When summer arrives many clients will head to the waterways in search of fun, only to discover an insurance problem—limited coverage for a Jet Ski under the homeowners policy. Face it, the last thing on someone's mind when they are about to hop in a watercraft is, "How will my homeowners policy protect me?" Of specific concern is a Jet Ski or similar "water toy" type watercraft. Since a Jet Ski is an inboard watercraft and since so many folks will purchase, rent, or borrow them we need to see what coverage is provided by the ISO homeowners policy. Unfortunately the answer varies between "none" and "not much." 

Owned Jet Ski

Section I of the homeowners policy provides $1,500 for watercraft in the Homeowners 2000 program. The typical HO-3 policy provides coverage for 16 named perils. The HO-5 policy (new to Homeowners 2000) or the HO-15 endorsement in the Homeowners 1991 program converts the named peril coverage to an "open peril" basis. Specific limitations are no theft away from the residence premises and no coverage for windstorm damage unless the watercraft is inside a fully enclosed structure. With the typical Jet Ski costing in excess of $5,000 the coverage gap is obvious.

Section II of the policy provides no coverage at all for an owned Jet Ski. Period. This means that as soon as the dealer gives the key for the Jet Ski to the customer, there is no coverage for liability or medical payments under the homeowners policy. Excluded is watercraft liability for an owned inboard watercraft.

Obviously the consumer who purchases a Jet Ski needs to consult with their insurance agent before the purchase is made.

Boat and jet ski insurance in Florida.

Rented Jet Ski

Section I of the homeowners policy responds for a rented Jet Ski as if it were owned by the insured and as outlined above in the "Owned Jet Ski" section. The homeowner policy covers "...personal property owned or used by an insured while it is anywhere in the world." 

Section II of the homeowners policy is most likely not going to respond for claims arising out of the client who rents a Jet Ski. For inboard or inboard/outdrive watercraft (such as the Jet Ski) Section II coverage is provided only for such watercraft of 50 horsepower and under. Consultation with a Jet Ski manufacturer revealed that the smallest Jet Ski they manufacture is about 70 horsepower. Considering the number of folks who rent a Jet Ski this is perhaps one of the most significant gaps found in a homeowners policy. Let's say it again: "The client who rents a Jet Ski does not have any liability or medical payments coverage under his/her homeowners policy." There is no ISO endorsement to remedy this gap in coverage since the watercraft liability endorsement (HO 24 75) provides coverage only for a watercraft shown on the schedule.

Borrowed Jet Ski

Section I of the homeowners policy responds for a borrowed Jet Ski as if it were owned by the insured and as outlined above in both the "Owned Jet Ski" and "Rented Jet Ski" sections. The homeowner policy covers "…personal property owned or used by an insured while it is anywhere in the world."

Section II of the homeowners policy does provide liability and medical payments coverage for the insured as well as family members. In fact, the insured and family members have Section II coverage for any borrowed watercraft, even a U.S. Navy submarine!

Personal Umbrella Coverage

Since each insurance company tends to write their own personal umbrella policy there isn't a standard answer to the question of, "Does my umbrella cover me on a Jet Ski?" Some forms may be "follow-form" meaning they respond only if an underlying policy pays first. Other umbrella forms may provide liability coverage for any Jet Ski not owned by an insured, meaning a rented Jet Ski would be covered. The only way to know for sure is to read the form.

Conclusion

With Jet Ski type watercraft making up about 10% of the watercraft population but accounting for nearly 55% of watercraft injuries you and your client need to be concerned about this coverage gap. The homeowners policy provides, at best, limited coverage for a Jet Ski. As best as is possible, agents should make their clients aware of what coverage is provided, and what's not provided under the homeowners policy.

Make sure to contact your local Armstrong Insurance agent for a quote on auto, home or commercial insurance policies anywhere in Florida.