UNDERSTANDING WATERCRAFT & UMBRELLA INSURANCE (203 & 204E)

Transcription

1 1/06 UNDERSTANDING WATERCRAFT & UMBRELLA INSURANCE (203 & 204E)

2 PUBLISHER S NOTE IMPORTANT NOTICE EVERY CARE HAS BEEN TAKEN TO ENSURE THAT THE INFORMATION IN THIS GUIDE IS AS ACCURATE AS POSSIBLE AT THE TIME OF PUBLICATION. PLEASE BE ADVISED THAT LAWS AND PROCEDURES ARE CONSTANTLY CHANGING AND ARE ALSO SUBJECT TO DIFFERING INTERPRETATIONS. HOWEVER, NEITHER THE AUTHORS NOR THE PUBLISHERS ACCEPT ANY RESPONSIBILITY FOR ANY LOSS, INJURY, OR INCONVENIENCE SUSTAINED BY ANYONE USING THIS GUIDE. THIS INFORMATION IS INTENDED TO PROVIDE GENERAL INFORMATION AND BACKGROUND AND IS DISTRIBUTED ON THE BASIS THAT THE AUTHORS ARE NOT ENGAGED IN RENDERING LEGAL, ACCOUNTING, OR ANY OTHER PROFESSIONAL SERVICE OR ADVICE. THIS GUIDE WAS DESIGNED TO GIVE YOU AN OVERVIEW OF THE INFORMATION PRESENTED AND IS NOT A SUBSTITUTE FOR PROFESSIONAL CONSULTATION AHI Insurance Services 07/04 Cpyright 2004 AHI Insurance Services All rights reserved. Printed in the United States f America. N part f this publicatin may be used r reprduced in any frm r by any means, transmitted in any frm r by any means, electrnic r mechanical, fr any purpse, withut the express written permissin f AHI Insurance Services, Inc. Making cpies f this bk fr any purpse ther than yur wn persnal use is a vilatin f the United States cpyright laws. AHI CE SERVICES W GRAND AV FRANKLIN PARK, IL TOLL FREE: (800) (847) FAX: (847) INTERNET: 1/06

3 TABLE OF CONTENTS PUBLISHER S NOTE I CHAPTER I: WATERCRAFT INSURANCE OVERVIEW 1 HOMEOWNERS INSURANCE AND BOATS...2 BOAT POLICIES...2 CLAIM PAYMENT...2 LIABILITY COVERAGE...3 EXCLUSIONS...3 MEDICAL PAYMENTS COVERAGE...3 UNINSURED BOATERS COVERAGE...3 LIMITATIONS...4 YACHT POLICIES...4 HULL INSURANCE...4 PROTECTION AND INDEMNITY COVERAGE...4 OPTIONAL COVERAGE S...4 LIMITATIONS...4 PERSONAL WATERCRAFT INSURANCE...4 COST...4 BOAT SAFETY CONSIDERATIONS...5 CHAPTER 2: BASIC WATERCRAFT POLICY STIPULATIONS 6 HULL AND TRAILER LOSS EXPOSURES...7 HOMEOWNER'S POLICY - PHYSICAL DAMAGE COVERAGE...7 PERSONAL AUTO POLICY - PERSONAL DAMAGE COVERAGE...7 LIABILITY LOSS EXPOSURES...7 HOMEOWNER'S POLICY LIABILITY COVERAGE...8 OUTBOARD MOTOR AND BOAT INSURANCE...8 COVERED PERILS...8 EXCLUSIONS...9 WATERCRAFT PACKAGE POLICIES...9 LIABILITY COVERAGE MEDICAL PAYMENTS COVERAGE...10 OTHER COVERAGE S...10 EXCLUSIONS...10 PERSONAL YACHT INSURANCE...11 HULL INSURANCE...11 PROTECTION AND INDEMNITY INSURANCE...11 OPTIONAL COVERAGE S...11 WARRANTIES...11 UNINSURED BOATERS COVERAGE...12 CHAPTER 4: SPECIALTY COVERAGE MARKETS 13 ANTIQUE AND CLASSIC BOATS...13 HIGH PERFORMANCE BOATS...13 HOUSEBOATS...13 PERSONAL WATERCRAFT (JET SKIS)...13 MARINAS...14 WATER SPORT RENTALS...14 YACHTS AND PLEASURE BOATS...14 BASS BOAT INSURANCE...14 MEXICAN LIABILITY COVERAGE...14 CHAPTER 5: THE JONES ACT 16 UNDERSTANDING THE JONES ACT...16 WHO IS A SEAMAN?...16 MAINTENANCE AND CURE...16 i

4 UN-SEAWORTHINESS...17 JONES ACT - STATUTE OF LIMITATIONS...17 LEGAL DAMAGES UNDER THE JONES ACT?...17 LEGAL REMEDIES FOR SURVIVING FAMILY...17 STEPS TO RECOVERY...18 JONES ACT CASE STUDIES...18 JONES ACT-DETERMINING CLAIMS...23 CHAPTER 6: UNDERWRITERS 25 AIMU MEMBER SERVICES...25 AIMU CARGO INSURANCE RESTRICTIONS...25 U.S. RESTRICTIONS...25 OFAC REGULATORY COMPLIANCE...25 FOREIGN RESTRICTIONS...26 WTO TRADE AGREEMENTS...40 MARINE THEFT...40 BOATS AND EQUIPMENT...41 BOATS AND TRAILERS...42 VESSEL SECURITY...42 DOCK SECURITY & MARINE WATCH...42 PREVENTING FRAUD IN BUYING A BOAT...42 LIFE JACKETS & SAFETY...43 WHO NEEDS PFD S?...43 PFD REQUIREMENTS...43 WHAT IS A LIFE VEST?...44 FIRE EXTINGUISHER REQUIREMENTS...47 PREVENTING PROPELLER & BOAT STRIKE ACCIDENTS...49 TRAILERING A BOAT WITH SAFETY IN MIND...50 TOWING PRECAUTIONS...51 PRE-LAUNCHING PREPARATIONS...51 PERSONAL WATERCRAFT SAFETY PROJECT CODE OF ETHICS...52 LEGAL PWC REQUIREMENTS...53 CHAPTER: 8 TRAVEL INSURANCE 55 THE BASICS OF TRAVEL INSURANCE...55 TYPES OF COVERAGE...55 TRIP CANCELLATION COVERAGE...55 COST OF COMPREHENSIVE TRAVEL INSURANCE...56 THE EFFECTS OF SEPTEMBER 11, TYPES OF TRAVEL POLICIES...57 PACKAGE POLICIES...57 TRAVEL MEDICAL POLICIES...57 FLIGHT ACCIDENT POLICIES QUOTE COMPARE...57 CHAPTER 9: BASIC QUESTIONS ON UMBRELLA INSURANCE 57 THE NEED FOR AN UMBRELLA POLICY...57 WHAT IS A PERSONAL UMBRELLA POLICY?...58 SPECIAL PROTECTION IS AFFORDED BY AN UMBRELLA POLICY?...58 DIFFERENCES IN PERSONAL UMBRELLA POLICIES...58 HOW DOES THE POLICY WORK...58 DEDUCTIBLES...58 OTHER EXCLUSIONS IN AN UMBRELLA POLICY...58 CHAPTER 10: RISK MANAGEMENT 59 THE PROCESS OF RISK MANAGEMENT...59 IDENTIFYING LOSS EXPOSURES...59 PROPERTY LOSS EXPOSURES...60 LIABILITY LOSS EXPOSURES...60 ii

