disposed of) is automatically insured up to the amount of insurance on the property, or the invoice cost, whichever is less. This coverage ceases within thirty days from taking ownership or the end of the policy period, whichever occurs first. Obviously, coverage continues based on the new amount selected when the insured reports the new or replacement property to the insurer and pays any additional premium.

There is no coverage while the covered property is rented to others, being used to carry persons or property for a charge, being operated in or practicing for any prearranged or organized competition or race; or being used for any business purpose, unless the purpose is strictly business entertainment and there is no financial compensation. But if loss from fire or lightning results, that loss is covered. There is no coverage for “infidelity” of persons to whom an insured entrusts the property, unless the loss is caused by a carrier hired to move or transport the property. “Infidelity” is not a defined term, so the Webster's Collegiate Dictionary definition of “unfaithfulness to a moral obligation” suffices. There is no coverage for wear and tear, marring or scratching, vermin, insects or marine life, ice (unless the boat was improperly winterized by a competent marina or similar facility), or work done to covered property unless fire or explosion results. Then, the ensuing loss is covered. There is often confusion over the exclusion for damage resulting from marine life. The exclusion is intended to preclude coverage for damage done, say, by barnacles or mollusks that attached themselves to the hull. It does not preclude coverage if an insured accidentally runs into a manatee. This is made clear through the exception to the “marring, scratching, chipping or denting” exclusion, which goes on to state “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'.”

Loss resulting from latent defect or inherent vice, electrical or mechanical breakdown, or damage to the hull or motor resulting from undetected flaws in the hull or motor that existed when the hull or motor were built are not covered, but if these cause damage to other covered property that loss is covered. Loss because of the insured's failure to maintain the property in good condition is not covered, nor is any loss of use or consequential loss.

As is common with other personal inland marine forms, values are not agreed upon but are determined at the time of loss. The loss settlement provisions in PM 00 01 are replaced to reflect loss to watercraft. The insurer will only pay for a total loss if the boat is completely destroyed or lost, or if the cost to repair is greater than the amount of insurance. In event of a partial loss, the insurer will pay the least of the amount of insurance, or the cost to repair or replace with materials of like kind and quality. A depreciation deduction will be made for any plastic or canvas coverings or sails.

In event of a loss to a motor or trailer, the least of the actual cash value at the time of the loss, the cost to repair or replace with like kind and quality, or the amount of insurance will be paid. Loss to a newly acquired boat, motor, or trailer is settled on the basis of the least of the cost to repair or replace with like kind and quality, or the limit of coverage. A loss to unscheduled equipment is settled proportionately; that is, the amount the blanket limit of insurance bears to the actual cash value of the lost or damaged property, but in no case no more than $250 for any one item.

Following a loss, the insured has duties similar to those found in the homeowners forms. However, with regard to repairs made to protect property from further damage, those costs are shared by insurer and insured in proportion to the interest of each.

Coverage is based on no deductible; optional deductibles of $25, 50, 100, 250, and $500 are available.

Form PM 00 30 contains limited property damage liability coverage: up to $1,000 (increased limits of $3,000, $5,000, or $10,000 are available) for damage to property of others an 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. The insurer will also pay up to $1,000 for costs incurred by an insured in any suit the insurer defends. If contemplating insurance on this form, boatowners should be made aware that the liability coverage is for property damage only. It will not respond to bodily injury.

Two optional coverages are available when indicated on the declarations. The first is for towing and assistance. Reasonable costs incurred in excess of $100 for emergency repairs to a covered boat while away from safe harbor, or a boat trailer away from the insured's residence, are covered up to $500 for any one incident but not to exceed $1,000 during each separate twelve month policy period.

The second optional coverage is for “protect and recovery costs,” which are costs incurred to recover a covered boat, motor, or trailer that has been damaged by a covered peril so as to protect it from further damage. This coverage also applies to haul a covered boat out of the water if the National Weather Service issues a hurricane watch or warning, and launch it in the same general area after the watch or warning has ended. Coverage is limited to $750 for any one event but no more than $1,500 during each separate twelve-month policy period.

A condition unique to these personal inland marine forms is “reinstatement of amount of insurance after loss.”  This condition states that the amount of insurance for designated items will be reduced by the payment of any claim. However, the insurer will automatically reinstate the amount reduced, and upon determination of the amount of loss, the insured is to pay an additional pro rata premium from the date of loss to policy expiration.

