Insurance on yachts and pleasure boats, personal watercraft, houseboats and marinas and recreational vehicles are special classes of business not usually written by retail agents in their standard companies. For this reason, a number of specialty managing general agents have been established to handle yacht and pleasure boats or recreational vehicles as specialty lines. Many of these offices provide facilities only for watercraft. Others are exclusive managers of insurance for marinas and watersports rental. Some facilities handle all classes, while others, that offer a general line of property and casualty insurance products, include yachts and pleasure craft and recreational vehicles in their offerings to agents and brokers.
The following is a description of the classes of business for personal marine and recreational vehicles coverages, as well as a list of markets that offer coverages for these units.
Antique and Classic Boats
Antique and classic boats are defined as vessels other than the ordinary manufactured pleasure boat. Standard insurers writing pleasure boats and yachts are not interested in most wooden-hull boats, custom-builts or boats of a highly unusual nature. Antique and classic boats are those built 25 or more years ago. Most wooden boats and some older classic fiberglass boats would qualify for this category. The boat must be seaworthy to qualify for coverage on an all-risk, full marine basis. Coverage is written for agreed value on the hull. The policy also includes liability coverage, uninsured boaters, medical payments, personal effects and trailers. Business is often produced on an association basis, i.e., all owners of Chris Craft antique boats.
High Performance Boats
This is a type of pleasure boat designed to provide high performance for cruising, waterskiing, etc. Insurance is a broad form marine policy covering personal and business-owned vessels capable of speeds up to 100 m.p.h. Hull and liability coverage, including medical payments, personal effects, and uninsured boaters is usually sold as part of a package. Limits generally extend up to $500,000 for hulls and $1 million for liability. Policies are issued at agreed value with named operator warranty. Extended land transit coverage, transit and storage only, and machinery damage coverage are available as options. Extended navigation areas are available. Single or multi-hulls are eligible.
Underwriters consider houseboats in the same category as yachts and pleasure craft. Rates, insuring conditions and coverages are similar. Hull and liability coverages are written on the yacht form. Because of the construction of houseboats, they are more unwieldy than the sleeker yacht and therefore are not easily navigated and are less seaworthy in rough water.
The houseboat is usually powered by an inboard/outboard drive with single or twin engines up to 400 h.p. Values, including luxury fittings, may range up to $50,000 or more. The policy is underwritten on the basis of the experience of the owner or pilot, use of the boat, length of time in the water, and the rate area in which the boat is navigated. The policy includes hull, boat equipment, personal effects, liability, medical payments and uninsured boaters coverage. The policy is subject to a minimum deductible. Houseboats are rated according to the value of the boat. Most underwriters rate houseboats higher than sailboats but lower than powerboats. The liability and waterskiing/towing liability is rated as a flat charge in accordance to the limit of liability. Additional flat charges are made for miscellaneous boat equipment, personal effects and medical payments.
Personal Watercraft (Jet Skis)
This class of watercraft encompasses a wide range of single-engine, inboard-powered vessels no greater than 16 feet in length and using a water-jet pump as the primary source of propulsion. Operators/passengers may either stand up, sit upon (motorcycle style), or sit in the unit depending on the manufacturer. Included in this class are jet ski, waverunner, tigershark, wet bike and sea dog "cycle" style models, as well as jazz and rage "mini boats."
Exposures include high performance and handling characteristics coupled with minimum operator and passenger protection. Waterskiing and other towing activities have become additional exposures as the power of these units increases. Coverage includes hull, liability and medical payments. Units are valued on an actual cash value basis. Trailers and waterskiing liability can be added. Personal watercraft insurance is rated on the basis of engine size for physical damage coverage. Liability, waterskiing liability, trailers and medical payments are added as a flat rate. Liability limits are available generally to $300,000.
This is an important class of business for yacht and pleasure boat owners. Marinas provide mooring facilities, repair, alteration, maintenance, storage, fueling, and many other services for the pleasure boat owner. Coverage under a marina package policy includes property, general liability, marina operators legal liability, protection and indemnity insurance, boat dealers inventory, work boat hull, and piers, wharves and docks coverage. The marina operators legal liability policy covers the legal liability of the marina operator for loss of or damage to private pleasure boats while in the operator's care, custody or control. The policy closes the gap left by the "care, custody and control" exclusion of the general liability policy. The premium is based on gross receipts. Watersports rental insurance is available for marinas that rent out personal watercraft, pleasure boats, kayaks, water skis and wind surfers. Insurance operations such as parasailing and chartered boats can be arranged.
Rental of all types of watercraft from personal watercraft to houseboats has become an increasingly popular alternative to ownership of a boat. Coverage is afforded to the owner of the rented watercraft not the renter. Liability, hull damage, and watersports liability coverages are available. Underwriters require use of a written rental agreement containing appropriate "hold harmless" language. Hull coverage is generally written on an actual cash value basis. Premium is based on gross receipts.
Yachts and Pleasure Boats
Package policies are available for most types of power or sailing vessels. The policy is usually written on an all-risk basis covering both the physical damage (hull) and liability risks. Optional coverage is available for passenger liability, equipment, trailers and waterskiing liability and medical payments. Limits for hulls may be for small boats and yachts up to 60 feet for values up to $1 million. For larger "mega" yachts up to 200 feet, values may extend to $20 million. Liability limits are generally between $300,000 and $2 million, but some large yachts may be written for as high as $50 million. The usual limited liability available for waterskiing is $25,000. Premium is based on size of boat, horsepower, navigational range and experience of operator. Boats older than 25 years are generally written under separate antique and classic boat programs.
These are vehicles that can travel anywhere--through water, snow, muck and sand--go up and down steep slopes and climb over rocks, tree stumps or brush. ATVs have four, six or eight wheels, depending on the type or model. The vehicle is excluded under auto and homeowners policies, but may be written on special combination physical damage and liability policies. Liability limits do not exceed $100/$300 or $250/$500. The coverage does not apply while these vehicles are being driven on public highways. The policies are rated similar to snowmobiles and motorcycles.
These are vehicles generally used for camping and other recreational purposes. They are defined as self-propelled land motor vehicles, designed and constructed to provide facilities for sleeping and cooking. Underwriters have designed special packages for the combination of physical damage and liability coverages. Policies include vehicles, permanently attached equipment, accessories and personal effects. Liability, medical payments coverage, collision and comprehensive, uninsured motorists and vacation expense insurance is included or optional.
Special policies, either combination physical damage and liability or liability only coverage, are available for motorcycles, mountain bikes or dirt bikes. Coverage under package policies includes the vehicle and accessories, liability, uninsured motorists and medical services. Passenger liability may be added. Liability limits rarely exceed $250/$500/$100. Programs are available for big bikes and classic and vintage bikes. Policies are rated on the basis of CC displacement, age of the vehicle and age of driver.
These vehicles are written under special physical damage and liability combination policies. They are off-road vehicles and are ineligible under auto and homeowners policies. Accessories and medical payments coverages may be added. The policies are rated similar to motorcycles and ATVs.
Trailers and Campers
These are vehicles pulled by automobiles to camping sites. Programs are for regular use including comprehensive coverage, personal effects and off-road liability. For stationary use coverage includes comprehensive, adjacent structures, personal effects and comprehensive personal liability.