5 EVALUATING LOSS EXPOSURES...61 SELECTING THE BEST WAY TO HANDLE RISK...61 IMPLEMENTING A RISK MANAGEMENT PLAN...62 MONITORING THE PLAN...62 PRIMARY INSURANCE POLICIES...63 HANDLING LIABILITY LOSS EXPOSURES...63 HANDLING PERSONAL INJURY LIABILITY...64 THE STRUCTURE OF PRIMARY POLICIES...64 CHAPTER 11: THE NEED & PURPOSE OF UMBRELLA INSURANCE 66 THE NEED...66 IDENTIFYING GAPS IN LIABILITY COVERAGE...66 PURPOSE OF UMBRELLA POLICIES...67 CHARACTERISTICS OF UMBRELLA POLICIES...68 CHAPTER12: BASIC POLICY COMPONENTS 69 PERSONAL UMBRELLA LIABILITY POLICIES...69 BASIC POLICY COMPONENT PARTS...70 DECLARATIONS...70 DEFINITIONS...70 INSURING AGREEMENTS...70 CONDITIONS...70 EXCLUSIONS...70 MISCELLANEOUS PROVISIONS...70 DECLARATIONS PAGE...70 INSURING AGREEMENTS...70 DEFINITIONS...70 CONDITIONS...71 EXCLUSIONS...71 MISCELLANEOUS PROVISIONS...71 REQUIREMENTS OF A LEGAL CONTRACT...72 OFFER AND ACCEPTANCE...72 CONSIDERATION...72 COMPETENT PARTIES...72 LEGAL PURPOSE...73 LEGAL FORM...73 CHAPTER 13: COMMON UMBRELLA CONDITIONS 74 KNOWING POLICY CONDITIONS...74 UNDERSTANDING POLICY CONDITIONS...74 COMMON PERSONAL UMBRELLA CONDITIONS...75 UNDERSTANDING INSURING AGREEMENTS...75 COVERAGE RESTRICTIONS...76 INSURED...76 ULTIMATE NET LOSS AND RETAINED LIMIT...76 PERSONAL LIABILITY...77 EXCESS VERSUS PERSONAL UMBRELLA LIABILITY INSURANCE...77 REQUIRED UNDERLYING LIMITS...78 FAILURE TO PROVIDE UNDERLYING LIMITS...78 SUMMARY...79 RESTRICTIONS AND EXCLUSIONS...79 UNDERSTANDING POLICY RESTRICTIONS...79 CHAPTER 14: THE UNDERWRITING PROCESS 80 IDENTIFYING AND SELECTING A RISK...80 GATHERING, ORGANIZING AND ANALYZING UNDERWRITING INFORMATION...80 PERSONAL INFORMATION...81 PROPERTY LOSS EXPOSURES...81 iii

6 GENERAL INSURANCE INFORMATION...82 ACCEPTING OR REJECTING THE RISK...82 ISSUING THE POLICY...83 MONITORING THE RISK...83 CHAPTER 15: COMMERCIAL INSURANCE 84 OVERVIEW...84 HISTORY OF THE COMMERCIAL PACKAGE POLICY CONCEPT...84 STRUCTURE AND TERMINOLOGY OF COMMERCIAL INSURANCE POLICIES...85 STRUCTURE OF THE POLICY...85 THE NAMED INSURED...85 THE NAMED PERIL FORM VERSUS THE ALL-RISK FORM...85 THE ACTUAL CASH VALUE VERSUS REPLACEMENT COST...85 THE CO-INSURANCE CLAUSE...86 ASSESSING INSURANCE RISKS AND NEEDS...86 FARM OWNERS PACKAGE POLICIES...86 INTRODUCTION...86 HISTORY OF THE POLICY...86 POLICIES CURRENTLY AVAILABLE TO FARMERS...87 PROPERTY REPLACEMENT IN CASE OF LOSS IN ALL FARMERS POLICIES...87 BASIC PERILS PROPERTY COVERAGE S...87 BASIC PERILS POLICY EXCLUSIONS...88 BROAD NAMED PERIL PROPERTY POLICY (SECTION I)...89 BROAD PERIL PROPERTY COVERAGE S...89 BROAD NAMED PERIL EXCLUSIONS...89 FALLING OBJECTS...89 WEIGHT OF ICE, SNOW AND SLEET...89 GLASS BREAKAGE...90 WATER ESCAPE OR WATER DAMAGE...90 FREEZING OF PLUMBING, HEATING AND AIR-CONDITIONING...90 MISAPPROPRIATION, CIVIL AUTHORITY, WAR, INSURRECTION AND NUCLEAR REACTION...90 ALL-RISK PROPERTY POLICY...90 ALL-RISK PROPERTY COVERAGE S...90 ALL-RISK PROPERTY EXCLUSIONS...90 EXCLUDED PROPERTY OF THE BASIC, BROAD PERILS AND ALL-RISK POLICIES...91 MONETARY LIMITATIONS FOR LOSS...91 LIABILITY COVERAGE S OF THE BASIC, BROAD AND ALL-RISK FORMS (SECTION II)...92 PERSONAL LIABILITY COVERAGE S...92 PERSONAL INJURY LIABILITY...92 PERSONAL INJURY EXCLUSIONS...93 EXTENSIONS OF LIABILITY COVERAGE...93 WORKERS' COMPENSATION AND EMPLOYERS' LIABILITY...93 ADDITIONAL INSURANCE AVAILABLE TO FARMERS...93 CROP HAIL INSURANCE...93 LIVESTOCK MORTALITY INSURANCE...94 LIVESTOCK MORTALITY INSURANCE EXCLUSIONS...94 ENVIRONMENTAL AND GENERAL LIABILITY EXPOSURES...97 ASBESTOS UMBRELLA POLICY...98 SECURED CREDITOR IMPAIRED PROPERTY POLICY (SECURED CREDITOR)...99 PROFESSIONAL PACKAGE POLICY PROFESSIONAL PACKAGE UMBRELLA COVERAGE ENVIRONMENTAL SURETY PROGRAMS CONTRACTORS POLLUTION OCCURRENCE (CPO) FOR CONTRACTORS CONTRACTORS PROFESSIONAL AND POLLUTION LIABILITY ABATEMENT UMBRELLA ASBESTOS/LEAD ABATEMENT LIABILITY INSURANCE iv