Motorized Vehicles for Handicapped Person Form

A valuable addition to a handicapped insured's insurance portfolio is form PM 00 31 12 02, which provides special perils coverage for these increasingly expensive vehicles. A motorized vehicle is defined as “a motorized land conveyance, described in the Schedule above, including permanently installed accessories, equipment or parts, that is: (1) Designed to assist a handicapped person and used solely by an 'insured'; and (2) Owned by an 'insured' or leased to an 'insured' for at least 30 consecutive days”. An owned or leased trailer designed to be pulled by a motorized land conveyance and used to transport the “motorized vehicle” may also be scheduled. Owned or leased equipment and accessories used with the vehicle or trailer, each with a cost new in excess of $250, may be scheduled. Unscheduled equipment and accessories may be insured on a blanket basis. The schedule requires identifying information such as serial number, model, manufacturer, and year built.

Newly acquired or replacement property is covered for up to thirty days from taking ownership or the end of the policy period, whichever occurs first. This allows the insured time to report the new or replacement property to the insurer, and pay any additional premium due. The limit for the coverage is up to $3,500 for a vehicle, $1,000 for a trailer, and $500 per item for the equipment. A borrowed or rented vehicle, provided it is similar to a covered vehicle, will be covered for the lowest amount of insurance indicated on the schedule for a motorized land conveyance.

Typical inland marine exclusions apply for those things that will occur over time and are therefore uninsurable, such as wear and tear, fungus, mold, or rot, and latent defect. Collision is not covered unless the insured specifically selects this option on the declarations. Damage caused by birds, animals, vermin, insects, or rodents is excluded, but collision with a bird or animal is covered if the collision option has been chosen. There is no coverage for loss to tires or wheels caused by contact with the road or ground, or loss caused by an object on the ground that punctures a tire. There is no coverage for infidelity of persons to whom the property is entrusted, but loss caused by someone hired to move or transport the property is covered. Vandalism is not covered if the premises upon which the covered property is kept has been unoccupied for more than sixty consecutive days. Damage resulting from ordinary use is excluded if the insured has failed to maintain the property. Loss of use or any other consequential act is not covered.

The loss settlement provisions are similar to those on PM 00 30 outboard motor and boat form, except that “motorized vehicle” replaces “boat.” Likewise, the insured's duties following a loss are similar. Deductible options are full coverage, or $100, 200, or $500.

As with the boat form, limited liability coverage for property damage to property of others is included on the form. The damage must be caused by the collision of the covered motorized vehicle while being used by an insured. The basic limit is $1,000, with $1,000 for costs incurred by an insured in any suit the insurer defends. Coverage may be increased to $3,000, $5,000, or $10,000.

A potential value to this coverage is that, in the ISO 2011 homeowners forms, liability coverage for a motorized vehicle designed to assist the handicapped is that “at the time of an 'occurrence', it is: (1) being used to assist a handicapped person; or (2) Parked on an 'insured location'.” A situation could arise whereby an insured child plays on the chair and inadvertently runs it into a neighbor's porch, damaging it. Coverage could be denied under the homeowners form, but not under the inland marine form.

The insured may, as noted above, select coverage for collision. Another option is for emergency repairs, in excess of $50, to the insured's covered vehicle or trailer. Coverage is limited to $250 for any one event, but no more than $500 during each twelve-month policy period.

A condition that does not appear in the boat form is the “other insurance and service agreement, plan or warranty” condition. This is similar to that found in the homeowners forms, in that the insurance of the inland marine form is excess over that in such a warranty or agreement.

Motorized Ground Maintenance Vehicles Form

ISO's motorized ground maintenance vehicles form PM 00 32 12 02 can fill potential gaps in coverage for an ISO 2000 homeowners insured; specifically, the gap left by first defining a covered motor vehicle as one “used solely [italics added] to service an 'insured's' residence,” and the gap caused by the preclusion of liability coverage for motor vehicles not used solely [italics added] to service an insured's residence, or for activities arising out of or in connection with an insured's business. Even though, in the 2000 forms, an activity engaged in for money, for which no insured receives more than $2,000 in the twelve months preceding the policy period, is not considered a “business,” the motor vehicle exclusion would preclude liability coverage if an insured even took a lawn tractor to his parents' house to mow their grass. The 2011 form does not contain this gap, but the 2000 for is still widely used.

