High-risk watercraft: Many policies exclude certain types of high-risk watercraft such as wave runners and jet skis. Special policies are available to cover such craft.
Nonstandard watercraft: These include submersible or air-propelled (hovercraft) watercraft.
Yachts: Generally refers to larger vessels capable of navigating on the high seas. Such craft are normally covered under yacht policies.
Watercraft used for charter: The term “charter” refers to using the insured watercraft for hire, rent, or lease.
High-risk activities: Excluded high-risk activities include powerboat racing in an official race or speed contest, as well as towing individuals paragliding or parasailing. Some policies exclude water skiers towed by the insured craft from medical payments coverage.
Other Issues:
While property damage and liability are coverages common to many types of property insurance, the ownership and use of watercraft present some unique situations, some of which may be covered in a comprehensive watercraft policy.
Wreck removal: Coverage to pay for the removal of a wreck. For example, the Coast Guard or Army Corps of Engineers may deem a partially sunken vessel to be a hazard to navigation and order it to be removed or destroyed.
Salvage charges: Refers to reasonable and necessary expenses incurred to protect a covered watercraft from a dangerous situation where loss or destruction is possible and may also cover a reward to the salvor.
Towing: Some policies may provide coverage for towing a watercraft (on land or in the water) to the nearest repair site, if the craft is damaged by a covered peril.
Longshoremen’s and harbor workers’ compensation: Provides coverage for an insured’s liability, under the Federal Longshoremen’s and Harbor Workers’ Compensation Act, for injury to dockside workers. Coverage is statutory, with the terms of coverage prescribed by federal law. It is usually included as a part of the liability coverage in those states that require it.
Jones Act: Protects the owner of the vessel from liability arising from the death of, or injury to, the captain or crew while on the water.
Understand the Policy – An insurance policy is a written contract between the insured and the insurance company. The protection provided by the policy typically represents a significant part of an individual’s overall risk management program. Thus, it’s important for an insured individual to read and understand key policy provisions such as the following:
What perils are covered in the policy? A basic policy may not provide as much protection as is necessary.
What perils are not covered? For an additional premium, coverage for excluded perils can often be added to a policy.
What are the limits of coverage? The maximum dollar amount the insurance company will pay in the event of a covered loss.
What are the deductible amounts? A deductible is a dollar amount or percentage the insured must pay before the insurance company pays its portion of the loss. In the event of a loss, what are the duties of the insured? A policy will usually list the steps that must be taken in the event of a loss.
Seek Professional Guidance -Insurance agents and brokers, insurance counselors, and other trained financial consultants can help provide answers to detailed questions about a particular policy. These professionals are also helpful in selecting the right policy and the appropriate amount of coverage.
Julie Ngo is a State Farm Insurance Agent located at 28410 Old Town Front Street in Temecula. She can be reached at (951) 695-2625.