7 OWNERS SPILL LIABILITY (OSL) - COVERAGE PART I WITHIN POLLUTION LEGAL LIABILITY SUPPLEMENTAL ENVIRONMENTAL AUTOMOBILE LIABILITY OWNER CONTROLLED INSURANCE PROGRAMS (OCIPS) OWNER'S PROTECTIVE ENVIRONMENTAL LIABILITY INSURANCE (OWNER'S PROTECTIVE) CLOSURE/POST CLOSURE (CPC) ENVIRONMENTAL PROTECTION PROGRAM (EPP) IMPORTANT TERMINOLOGY CHAPTER 16: ETHICAL CONSIDERATIONS 122 PERCEPTIONS OF ETHICS ETHICS FOR INSURANCE AGENTS ETHICS FOR INSURANCE BROKERS CHARACTERISTICS OF A PROFESSIONAL FIDUCIARY RESPONSIBILITIES THE CONCEPT OF AGENCY ESTOPPEL RATIFICATION EXPRESS AUTHORITY IMPLIED AUTHORITY APPARENT AUTHORITY THE AGENT AS A FIDUCIARY LOYALTY TO THE INSURER SKILL AND PERFORMANCE FULL DISCLOSURE FOLLOW UP HANDLING OF PREMIUMS AVOIDING CONFLICTS OF INTEREST RESPONSIBLE SOLICITATION COMPETITIVE INTEGRITY PRINCIPAL'S RESPONSIBILITIES RESPONSIBILITIES TO CONSUMERS & CLIENTS SERVICE BEGINS WITH THE APPLICATION TWO BASIC RISK MANAGEMENT RULES ARE: RISK MANAGEMENT TECHNIQUES INCLUDE: RESPONSIBILITIES TO THE GENERAL PUBLIC THE ENFORCEMENT OF ETHICS MAKING DECISIONS ETHICALLY CODE OF ETHICS CANONS AND RULES v

8 CHAPTER I: WATERCRAFT INSURANCE OVERVIEW Whenever the insurance industry deals with a prduct that depends a great deal n the ecnmy, the pricing f that prduct will certainly have peaks and valleys. Recreatinal "tys" fall int that categry. Pleasure bats and persnal watercraft are nt n mst peple's buy list when the ecnmy is nt very predictable. Additinally, sme states d nt allw persnal watercraft (PWC) units n public waterways due t pllutin/chemical issues and nise issues. Fr an individual t invest $10,000 and up fr a luxury item that may need t be transprted sme distance, and whse peratinal csts rise n a cntinues basis, makes this type f purchase a luxury fr mst cnsumers. The market fr watercraft has been decreasing verall due t fewer carriers, declining capacity and lsses. Carriers are nw charging fr cverage that was waived during the prir market pricing. The increase in insurance fraud regarding the bating industry is a majr factr fr underwriters t accurately and prperly price and evaluate risks. A recent insurance Research Cuncil and Insurance Office survey taken amng 343 insurance carriers shwed that 40% f the insurance carriers are spending mre n the battle against insurance fraud tday than ever befre. "Sft fraud" (the exaggeratin f therwise legitimate claims) is far mre frequent than "hard fraud" (the deliberate attempt t stage lsses ften cmmitted by rganized crime). The prevalence f 'sft fraud' adds mre t the verall claims cst than 'hard fraud.'" Watercraft theft is n the rise natinwide. Bat thefts cst the bating cmmunity between $85 millin and $125 millin each year, accrding t the Wiscnsin Department f Natural Resurces (DNR). Apprximately 27,000 bats are reprted stlen each year and f thse, 90% are less than 20 feet in length. One f the majr factrs regarding fraud and theft claims is that there is n unifrmity in watercraft registratin dcumentatin. Currently, 19 states have n requirements that a title must be presented in rder t register a watercraft; 13 states require n prf f wnership; and 10 states require neither a title nr a prf f wnership. Unless states mandate bat licensing and registratin, the bating cmmunity needs t address establishing bth minimum peratr ages and mandatry bating educatin standards in rder t curtail fraud. A unifrm system f state watercraft registratin which is unifrm cuntrywide, that requires prf f wnership and prf f insurance, wuld help the insurance industry fight against fraud, bat theft, and a serius increase in frequency f uninsured baters claims. Knw yur prduct and have fun. That's the attitude taken by Andrew Andersn, executive vice president f Andersn Insurance Agency f Lng Beach Island, New Jersey. This independent insurance agency writes mre than 500 bats, yacht, and ther plicies and has its wn in-huse marine department. The Andersn Agency als places cverage n cmmercial fishing bats, marina and bat dealer risks and difficult-t-place bats. Bat insurance is usually purchased because the client sees value in the cverage. Adding the watercraft plicy t the client's umbrella plicy if the client has ne ften makes gd cmmn sense. A client purchasing a large vessel is nw a 'higher prfile' member f the cmmunity; and it is pssible that mre will be demanded frm them if they injure smene. Pleasure craft with gd lss experience are seeing mdest rate increases (in the area f 10% t 15%) while thse with adverse lss experience are finding cverage difficult t impssible t secure. Sme underwriters skillfully underwrite a tugher risk by excluding certain types f equipment frm cverage r impsing ther restrictive cnditins n the plicy as a way f making the risk acceptable. A skilled marine underwriter can make the difference in this unique field f underwriting. Sme underwriters have expertise in a particular gegraphical regin r with a particular type f bat. Underwriters want a cmplete picture the first time they lk at the risk. IMVRs fr all peratrs and hardcpy lss runs fr the difficult risk shuld be included in the submissin t the underwriter. Agents need t knw what the insurers are willing t write. An agent shuld becme familiar with bating terminlgy if they are interested in pursuing the bat insurance business. Attending a bat shws, reading bat magazines r visiting a bat dealership can learn a lt. If smene wns a bat r ther watercraft, when spring arrives their thughts prbably turn t water, skimming acrss the waves r spending lng afternns drifting n a tranquil lake. Insurance is prbably the furthest thing frm their mind. But bat wnership requires a special need fr insurance. 1