The motorized ground maintenance vehicles form eliminates these gaps. First, the definition of a motorized vehicle states that the vehicle should be used primarily, not solely, to service the insured's residence premises. Second, the definition notes that an insured may elect limited business use. “Motorized vehicle” means: “a land motorized conveyance, described in the Schedule above, including permanently installed accessories, equipment or parts, that is: (1) Designed for ground maintenance tasks such as mowing grass, raking a lawn, plowing snow, or tilling or grading soil; (2) Not built or modified after manufacture to exceed a speed of 25 miles per hour on level ground; (3) Owned by an 'insured' or leased to an 'insured for at least 30 consecutive days; and (4) Used primarily at an 'insured's residence unless the Limited Business Use Coverage option applies, and then only to the extent of the permitted business use.”

Similarly to the other forms, the insured must select an amount of coverage for the motorized vehicle and indicate this on the declarations. The insured may also insure a trailer used to haul the covered motorized vehicle, scheduled equipment (detached and detachable accessories, devices, and implements, each with a cost new value of more than $250), and unscheduled equipment and accessories, which are covered under blanket insurance.

The form covers newly acquired or replacement property (the replacement motorized vehicle or trailer must be similar to the ones being replaced) for up to thirty days or the end of the policy period, whichever occurs first. The insured should therefore report as soon as possible the newly acquired or replacement property to the insurer, and pay any additional premium. The limit for newly acquired property is $3,500 for the vehicle, $1,000 for the trailer, and $500 per item for the equipment. A borrowed or rented (for less than thirty consecutive days) vehicle, provided it is similar to a covered vehicle, is covered.

The exclusions are similar to those in the motorized vehicles for handicapped person form, discussed earlier. Collision damage is not covered unless this option has been selected. Other exclusions include loss to covered property while used in any activity engaged in for money (but see the optional coverage, later in this article), loss to tires or wheels caused by contact with the road or ground, or damage by being punctured by an object lying on the ground, infidelity of persons to whom the property was entrusted (except a carrier hired to move the property), wear and tear, freezing or overheating, or failure to maintain the covered property in good condition. For a full list of exclusions, refer to the form. PM 00 32 12 02

The loss settlement provisions are like those already discussed with relation to the other personal inland marine forms, PM 00 30 and PM 00 31. Coverage is on a no deductible basis, but $100, $250, or $500 deductibles are available.

The form includes property damage liability coverage of $1,000 for damage to property of others and $1,000 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.

As noted earlier, the insured may select limited business use coverage. When this option is chosen, the exclusion for loss to covered property used in any activity engaged in for money is deleted. The key here is limited; this is not designed to provide coverage for the insured's full time mowing service. This is designed for the insured who is paid to mow an elderly neighbor's yard in the summer, and paid to help neighbors with snow removal in the winter and other yard maintenance on an occasional basis. The insured may be paid in money or cases of beer, but is compensated some way for his efforts. An exclusion for damage caused by “collision while the vehicle is being used by an 'insured' to mow grass, rake lawns, till or grade soil, plow snow or perform other residential ground maintenance tasks for money or other compensation” is likewise deleted.

In common with the other motorized vehicle forms, the motorized ground maintenance vehicles form contains conditions governing a service plan or warranty being in effect, and the “reinstatement of amount of insurance after loss” condition.

Motorized Golf Carts Form

Although under the ISO homeowners 2011 program an insured can obtain physical damage coverage for an owned golf cart, with collision as an optional peril using endorsement HO 05 28 05 11, the homeowners form is considerably more restrictive in coverage than the inland marine form. The homeowners form does not allow for more than $1,500 coverage on a trailer, and coverage for both trailer and golf cart (with the exception of collision) is on a named peril basis.

Additionally, for liability purposes the golf cart must be used within the legal boundaries of a golf course, or for travel to or from a parking lot or golf cart storage area, to cross a public road to access other parts of the golf facility, or used within a private residential community. (For a discussion of this coverage, see Homeowners Section II Exclusions)

Therefore, to obtain broader coverage an insured might wish to use the motorized golf carts form PM 00 33 12 02, rather than relying on the homeowners form. Of course, another option is to endorse coverage onto an auto policy using endorsement PP 03 23 01 05 miscellaneous type vehicles. Or, an insured homeowner on a non-ISO form or on a 1991 ISO form might use the form to obtain coverage not otherwise available.

