If you are like many homeowners, you enjoy recreational activities surrounding water and boats, especially when you live close to a beach or lake such as in Miami, Austin, San Francisco, Houston, and Portland – to name a few. Because these activities are so commonly enjoyed by many people, the home insurance policy has special sections to address coverage for watercraft. What many homeowners may not realize is that their home insurance policies actually provide a degree of coverage for certain types of boats. Unlike automobile exposure, which is completely excluded from the policy, watercraft coverage can be found in the home insurance policy. Understanding the benefits of your home insurance policy may save you some money on insurance if it’s not necessary to purchase another policy just for your boat.
Within the personal liability coverage on your home insurance policy, bodily injury or property damage arising out of the use of a watercraft is covered except when it comes to larger and more powerful boats. The sizes may vary from policy to policy, but it’s common for powerboats under 50 horsepower or sailboats less than 25 feet in length to be covered for liability purposes. The coverage includes watercraft that you either own or rent. This is a significant coverage benefit that many homeowners may not be aware of on their policy.
Within the definition of watercraft, there are some types excluded for reasons other than the size of the motor or length of sailboat. For example, watercraft that are designated as airboats, air cushions, or similar types of craft are excluded from any liability coverage. The policy also excludes a broad category of personal watercraft using water jet pumps powered by internal combustion engines. This is intended to exclude the use of jet skis and other similar equipment. If you intend on using watercraft that is excluded from your policy, be sure to arrange for proper liability insurance.
Another aspect of the home insurance policy is coverage for physical damage to the watercraft. In this regard, the policy is less generous. Regardless of size or power, the standard home insurance policy provides only $1,000 of coverage under the personal property section. As you can see, this is very limited in scope in contrast to the liability coverage, which provides for the full limits of the policy. Additionally, the property coverage is subject to some specific excluded perils. While windstorm and hail are commonly covered perils for your home, they are excluded as perils for your boat except when the boat is in a fully enclosed building.
The coverage on the home insurance policy can be very helpful if you are simply renting small watercraft for occasional use. This eliminates the need to buy a separate policy for short seasons when boating is possible in your area. However, if you are a serious boater, you will find the coverage to be somewhat lacking. In that case, you will need to find a true marine policy to cover the boat and your liability arising out of its use.