9 Bat wnership expses them t many f the same risks as autmbile and hme wnership, including the risk f causing bdily injury t ther peple, damage t thers' prperty, r damage t their wn prperty. State law may require them t carry a minimum amunt f insurance n their bat. And if they have an utstanding bat lan, their lender prbably requires them t carry full insurance n the bat. Additinally, many marinas and yacht clubs wn't allw them t dck their bat unless they re insured. Whether required r nt, it's a gd idea t have insurance n their vessel. HOMEOWNERS INSURANCE AND BOATS Hmewners insurance usually includes limited cverage fr small watercraft. A typical hmewners plicy prvides $1,000 wrth f cverage fr physical damage that ccurs while their bat is stred at their hme. Hmewners insurance may als prvide sme persnal liability cverage t prtect against claims resulting frm negligent peratin f their bat, but the amunt f this cverage is nt substantial. Jet skis and ther similar watercraft are ften excluded frm hmewner s insurance cverage. Additinal cverage can be btained by purchasing a bat plicy, a yacht plicy, r a persnal watercraft plicy. But in rder t knw what type f insurance an individual needs, they have t knw what type f vessel they wn. In the insurance wrld, watercraft are typically divided int three categries: Bats. Generally includes watercraft between 16' and 25' 11" in length, Yachts. Generally includes nly watercraft which are 26' r lnger, Persnal watercraft. Includes nly jet skis, wave runners, and ther similar craft. This discussin deals with recreatinal watercraft nly and separate plicies are available fr water taxis and ther cmmercial watercraft. BOAT POLICIES A bat plicy is a package cntract, similar in many ways t autmbile insurance. While there may be sme variatin in bat plicies, the main types f cverage are physical damage and liability cverage. Many bat plicies als include legal defense prtectin, medical payments cverage, and uninsured bater cverage. Physical damage cverage typically pays t repair r replace the bat if it is damaged r destryed by fire, lightning, hail, windstrm, hurricane, trnad, explsin, cllisin, capsizing, sinking, vandalism, r theft. Cvered perils may vary frm plicy t plicy In additin t the bat itself, utbard mtrs, trailers, and persnal prperty kept abard the bat are cvered by mst bat plicies. The insurer typically will als pay t prtect the vessel frm further damage in the event f a mishap, r t recver the bat if it sinks r becmes stranded. Physical damage, which results frm any f the fllwing, is typically excluded frm cverage: Wear and tear, latent defect, mechanical breakdwn, faulty manufacturing, war, and nuclear hazard, Repair r restratin, Carrying peple r prperty fr a fee, Using prperty in a fficial race, Using fishing gear and prtable electrnic, phtgraphic, and water sprts equipment. CLAIM PAYMENT In the event f damage r theft, the amunt f the claim payment will be determined using ne f the fllwing methds: Replacement cst- Payment is sufficient t replace the prperty, Agreed value- Payment is limited t a specific amunt stated in the plicy, Actual cash value- Payment is limited t the depreciated value f the prperty. The plicy will state which f the abve methds will be used t settle the claim. 2

10 Sme insurance cmpanies autmatically use an agreed value fr bats under 15 years f age, and actual cash value standard fr bats lder than that. Certain items (such as sails and utbard mtrs) are almst always cvered n an actual cash value basis. Given a chice, replacement cst cverage is generally mst advantageus t the insured, and may be required by the lender (if applicable). Liability cverage is the mst critical cmpnent f any watercraft insurance. Liability claims against the insured fr bdily injury and prperty damage can easily reach $100,000 r mre, depending n the severity f the accident. If an individual has inadequate liability cverage (r nne at all), a sizable claim against them can put their hme, savings, and ther assets in jepardy. LIABILITY COVERAGE Liability cverage prvides prtectin fr legal claims if the insured is fund liable fr a bating accident. It typically cvers the legal and financial cnsequences f accidental bdily injury r death, as well as damage t ther bats, dcks, and persnal prperty. Cverage is usually extended t the insured, family members, and thers wh perate the bat with the insured s permissin. In tday's litigius sciety, huge persnal liability judgments are nt unusual. Cnsequently, the cverage in this area shuld be as high as needed t shield their assets and future earnings. Liability cverage is typically available in amunts ranging frm $100,000 t $1,000,000. Fr additinal prtectin, the insured shuld cnsider purchasing a persnal umbrella liability plicy. EXCLUSIONS Liability cverage under a bat plicy generally cntains a number f exclusins. The fllwing is a list f cmmn exclusins; hwever, different plicies may differ: Bdily injury r prperty damage that is expected r intended by the insured, Liability f any persn using the insured watercraft withut permissin, Damage t prperty wned by r in the care, custdy, and cntrl f the insured Injury t persns eligible fr wrkers' cmpensatin benefits, Liability f a persn engaged in the business f selling, repairing, string, r mving watercraft, Legal defense prtectin. Legal defense cverage is typically ptinal under a bat plicy. It usually cvers legal defense csts fr lawsuits brught against the insured fr damage caused by an unauthrized persn perating their bat. Curt csts; attrney's fees, and investigatin expenses are nrmally cvered. MEDICAL PAYMENTS COVERAGE Bat plicies may als include medical payments cverage, which pays fr medical expenses resulting frm at-fault bating accidents when smene is injured upn getting int r ut f the insured watercraft. The bradest plicies may als include medical payments cverage fr water skiing injuries. Medical payments cverage may r may nt be necessary, depending n the scpe f the prpsed insured s health insurance cverage. UNINSURED BOATERS COVERAGE Uninsured baters cverage is available under a bat plicy as an ptin. It prvides payment up t a specified limit--generally $10,000 per accident--when the insured r a member f their family suffers bdily injury caused by an uninsured bater. If the uninsured bater als has insufficient assets t cmpensate the insured fr their lsses, the financial cnsequences culd be disastrus. With this pssibility in mind, it's prbably wise fr a cnsumer t purchase this cverage with a relatively high limit. 3