A “golf cart” is defined as “a motorized land conveyance, described in the Schedule above, including permanently installed accessories, equipment or parts, that is: (1) Designed to carry up to four people on a golf course for the purpose of playing golf; (2) Used for other personal pleasure activity; (3) Owned by an 'insured' or leased to an 'insured' for at least 30 consecutive days; and (4) Not built or modified after manufacture to exceed a speed of 25 miles per hour on level ground.” Note that there is no requirement that the golf cart be used within the confines of a private residential community, as there is in the 2000 or 2011 homeowners.

As is the case with the other forms, PM 00 30, PM 00 31, PM 00 32, and PM 00 33, the insured selects an amount of insurance for the golf cart and, if desired, for a trailer used to haul the golf cart, scheduled equipment (detached and detachable accessories, equipment or parts, each with a cost new value of more than $250), and unscheduled (blanket insurance) equipment. Collision coverage is available as an option.

Newly acquired property is covered: the cost of the item to the insured up to $5,000 for a cart, $1,000 for a trailer, and $500 per item for equipment. Coverage for newly acquired or replacement property ceases thirty days after the insured takes ownership, or the end of the policy period, whichever occurs first, if the insured does not report the new or replacement property to the insurer and pay any additional premium. Borrowed or rented (for less than thirty days) golf carts are covered provided it is similar to a scheduled golf cart.

Exclusions, loss settlement provisions, and reinstatement of insurance conditions are similar to those in the other forms, discussed earlier. The form bases coverage on a $500 deductible; a $1,000 deductible is available.

As with the other forms, property damage liability and costs incurred by an insured in the amount of $1,000 for each is included. Other amounts—$3,000, $5,000, or $10,000—are available.

Motorized Snowmobiles Form

Although many homeowners forms provide limited liability coverage for a snowmobile or other recreational motor vehicle, few automatically provide physical damage coverage. The ISO forms, for example, do not. Form PM 00 34 12 02 provides an alternative to endorsing liability coverage to the homeowners, or adding the miscellaneous vehicle endorsement PP 03 23 01 05 (although three advantages to PP 03 23 are, one, the insured can add the “passenger hazard” whereby liability for injury to a passenger is covered, two, uninsured/underinsured snowmobile coverage can be included, and three, unless company underwriting dictates otherwise there is no vehicle speed limitation).

The form defines a snowmobile as “a motorized land conveyance, described in the Schedule above, including permanently installed accessories, equipment, or parts, that is: (1) Designed to transport one or two people on snow-covered ground; (2) Not built or modified after manufacture to exceed a speed of 50 miles per hour on level ground; (3) Owned by an 'insured' or leased to an 'insured' for at least 30 consecutive days; and (4) Used only for personal pleasure.”

The motorized snowmobiles form, in common with the other forms, allows the insured to schedule coverage for a snowmobile, trailer, equipment (items with a cost new value of at least $250), and add unscheduled (blanket insurance) equipment. Collision coverage is an option. Newly acquired property is covered up to $5,000 for the snowmobile, $1,000 for the trailer, and $500 per item for equipment. For newly acquired or replacement property, coverage is extended for thirty days from acquisition or the end of the policy period, whichever occurs first. Thus, the insured has automatic coverage to allow time to contact the insurer and pay any additional premium.

Exclusions mirror those of the other forms except where altered to reflect the snowmobile exposure (for example, loss to tires is replaced with loss to tracks). Likewise, the loss settlement, duties after loss, reinstatement of limits, and the other insurance or service plan conditions are the same as those of the other forms. The form is based on a $500 deductible; an optional $1,000 deductible is available.

As was the case with the other forms, the PM 00 34 includes liability coverage for property damage. Limits of $1,000, $3,000, $5,000, or $10,000 are available. While the liability coverage is not limited to the snowmobile's being operated on an “insured location,” as is the case with the homeowners forms, the inland marine form does not provide liability coverage for bodily injury. Because accidents involving snowmobiles frequently involve bodily injury, an insured should weigh the advantages of covering a snowmobile on a personal auto policy (PAP).