The U.S. property/casualty industry’s first standardized program for insuring small, privately owned watercraft is undergoing a comprehensive revision.
Wheaton, Ill.-based the American Association of Insurance Services (AAIS) recently announced it is initiating a countrywide filing of revised policy forms, manual rules, and rating information for its Boatowners Program.
AAIS is a national advisory organization that develops policy forms and rating information used by more than 600 property/casualty companies throughout the U.S. This is the third comprehensive revision of the AAIS Boatowners Program since it was introduced in 1993.
The AAIS Boatowners Program provides a package policy with a simplified rating plan that can be used by to cross-sell boat insurance to personal lines accounts or as the basis of a specialized marine insurance program.
An AAIS Boatowners policy can be written to insure property only, liability only, including uninsured boater coverage, or property and liability. Coverage can be provided through a stand-alone policy or as an endorsement to a personal lines policy.
Property coverage under the Boatowners base form is provided on an open perils basis for eligible watercraft identified on the declarations, plus boating equipment and newly acquired watercraft, the last up to a built-in sublimit for 30 days.
Property coverage is subject to standard exclusions (war, nuclear hazard, etc.) plus additional exclusions applicable to marine insurance. The latter include exclusions for loss due to marine life, marring/bubbling/delamination (considered to be matters of maintenance), and business use, except for the entertainment of clients.
Liability coverage extends to use of all declared watercraft, motors, and trailers, plus non-owned boats except for those rented or regularly available to the insured.
Any boatowners policy that includes liability coverage automatically includes coverage for removal of a wrecked boat up to 25 percent of the liability limit for bodily injury and property damage. Such a policy would also automatically provide uninsured boater coverage up to a base limit established in the manual; higher uninsured boater limits are available.
Personal watercraft, such as “Jet Skis,” are covered under the program if identified on the declarations, or if they are acquired during the policy term; liability coverage for use of them can be effectively excluded by endorsement. (The endorsement modifies the definition of “boat” so it does not include personal watercraft.) Coverage for personal watercraft is limited to within 10 miles of the U.S. coast; coverage for other insured watercraft extends to 100 miles.
Several endorsements are provided, among them:
· An endorsement for providing coverage for personal effects;
· An additional insured endorsement providing coverage for vicarious liability of marinas and government agencies;
· An optional endorsement establishing a separate deductible for loss arising from named storms; and
· An optional endorsement implementing an agreed value settlement provision in place of the actual cash value loss settlement built into the policy.
AAIS has refined the rating procedure for the Boatowners Program, but it continues to have a relatively simple procedure that standard personal lines underwriters can use with readily available information.
The rating territories, which continue to cover all U.S. inland and coastal waters, have been subdivided and increased in number from five to 11. This refinement reflects, among other things, disaster exposure to boats made evident by Hurricane Katrina and other coastal catastrophes.
The revised rating procedure also includes a new premium credit for experienced operators and a surcharge for multiple owners, in addition to other refinements.
“This program provides a standardized package policy with a simple rating plan for insuring the most common types of family boats,” says Pamela Nykaza, AAIS senior product development specialist and the principal developer of the latest AAIS Boatowners revision.
“Our principal goal is to provide a complete, cost-effective, and relatively simple product that lets personal lines carries offer boat insurance to their most desirable accounts,” she says.
For more information on the AAIS Boatowners Program, go to www.AAISonline.com.
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