11 LIMITATIONS Bat plicies may limit usage f the insured vessel t a specified territry. The bradest plicies cver the vessel while being perated n any inland bdy f water (rivers, lakes, etc.) within the cntinental United States and Canada, and castal waters f the same areas, up t a certain limit. The mst restrictive plicies prvide cverage nly n a specified bdy f water and within a narrw perimeter arund that area. The cverage prvided by ther plicies falls smewhere between the fllwing examples: Cverage nly t inland lakes r t certain states; N cverage fr ffshre waters, such as the Gulf f Mexic. YACHT POLICIES A yacht plicy is very similar t a bat plicy, in that it prvides cverage fr physical damage t the vessel and fr persnal liability claims against the insured. Hwever, in a yacht insurance plicy, this cverage s are called "hull insurance" and "prperty and indemnity cverage." Yacht wners can als purchase several ptinal cverage s. HULL INSURANCE This cverage pays t repair r replace the vessel if it is damaged r destryed. Typical cvered perils include fire, lightning, hail, windstrm, hurricane, trnad, explsin, cllisin, capsizing, sinking, vandalism, and theft. Hwever, plicies vary frm ne insurer t anther. In additin t the yacht itself, the sails, furniture, utbard mtr, and machinery are als cvered. Dinghies and trailers may be cvered under a separate plicy endrsement. PROTECTION AND INDEMNITY COVERAGE This sectin prvides marine liability cverage in the event that a liability claim is filed against the insured fr bdily injury and prperty damage resulting frm an at-fault accident. This cverage may be subject t certain exclusins. OPTIONAL COVERAGE S Like bat insurance, yacht insurance plicies typically prvide ptinal cverage fr legal defense, medical payments and uninsured baters. Yacht wners can als buy a hurricane prtectin endrsement, which will pay t haul the yacht ut f the water if a hurricane is appraching and put it back in the water after the hurricane has passed. LIMITATIONS Mst yacht plicies include several limitatins, called "warranties." A navigatinal warranty limits the peratin f the insured vessel t a specified area. Depending n the plicy, the size f the cvered regin culd vary dramatically. Many yacht plicies als include a lay-up warranty, which requires that the yacht be taken ut f peratin fr certain perids during the year. Fr example, a yacht plicy fr a vessel harbred in New England might require that vessel be ut f cmmissin during the winter mnths. PERSONAL WATERCRAFT INSURANCE If an individual has a persnal watercraft, they might actually have a difficult time insuring it. Many insurers refuse t insure these craft, because they pse a much greater risk than ther types f watercraft. Accrding t sme statistics, 45 percent f all bating accidents invlve persnal watercraft. Hwever, certain insurance cmpanies nw specialize in insuring persnal watercraft because f their ppularity. COST The cst depends n a number f cnsideratins, including the age, size, type, and pwer f the vessel. Smaller bats are usually less expensive t insure than larger bats, and, in general, speedbats will be mre expensive t insure than sailbats. 4

12 Where and when the vessel will be used affect the cst f the insurance. It is mre expensive t insure a bat in castal waters than in inland lakes and rivers, especially in areas at risk fr hurricanes. Other factrs that influence price include the security f the lcatin where the vessel is nrmally kept, the liability limits and deductibles selected, the level f experience as a bater/sailr the insured might have, and whether the bat is used yearrund. Safety is f utmst imprtance t insurance cmpanies, s it might be fund that the insurer ffers a discunt when the bat/yacht plicy is renewed after a year with n claims. Taking an apprved bating safety curse can als earn a discunt n the premiums. Discunts are als available fr prtective devices such as depth finders, burglar alarms, and ship-t-shre radi systems. If the bat is insured with the same cmpany That issued the aut, life, r hmewners insurance; the insured may be eligible fr a multi-plicy discunt as well. BOAT SAFETY CONSIDERATIONS Whether the insured is a first time bat wner r an experienced veteran, knwledge f bat safety is a paramunt issue in helping t maintain the cst f insuring watercraft. There are many ways t make sure that bating is a safe experience while prtecting the envirnment and being cnsiderate f ther baters. Accidents and emergencies can be diminished with the help f the fllwing safety cnsideratins. Alchl and drugs dn't mix well with bat peratin. They reduce the ability t make quick decisins and t handle the craft in all situatins. A study in fur states shwed that 51% f thse killed in bating accidents had been drinking. Persnal fltatin devices (PFD) are required fr each persn n bard. Wearing a U.S. Cast Guard apprved PFD, with at least a 50 mph impact rating, can meet this requirement Keeping a sharp lkut fr ther vessels, swimmers and thers bjects. Help avid hazardus situatins. It is imprtant t knw where ther bats are befre making a turn r crssing a wake. Baters shuld nt exceed the maximum lad limit, and check fuel levels befre starting ut. They shuld practice the "One Third Rule" by using ne third f the fuel ging ut, ne third cming in and keeping a third in reserve. Baters shuld share their "Flat Plan" with a friend, s they knw where the bater is ging and when they plan t return. Baters shuld nt try t g ut alne and never perate the bat in the dark withut prper lighting. Baters shuld always fllw markers and signs, and stay clear f vegetatin. Vegetatin can damage the bat and lead t ersin t shrelines. Baters shuld take a bating safety curse t better learn the rules, regulatins and safe practices. Checking the weather frecast befre starting ut. Watching fr changes in waves, wind r cluds that signal the apprach f bad weather. All are helpful safety guides. Baters shuld be prepared fr cld weather. Cld water-cls the bdy 25 times faster than air f the same temperature. Fcus Pints "Sft fraud" is the exaggeratin f therwise legitimate claims. Hard fraud" is the deliberate attempt t stage lsses then make claim against the lss. Bat thefts cst the bating cmmunity between $85 and $125 millin each year. Nn-unifrmity in watercraft registratin dcumentatin cntributes t fraud and theft claims. 19 states d nt require a title t be presented t register a watercraft. 5

13 Bat wnership carries many f the same risks as autmbile and hme wnership. Many marinas and yacht clubs will nt allw un-insured bats t dck. Hmewners insurance usually includes limited cverage fr small watercraft. Hmewners plicies prvide $1,000 f cverage fr damage t a bat stred at the insureds hme. Jet skis are ften excluded frm hmewner s insurance cverage. Watercraft are typically divided int three categries. Bats include watercraft between 16' and 25' 11" in length. Yachts include watercraft which are 26' r lnger. Persnal watercraft includes jet skis, wave runners, and ther similar craft. Bat plicies are similar t autmbile insurance. The main types f cverage in bat plicies are physical damage and liability cverage. Bat plicies can include legal defense prtectin, medical payments cverage, and uninsured bater cverage. Physical damage cverage pays t repair r replace the bat. Cvered perils differ frm plicy t plicy. Bat plicies cver the bat, utbard mtrs, trailers, and persnal prperty kept abard. Liability cverage is the mst critical cmpnent f any watercraft insurance. Liability cverage prvides prtectin against legal claims if the insured is fund liable. Uninsured baters cverage is available under a bat plicy as an ptin. Yacht insurance is referred t as hull insurance. Yacht plicies prvide cverage t the bat and persnal liability claims against the insured. Hull insurance pays t repair r replace the vessel if it is damaged r destryed. Yacht plicies include limitatins called warranties. A navigatinal warranty limits the peratin f the insured vessel t a specified area. The cst t insure bats in cstal waters is greater than in inland lakes and rivers. CHAPTER 2: BASIC WATERCRAFT POLICY STIPULATIONS Watercraft can range in size as fllws: Rwbats Canes Outbard mtrbats Inbard mtrbats Dinghies Sailbats Speedbats 6

