There has been a lot of press in recent news about what and who is covered under Minnesota watercraft insurance policies. Farmers Union Insurance Agents conduct business with multiple companies, and each company has their own policy coverages and exclusions. It is very important for you to read through your insurance policy thoroughly to understand what coverage the policy provides you and your family members, especially when it comes to Medical Payments and Liability to Others. Talk to your local Farmers Union Insurance Agent and they will be happy to answer any questions you may have.
The insurance approach for covering boats and boating property is quite like what is used to protect cars and homes. Essentially insurance is offered on a package basis, meaning that there is coverage for physical property as well as protection against the legal and financial consequences of injuring others or damaging property that belongs to others.
Typically, a watercraft policy covers:
- Boats – Refers to property designed to travel on water and includes sails, its permanent equipment, spars and fittings.
- Boating Equipment – Includes a wide variety of property that is used in conjunction with boats and it includes accessories. Items considered as equipment are property used for communication (radios), navigation, sonar, radar, outboard motors, dinghies, skis and sports equipment (recreational flotation devices) that are towed by boats and similar property. As a rule of thumb, the more related an item is to the ownership and use of a boat, the greater the justification to classify it as boating equipment.
- Boat Trailers – Trailers used (and designed) for transporting boats (as defined by the policy).
This property must be owned by the person who is named as the policyholder. There are limited instances when such property that is temporarily in the policyholder’s possession also qualifies for coverage.
Items and situations that aren’t covered include boating property that is used in a business activity, losses that involve races or competitions (an exception is made for sailboats) and boats that are used, full-time, as homes.
Besides protecting boating property, a watercraft insurance policy also responds to claims or lawsuits caused when another person is injured, and/or when another person’s property is damaged or destroyed. An example would be a collision where the owner of a large speedboat collides with a person on a jet ski, seriously injuring the rider and demolishing the jet ski. The policy would handle both portions of such a loss. The liability portion would also provide a legal defense against lawsuits.
Another important coverage under the liability section is medical payments. This provides reimbursement for, typically, emergency or immediate medical treatment expense. Consider a person who slips on a boat deck and needs transportation to an emergency room for treatment of a broken bone or concussion. Such costs would qualify under medical payments.
As is the case with property coverage, there are liability situations that are NOT covered by a boatowners policy, including losses that involve business activity, transmission of communicable disease, unauthorized operation of boating property, intentional acts, and criminal activity.
Boating property is a substantial investment and boatowners coverage is an efficient, affordable way to guard against accidental losses.