Pam Nykaza, senior product development specialist, inland marine
"Many standard lines companies are offering watercraft coverage to complement their auto, homeowners, and personal umbrella programs.
"One reason for this is that the demographics of the watercraft market are very attractive.
"People who own boats or yachts tend to be affluent and are typically well-educated. By offering watercraft coverage an insurer can help such clients protect their investment in the craft as well as any exposure to their personal assets in the event of a liability claim.
"If your company can't provide a product to meet those needs, it's likely that the customer will shop elsewhere for watercraft coverage, and take their other lines of insurance with them.
"Regardless of economic conditions, the market for watercraft coverage continues to grow as states require owners of watercraft to carry watercraft insurance with minimum liability limits.
"At AAIS, our principal goal is to provide comprehensive, cost-effective, and relatively simple watercraft products that carriers can use as an accommodation line for premium accounts, or to compete with specialty marine insurance writers."
Boatowners and Yacht Programs
Insuring boats and yachts is one of the few ways personal lines insurers can grow in an intensely competitive market. If your company is hesitant to "plunge in," consider two things:
- The money you can make in a line with more favorable combined ratios than in auto and homeowners; and
- The money you can lose if you do not have a boat or yacht product for high-value personal lines customers who end up taking their business elsewhere.
Product development and maintenance will not be a problem, as AAIS maintains two programs of forms, manual rules, and rating information for insuring watercraft:
- The Boatowners Program, filed countrywide on behalf of program affiliates.
This program is designed to cover watercraft that are no more than 30 feet in length and not greater than $75,000 in value. Personal watercraft, such as "Jet Skis®," are covered under the Boatowners Program if identified on the declarations or acquired during the policy term; liability coverage for use of personal watercraft can be excluded by endorsement.
- The Yacht Program, available on a nonfiled basis (company filing action may be required in some states).
The Yacht Program is designed to insure watercraft at least 26 feet long and $50,000 in value.
Under each of these programs--
- Coverage can be written on a stand-alone basis or as an endorsement to another personal lines policy.
- Coverage is available for property only, liability only, or for property and liability.
- Uninsured boater coverage is provided under policies with liability coverage.
- The rating information includes loss costs and/or factors for territory, size of boat, operator experience, and other variables.
For insurers, a key benefit to using these programs is in the consistency of the forms, manual rules and loss cost rating information. This is especially beneficial to companies writing watercraft as an accommodation for their personal lines accounts.
Insurance companies seeking more information on AAIS products and services can contact Rick Maka, director of marketing and strategic alliances, at our contact form , or by calling 800-564-AAIS, ext. 222.