14 Husebats Yachts HULL AND TRAILER LOSS EXPOSURES Watercraft as well as their equipment, trailers and furnishings may be expsed t a wide variety f theft and physical damage lss. Examples f a few are: Tw speedbats cllide, A sailbat is verturned in heavy winds, A bat sinks in a severe strm, A sandbar strands a husebat, An utbard mtr falls int a lake, A bat trailer is stlen, An explsin seriusly damages a bat. HOMEOWNER'S POLICY - PHYSICAL DAMAGE COVERAGE Watercraft and trailers are cvered under Sectin One f a hmewner's plicy fr physical damage and theft. Hwever this cverage is very limited. The majr limitatins n cverage are as fllws: Direct lss t: Watercraft, Trailers, Furnishings, Equipment, Outbard mtrs, frm windstrm r hail is cvered ONLY if the prperty is inside a fully enclsed building. Theft f: Watercraft, Trailers, Furnishings, Equipment, Outbard mtrs, away frm the resident premises is specifically excluded. Watercraft and ther bating prperty are cvered nly fr a limited number f named perils. Cverage n: Watercraft, Trailers, Furnishings, Equipment, Furnishings,. is limited t a maximum f $1, PERSONAL AUTO POLICY - PERSONAL DAMAGE COVERAGE An autmbile plicy is nt designed nr des it cver any physical damage t bats. The bat trailer hwever can be insured fr physical damage lss under a persnal aut plicy. The trailer must be described fully in the declaratins f the aut plicy. LIABILITY LOSS EXPOSURES When a cnsumer wns r perates a watercraft they can be expsed t a wide variety f liability lss expsures such as: 7

15 A water-skier is injured because f excessive speed, Speedbat swamps anther bat causing it t turn, A bat runs int swimmers and seriusly injures them, A bat cllides with a dck causing prperty damage, Tw bats cllide injuring the ccupants, A child falls verbard and drwns and was nt prvided with a life preserver by the bat peratr. HOMEOWNER'S POLICY LIABILITY COVERAGE Sectin II f a hmewner's plicy prvides persnal liability insurance and it cvers certain watercraft lss expsures prviding the bat is under a specified size and length. Persnal liability prvides the insured with prtectin against bdily injury r prperty liability that arises ut f the use r peratin f certain wned watercraft. The liability prtectin can als apply n an excess basis fr certain cvered nn-wned watercraft. There is hwever several imprtant categries f watercraft liability that the hmewner's plicy excludes frm cverage. They are: Owned watercraft regardless f size with inbard r inbard/utbard mtr pwer. Rented watercraft with an inbard r inbard/utbard mtr pwer with mre than 50 hrsepwer. An wned r rented sailing vessel that is mre than 26 feet in length Watercraft pwered by ne r mre utbard mtrs with mre than 25 hrsepwer if the mtrs were wned by the insured at the inceptin f the plicy and nt declared r reprted. Hwever watercraft pwered by utbard mtrs with mre than 25 hrsepwer are cvered if the mtrs were acquired prir t the plicy perid and prviding the insured declared them at the time f plicy inceptin r declared them within frty-five days f acquisitin. The abve exclusins d nt apply when the craft is in strage. OUTBOARD MOTOR AND BOAT INSURANCE This type f insurance is designed fr thse wh wn mtrbats and fr thse wh have adequate persnal liability cverage under their hmewner's plicy r under a cmprehensive persnal liability plicy but desire brader physical damage insurance n their bat. Inland Marine Flater can prvide this prtectin. Althugh flaters are nt standard they d cntain sme cmmn features. The insured selects the prperty t be insured. The flater can be written t cver the fllwing: Hull, Mtr r Mtrs, Bat Equipment, Bat Accessries, Bat Carrier, Bat Trailer. Cvered prperty is written n an actual cash value basis and may cntain a deductible f: $ $ $ Or mre. COVERED PERILS The flater can be written n a named peril f risks f direct lss basis. Mst flaters currently are written n the risks f direct lss basis. The cverage des nt include the liability fr: Bdily injury, Lss f life, 8

16 Illness f individuals. It is assumed that the insured has prper liability insurance under a hmewner's r liability plicy t cver any third party bdily injury claims. The flater, hwever, may prvide cllisin damage liability insurance that prtects the insured frm a claim fr prperty damage frm the wner f anther bat if the insured's bat happens t cllide with anther bat while it is aflat. EXCLUSIONS Outbard mtr and bat insurance cntracts d have exclusins. Sme cmmn exclusins are: Business pursuits. N cverage will be affrded if the bat is used as a public cnveyance fr carrying passengers fr cmpensatin, N cverage will be prvided if the bat is rented t thers, Cverage is excluded fr race bats r speed cntests, Repair r service. Lss r damage frm refinishing, renvating, repair is nt cvered. The persn wh is repairing the bat wuld be respnsible fr any damage. General risks f direct lss exclusin Cverage will nt be prvided fr lss r damage frm Wear and tear, Gradual deteriratin, Vermin, Marine life, Rust, Crrsin, Inherent vices, Latent defect, Mechanical breakdwn, Freezing, Extremes f temperature. WATERCRAFT PACKAGE POLICIES Many insurance cmpanies have develped a special bat wner's plicy that cmbines the fllwing: Liability, Physical Damage, Medical Payments. Physical Damage Cverage Currently mst bat wner plicies are written n a direct and accidental lss basis. The insurance cmpany agrees t pay fr direct r accidental lss due t cvered prperty under the physical damage insuring agreement. All lsses are cvered except thse specifically excluded. The physical damage cvers: The Bat, Equipment, Accessries, Mtr, Trailer. If the bat cllides with anther bat, gets damage frm heavy winds, r is stlen, the lss is cvered. 9

17 LIABILITY COVERAGE. Liability insurance that cvers the insured fr bdily injury and prperty damage, liability frm a neglect wnership r peratin f the bat, is included in a bat wner's plicy. Shuld the insured accidentally damage anther bat r injure swimmers fr example, prtectin is prvided under the liability cverage. MEDICAL PAYMENTS COVERAGE This is similar t the medical payments fund in an autmbile insurance cntract. Medical payments will be made fr all medical expenses incurred within three years frm the date f a watercraft accident that causes bdily injury t a cvered persn. Under medical payments cverage, a cvered persn is defined as: The insured, A family member, Any persn while ccupying the cvered watercraft. Medical expenses will be paid fr reasnable charges fr the fllwing: Medical, Surgical, X-ray, Dental, Ambulance, Hspital, Prfessinal Nursing, Prsthetic Devices, Funeral Services. OTHER COVERAGE S The fllwing may als be fund in a bat wner's plicy: Cst f remving a wrecked vessel, Cst f remving a sunken vessel, Life salvage. EXCLUSIONS The fllwing are cmmnly excluded in a bat wner's plicy under physical damage cverage: Wear and Tear, Inherent Vice, Latent Defect, Mechanical Breakdwn, War, Nuclear Hazard, Damage Caused by Repair (except fire), Damage Caused by Restratin Prcess (except fire), Carrying Persns fr a Fee, Carrying Prperty fr a Fee, Renting Cvered Prperty, Racing Cvered Prperty (except sailbats), Speed testing Cvered Prperty (except sailbats), Infidelity f Persns t Whm Cvered Prperty is Entrusted, Prtable Electrnic Equipment, Phtgraphic Equipment, Water sprt Equipment, Fishing Gear, Cameras, Fuel, Prtable Radis, Fishing Equipment. The fllwing are cmmnly excluded frm a bat wner's plicy under medical expense cverage: Intentinal Injury, Intentinal Damage, 10

