Rental Watercraft Exposures

Since summer is here in most parts of the country, now is a good time to look at exposures that arise during this time of year. One such exposure involves marine activities, specifically exposures and coverages (or lack thereof) when renting watercraft.

In some cases, people using watercrafts own them and rely on a boat owners or yacht policy. But, in many other instances, they rent them or are just borrowing them. There can be some serious exposures when your clients rent sailboats, houseboats, Jet Skis or other watercraft and rely only on their HO policies. That’s particularly true when the renter does not have a lot of experience using marine vehicles.

In one case, an insured vacationing in the Bahamas rented a boat valued at more than $50,000.Through no fault of the insured, the boat was destroyed and he learned that the rental agreement made him responsible. The marina offered no insurance coverage of any kind. In another case, an insured rented a 21-foot pontoon boat during a weekend on a lake. The marina provided hull coverage on the boat. Think either of these parties have a potential problem?

For more information about what is and isn’t covered under the ISO homeowners policy, along with some risk management strategies, click here.


Roomers and Boarders

In these tough economic times, some homeowners struggling to meet mortgage payments are taking in boarders, usually without their agent’s knowledge. Losses are sure to follow in these situations. These tenants can cause damage to your insured’s property or vice versa. So what are the coverage implications?

The Big “I” Virtual University recently received the following question: “One of my clients plans on renting two bedrooms in his house to college students. He is a ‘grandfatherly type’ gentleman who lost his wife a year ago and probably would enjoy having company in his home. And as a retired college professor, he would relish being around college students again. How will this impact his property and liability coverages? Also, would the college students have any coverages under his policy?”

VU faculty member and national insurance educator Mike Edwards explores eight coverage issues related to these types of exposures. For his complete analysis, click here.


Motor Homes, Moving Vans and Trailers

Now is the time of year when people are more likely to take an extended vacation or move from one home to another. When doing so, they may rent a motor home, moving van or trailer. If so, you can expect questions like this: “My personal auto policy client is going to rent a motor home for an upcoming vacation. In trying to find out if the PAP covers the motor home, I’ve called the company three times and gotten three different answers. Does this question sound familiar? How have you responded to such questions from your insureds?”

While it sounds simple on the surface, this can be a very complex question, with the answer depending on what type of vehicle and what ISO or company policy is in place. Renting these types of vehicles is different from renting a private passenger automobile in both exposure and coverage. Big “I” Virtual University faculty member and personal lines guru David Thompson has examined the issues surrounding this question and offers some answers as to coverage for liability, medical payments, uninsured motorists, PIP and physical damage exposures. For his complete analysis, click here.

Bill Wilson (bill.wilson@iiaba.net) is Big “I” director of the Virtual University, an online learning center for agents and brokers.