Summer is the time for fun. Book a tee time, put the boat in the water, head to the lake, the beach or the mountains. It is the time of year to play. Golfing, boating, fishing, water skiing, swimming, hiking, trail riding — you name it, we do it.
In order to play, we have to have the right toys. And, we have those toys — swimming pools, boats, golf carts, all-terrain vehicles (ATVs), motorcycles, motor homes, and trampolines. You name it, we've got it. And if we don't own one, we'll rent one.
But, are the toys you own and rent properly insured under personal insurance policies? In some cases the answer is yes, but, all too often the answer is no.
Let's spend a few minutes together and discuss how the standard homeowners and personal auto policies address coverage for these toys of ours. Let me emphasize that this discussion is based on standard insurance forms. Obviously these provisions are not the same in all insurers' homeowners' and personal auto policies.
When we play golf, most of us rent a golf cart. Any liability arising out of the use of that rented golf cart is covered under both the standard Homeowners' and Personal Auto policies. If you damage a rented golf cart, there is no coverage under the Property Section of the homeowners' policy or the Physical Damage Section of the personal auto policy. However, the homeowners' policy will pay up to $1,000 for the damage to the golf cart under Section II - Liability Additional Coverage for Damage to Property of Others.
What if you own a golf cart? The homeowners' policy provides liability coverage when it is used on the golf course. What about driving the golf cart from your house to the golf course? The homeowners' policy will cover the liability exposure only if you are within a private community where golf carts can legally travel, which is subject to a property owners association and contains your residence. Otherwise, there is no liability coverage under the homeowners' policy.
There is no coverage for damage an owned golf cart under either the homeowners or the personal auto policy.
If you own a golf cart, the Miscellaneous Type Vehicle endorsement (PP 03 23) can be used to add the golf cart to your personal auto policy. However, will your insurer add this endorsement? If you own a golf cart and are using it to drive to and from the golf course and you want physical damage coverage, your best bet is a Recreational Vehicle policy.
All-terrain vehicles (ATVs)
If owned, there is absolutely no coverage under either the standard Homeowners' or the standard Personal Auto policy. The Miscellaneous Type Vehicle endorsement (PP 03 23) can be used to add the ATV to your personal auto policy. You can probably forget that option. Bite the bullet and purchase a Recreational Vehicle policy.
If you rent or borrow an ATV, the homeowners' will cover your liability arising out of your use of the ATV and, if the ATV is not subject to registration, pay up to $1,000 for the damage to the ATV under Section II - Liability Additional Coverage for Damage to Property of Others.
If owned, both the personal auto policy and the homeowners' policy exclude coverage. Again, the Miscellaneous Type Vehicle endorsement (PP 03 23) can be used to add the motorcycle to your personal auto policy. As with the ATV, you can probably forget that option. Here we go again — purchase a Recreational Vehicle policy.
If you rent or borrow a motorcycle, the personal auto policy provides no coverage, and the homeowners' policy excludes if subject to registration. Hopefully the agency that rented you the motorcycle offers coverage or your friend who loaned you the motorcycle has coverage. Otherwise, how does it feel to ride around with no insurance?
If the motor home is owned, many insurers will add to the personal auto policy and insure the same as any other covered auto.
If the motor home is rented or borrowed, the personal auto policy provides liability coverage, but no physical damage. If you rent from an agency, purchase the physical damage waiver coverage from the agency, if offered. What if you borrow or rent the motor home from a friend? Hopefully, that friend has the motor home insured. But, if the motor home is insured under a Motor Home policy, it may exclude coverage if rented to others. If you rent a motor home, just be careful, and ask the right questions.
If you own a boat, purchase a watercraft policy. Oh I know that the homeowners' policy will pay up to $1,500 for damage to the boat if caused by a covered peril, but sinking and banging into the dock are typically not covered perils under the personal property coverage. And I also know that the homeowners' policy will provide liability coverage for certain smaller boats — outboard motors if 25 horsepower or less and sailboats under 26 feet in length. But why risk it?
Let's go to the beach. Let's go to the lake. What are we going to rent? A personal watercraft — better known as a Sea-Doo or a Waverunner. Don't call them a "jet-ski." They're big, powerful, fun, and you probably have no liability coverage under the homeowners' policy.
The homeowners' policy excludes any rented watercraft over 50 horsepower if powered by an inboard or inboard-outboard motor, including those that power a water jet pump. It may be covered under the Personal Umbrella. But, it may not be. As with the rented motorcycle, how does it feel to ride around with no insurance?
If you borrow the same Sea-Doo, Waverunner, or inboard-outboard boat, you have liability coverage under the homeowners' policy.
What if you rent or borrow a boat powered by an outboard motor? Good news! You have liability coverage under the homeowners' policy, regardless of motor size.
If you rent a sailboat, the homeowners' policy covers your liability arising out of the use of that sailboat if it is less than 26 feet in length. If the sailboat is borrowed, you have liability coverage under the homeowners' policy regardless of size.
Finally, if you damage the rented or borrowed boat, you have that same $1,500 coverage that you have for an owned watercraft. Isn't that exciting?
A risk management suggestion: When you go to the beach or the lake and want to rent a boat, rent a small boat powered by an outboard motor rather than a Sea-Doo or Waverunner. Not as much fun, but you'll have your homeowners' liability coverage. But do you really think you'll rent the small boat or the Sea-Doo?
Backyard toys (swimming pools, trampolines, etc.)
You can take all the precautions you want: Put a fence around the pool, warn the kids that no other children are permitted to jump on the trampoline. Forget it! Most backyard toys are "attractive nuisances." They attract children. Pure and simple!
Are you covered for liability if something happens? Sure we are, under our homeowners' policies. The problem is underwriting restrictions and limits. If we have these types of backyard toys, we must have a Personal Umbrella, and we don’t need to stop at $1 million!
Remember, if we're not properly insured for our toys, our "fun in the sun" could prove to be very costly.
Contributed by Dave Jones, Agent, West Chester Office. Contact Dave at 610-350-8192 for any questions you might have.