18 Renting the Watercraft t Others, Carrying Persns fr a Fee, Carrying Prperty fr a Fee, Using Watercraft in a Race (except sailbats), Using Watercraft in a Speed Test (except sailbats), Lss Cvered under Wrker's Cmpensatin, Lsses by a Nuclear Energy Liability Plicy, Cntractual Liability, Injury t an Emplyee if the Emplyee's Wrk invlves Operatin r Maintenance f the Watercraft. PERSONAL YACHT INSURANCE This type f plicy is fr larger bats such as inbard mtrbats and cabin cruisers. Persnal Yacht insurance prvides the fllwing cverage: Hull Insurance, Prtectin and Indemnity Insurance, Optinal Cverage, Warranties. HULL INSURANCE This prtectin refers t physical damage n the bat. This cverage als applies t: Sails, Tackle, Machinery, Furniture, The Bat. This insurance prvides "all-risks" prtectin. Fr example if the bat is damaged by: High winds, Heavy seas, Cllisin, Fld, Sinking because f an insured peril the lss is cvered. A deductible f varying amunts will apply t all physical damage and lsses. PROTECTION AND INDEMNITY INSURANCE This cverage prvides the bat wner with cverage fr bdily injury and prperty injury n an indemnity basis. If fr example the bat were t smash int a marina and injures several persns the lss t the dck as well as any bdily injury wuld be cvered under P&I. OPTIONAL COVERAGE S Yu may add several ptins t yur persnal yacht plicy, such as: Medical payments, Liability f the insured t maritime wrkers injured in the curse f emplyment, Bat trailer insurance, Land transprtatin insurance, Water-skiing clause. WARRANTIES Several warranties and prmises are prvided with yacht insurance. Shuld a warranty be vilated higher premiums may be required. The majr warranties n yacht insurance are as fllws: Seawrthiness Warranty The insured warrants that the vehicle is in seawrthy cnditin 11

19 Lay-up Warranty The insured warrants the vehicle will nt be in peratin during certain perids, such as winter mnths Navigatinal Limits The vessel will be used nly in territrial waters described in declaratins Private Pleasure Warranty The insured warrants the vessel will nt be hired r chartered UNINSURED BOATERS COVERAGE As is the case with autmbile insurance where yu can purchase uninsured mtrist prtectin, bat packages als include an ptin fr uninsured bat cverage. The cmpany agrees t pay damages that a cvered persn is legally entitled t recver frm an insured bat wner r peratr due t bdily injury sustained by a cvered persn in a bating accident. The uninsured bater s cverage has several exclusins. Bdily injury frm the fllwing are excluded: While ccupying r struck by any watercraft wned by the insured r family member that is nt insured under the plicy. If the bdily injury claim is settled withut the insurance cmpany's cnsent. While perating a cvered watercraft which is carrying persns r prperty fr a fee. While ccupying a cvered watercraft being rented t thers. Using a watercraft withut a reasnable belief that the persn is entitled t d s. Occupying a watercraft withut the reasnable belief that the persn is entitled t d s. In the event there shuld be a disagreement as t whether a cvered persn is legally entitled t recver damages frm the uninsured bat wner r peratr, r n the amunt f damages, the cverage has an arbitratin prvisin which states: Each party selects an arbitratr. The tw arbitratrs then select a third arbitratr. They have thirty days t agree. If they g beynd thirty days a judge in a curt f law appints the arbitratr. Fcus Pints Cverage f theft and damage t watercraft and trailers is under Sectin One f a hmewners plicy. An autmbile plicy is nt designed nr des it cver any physical damage t bats. Bat trailers can be insured fr physical damage lss under a persnal aut plicy. Sectin II f a hmewner's plicy prvides persnal liability cverage and cvers certain watercraft lss expsures. Persnal liability cvers insured against bdily injury r prperty liability. Insurance cmpanies have develped bat wner's plicies cmbining Liability, and Medical Payments. Bat wner plicies are written n a direct and accidental lss basis. Medical payments cverage pays fr all medical expenses incurred within three years f the injury. Hull insurance prtects physical damage n the bat. Hull insurance prvides "all-risks" prtectin. Prtectin and indemnity insurance cvers bat wners fr bdily injury and prperty injury n an indemnity basis. Uninsured baters insurance is similar t uninsured mtrist insurance. 12

