Does My Homeowner's Insurance Cover My Boat?

January 9, 2020

A home policy is not designed for a boat of any size or value.

A homeowners policy may provide minimal coverage for a boat. However, a home policy is not designed, nor is it a good source of coverage for a boat of any size or value.

Though this answer provides a homeowners policy example, it is essential to know that policies can and do differ widely in coverage, limitations, and exclusions.

Let’s also establish that boatowners have two primary exposures to loss:

Physical damage to the boat itself
Liability for injury to others.

A plain vanilla ISO HO-3 homeowners policy references both physical damage and liability coverage for “watercraft”. However, a home policy significantly limits coverage for losses to boats.

PHYSICAL DAMAGE COVERAGE:

A standard ISO Homeowner policy provides up to $1,500 coverage for an unendorsed “watercraft”. The types of losses covered include:

Fire/Lightning
Windstorm & Hail (only while inside a fully enclosed building)
Explosion
Riot Civil Commotion
Vehicles
Smoke
Vandalism
Theft - However, the peril of “theft” is not included for losses that occur off the residence premises.

As you can see, the types of losses covered by a homeowners policy for a boat are limited in several ways. It is important to note that losses common to watercraft such as stranding, sinking, collision with another vessel or object are not a covered type of damage. In addition, $1,500 is not a significant limit.

LIABILITY COVERAGE:

Liability losses are a significant exposure for boat owners. Injury (or even death) of passengers and others should be carefully considered for any boat owner.

The snippet from a standard ISO HO-3 Homeowners policy shows some of the many limitations and exclusions pertaining to watercraft.
No liability coverage for sailboats over 26 feet
No liability coverage for owned Inboard/Outdrive motorboats over 50 horsepower
No liability coverage for owned Outboard motorboats over 25 horsepower

The bottom line?

An unendorsed homeowners policy is not the place to insure your boat.

In contrast, a boatowners policy is specifically designed to provide the unique physical damage and liability coverage a watercraft requires.

Watercraft policies are inexpensive and extend coverage for the many gaps and limitations which a homeowner policy purposely includes.

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