The combination of exposures to loss connected with ownership of a pleasure boat is not dissimilar to that experienced by automobile owners. In response to these coverage needs, several companies have developed package policies for boat owners that, like automobile package policies, include physical damage, liability, and medical payments insurance. Unlike automobile insurance, however, each boat owners package policy is a particular creation of the insurer that offers it. Most such policies contain similar provisions and conditions, but differences among them need to be considered in light of the individual boat owner's insurance needs. This discussion is based on an analysis of several boat owners package policies that are representative of this type of coverage. And, this discussion is followed by a survey of various insurers' boat owners package policies.

Coverage Under a Homeowners Policy

A certain amount of physical damage, liability, and medical payments coverage is afforded insureds by their homeowners policies. However, the physical damage coverage in standard homeowners forms is limited to $1500 on watercraft, including their trailers, furnishings, equipment, and outboard engines or motors. And, the homeowners policy does not cover loss of watercraft or the furnishings and equipment caused by theft that occurs off the residence premises.

For bodily injury and property damage liability and medical payments to others, coverage provided by the homeowners is limited. Under HO 00 03 10 00, there is no coverage for inboard-outdrive powered boats owned by the insured; however, liability coverage does exist for inboard-outdrives of less than fifty horsepower rented to an insured. Additionally, the following types of watercraft are covered under Section II of the homeowners policy: owned sailboats less than twenty-six feet in length; non-owned sailboats; boats with outboard motors of twenty-five horsepower or less; and, newly acquired watercraft with outboard motors of more than twenty-five horsepower.

Some independently filed homeowners policies provide an increased amount of coverage for watercraft. However, even increased limits may not be sufficient for an insured with a sophisticated recreational boating outfit. Boat owners for whom this limited coverage under HO 00 03 is not adequate may wish to turn to one of the independent, specialty policies for boat owners. The rest of this article describes in general terms the coverages that can be found in these specialty policies. As such, the article may serve as a guide in the examination of any insurer's boat owners policy.