20 CHAPTER 4: SPECIALTY COVERAGE MARKETS Insurance n yachts and pleasure bats, persnal watercraft, husebats and marinas is a special class f business nt usually written by retail agents in their standard cmpanies. Fr this reasn, a number f specialty managing general agents have been established t handle yacht and pleasure bats as a specialty line. Mst underwriters are baters themselves and have had years f experience in handling yacht and pleasure bat accunts. Many f these ffices prvide facilities fr yachts nly and bats r persnal watercraft. Others are exclusive managers f insurance fr marinas and water sprts rental. Sme facilities handle all classes, while ther managing general agents, which ffer a general line f prperty and casualty insurance prducts, include yachts and pleasure craft in their fferings t agents and brkers. The fllwing is a descriptin f the classes f business fr persnal marine cverage s, as well as a list f markets that ffer cverage s fr yachts, pleasure bats, persnal watercraft and marinas. ANTIQUE AND CLASSIC BOATS Antique and classic bats are defined as vessels ther than the rdinary manufactured pleasure bat. Standard insurers writing pleasure bats and yachts are nt interested in mst wden-hull bats, custm-builds r thse f a highly unusual nature. Antique and classic bats are thse built 25 r mre years ag. Mst wden bats and sme lder classic fiberglass bats wuld qualify fr this categry. The bat must be seawrthy t qualify fr cverage n an all-risk, full marine basis. Cverage is written fr agreed value n the hull. The plicy als includes liability cverage, uninsured baters, medical payments, persnal effects and trailers. Business is ften prduced n an assciatin basis--fr example, all wners f Chris Craft antique bats, etc. HIGH PERFORMANCE BOATS This is a type f pleasure bat designed t prvide high perfrmance fr cruising, water-skiing, etc. Insurance is a brad frm marine plicy cvering persnal and business-wned vessels capable f speeds up t 100 miles per hur. Hull and liability cverage, including medical payments, persnal effects, and uninsured baters, is usually sld as part f a package. Limits generally extend up t $500,000 fr hulls and $1 millin fr liability. Plicies are issued at agreed value with named peratr warranty. Extended land transit cverage, transit and strage nly, and machinery damage cverage are available as ptins. Extended navigatin areas are available. Single- r multihulls are eligible. HOUSEBOATS Insurance underwriters cnsider husebats t be in the same categry as yachts and pleasure craft. Rates, insuring cnditins and cverage s are similar. Hull and liability cverage s are written n the yacht frm. The main difference between yachts and husebats is that because f the cnstructin f a husebat, the craft is nt as easily navigated, is less seawrthy in rugh water, and is mre unwieldy than the sleeker yacht. An inbard/utbard drive with single r twin engines up t 400 h.p usually pwer husebats. Values, including luxury fittings, may range up t $50,000 r mre. The plicy is underwritten n the: Basis f the experience f the wner r pilt, Use f the bat, Length f time in the water, The rate area in which the bat is navigated. Plicy includes hull, bat equipment, persnal effects, liability, medical payments, and uninsured baters cverage. Plicy is subject t a minimum deductible. PERSONAL WATERCRAFT (JET SKIS) This class f watercraft encmpasses a wide range f single engine inbard pwered vessels n greater than 16 feet in length and using a water-jet pump as the primary surce f prpulsin. Operatrs/passengers may stand up, sit upn (mtrcycle style), r sit in the unit depending n the manufacturer. included in this class are Jet Ski, Wave runner, Tiger shark, Wet Bike and Sea Dg "cycle" style mdels, as well as Jazz and Rage "mini bats." Expsures include high perfrmance and handling characteristics cupled with minimum peratr and passenger prtectin. Water-skiing and ther twing activities have becme additinal expsures as pwer f these units increase. 13

21 Cverage includes hull, liability and medical payments. Units are valued n an actual cash value basis. Trailers and waterskiing liability can be added. Liability limits are available generally t $300,000. MARINAS These businesses are imprtant t yacht and pleasure bat wners. Marinas prvide mring facilities, repair, alteratin, maintenance, strage, fueling, and many ther services fr the pleasure bat wner. Cverage under a marina package plicy includes prperty, general liability, and marina peratr s legal liability, prtectin and indemnity insurance, bat dealers inventry, wrkbat hull, and piers, wharves and dcks cverage. The marina peratr s legal liability plicy cvers the legal liability f the marina peratr fr lss f r damage t private pleasure bats while in the peratr's care, custdy r cntrl. The plicy clses the gap left by the "care, custdy and cntrl" exclusin f the general liability plicy. Premium is based n grss receipts. Water sprts rental insurance is available fr marinas that rent ut persnal watercraft, pleasure bats, kayaks, water skis and wind surfers. Insuring peratins such as parasailing and chartered bats can be arranged. WATER SPORT RENTALS Rental f all types f watercraft frm persnal watercraft t husebats has becme an increasingly ppular alternative t wnership f a bat. Cverage is affrded t the wner f the rented watercraft, nt the renter. Liability, hull damage and water sprts liability cverage s are available. Underwriters require use f a written rental agreement cntaining apprpriate "hld harmless" language. Hull cverage is generally written n an actual cash value basis. Premium is based n grss receipts. YACHTS AND PLEASURE BOATS Package plicies are available fr mst types f pwer r sailing vessels. The plicy is usually written n an all-risk basis cvering bth physical damage (hull) and liability risks f the wner. Optinal cverage is available fr passenger liability, equipment, trailers and water-skiing liability. Fr small bats and yachts up t 60 feet, hull cverage may be arranged with limits up t $1 millin. Fr larger "mega" yachts up t 200 feet, values may extend t $20 millin. Liability limits generally are between $300,000 and $2 millin, but sme large yachts may be written fr as high as $50 millin. Bat trailers, persnal effects, medical payments and uninsured baters insurance are imprtant ptins ffered. Premium is based n size f bat, hrsepwer, navigatinal range, and experience f peratr. Bats lder than 25 years are generally written under separate antique and classic bat prgrams. BASS BOAT INSURANCE Lw Cst, Brad Cverage Bat Insurance Especially fr Bass Bat Owners! Mst anglers with bass bats prbably have invested a lt f mney in their bat, t utfit it with the latest technlgy, keep the engine tuned and yur fishing gear in tp shape. What if smething happens while they're ut there, like hitting a submerged lg r their best rd is stlen right ff their bat? A special bat insurance prgram just fr bass bats is available that in additin t brad basic cverage includes cverage s designed t meet the unique needs f the fishermen. Prgram Highlights Bradest cverage-fr the bat, mtr and trailer, as well as liability, medical and uninsured bater cverage (subject t plicy exclusins). Agreed hull value plicy - in the event f a ttal lss. Brad cruising area - the U.S., Canada, Mexican castal and inland waters withut having t call fr a cruising extensin. Autmatic turnament cverage - fr participatin in fficially sanctined bass fishing turnaments. MEXICAN LIABILITY COVERAGE Bating in Mexic requires three types f insurance: 14

22 Hull Cverage, Liability Cverage - issued by a Mexican Insurance prvider, Autmbile Liability Cverage - issued by a Mexican Insurance prvider tailring a bat n land. In the event f an aut r bating accident, Mexican law requires prf f financial respnsibility, which is typically dne by shwing authrities an insurance plicy. Withut prf f cverage, the bat and vehicle can be impunded until the individual prves that they are nt at fault. The Mexican gvernment will nly recgnize a Mexican insurer. Fcus Pints Antique and classic bats are defined as vessels are built 25 r mre years ag. Bats must be seawrthy t qualify fr cverage n an all-risk, full marine basis. Cverage is written fr agreed value n the hull. Plicies cver liability, uninsured baters, medical payments, persnal effects and trailers. Husebats are categrized as yachts and pleasure craft. Persnal Watercraft are n greater than 16 ft. lng using a water-jet pump fr prpulsin. Water sprt rentals Cverage is affrded t the wner f the watercraft, nt the renter. Package plicies are available fr mst types f pwer r sailing vessels. Plicies are usually written n an all-risk basis cvering physical damage and liability risks. Lw Cst, Brad Cverage Bat Insurance Especially fr Bass Bat Owners! A special bat insurance prgram just fr bass bats is available. Bating in Mexic requires three types f insurance. 15