Understand Your Insurance Risk
Are You Properly Insured for Your Summer Fun? 

The temperature is rising and the sun is shining, but before you put the boat on the lake or get the ATVs out of storage, the National Association of Insurance Commissioners (NAIC) urges you to review your insurance to make sure you are properly protected. Use these tips to review your coverage to make sure you and your family are insured for the increased risks that come with outdoor activities.


A boat insurance policy provides liability coverage if someone is injured on your boat as well as bodily injury inflicted on others and property damage to your boat. These policies also may be suspended during the months your boat is not in use.

There are three types of boat insurance policies:

  • Actual cash value (ACV) or market value: Your insurer will reimburse you for the current value of the boat if you experience a total loss.
  • Agreed amount value: You and your insurer have agreed upon a value of your boat at the time you purchase the policy; this is the amount you will be paid if you experience a total loss.
  • Replacement cost coverage: In the event of a total loss, your insurer will pay to replace your boat with one that is as similar to your boat as possible. If you choose not to replace your boat, or if it is too old, your insurer will reimburse you the original purchase price of the boat.

Check with the company that provides your homeowners insurance to see if they sell boat insurance. You may be eligible for a discount if you have multiple policies (e.g. homeowners, automobile, and boat) with the same provider.

The personal property coverage of your homeowners policy may cover a small boat for $1,500 or less in physical damage. However, coverage for your liability risk is limited. A large boat will be excluded from your homeowners policy for both property and liability coverage.

Personal watercrafts, such as Jet Skis, will likely require a separate policy that may be offered by your homeowners’ insurer, or you may purchase your policy from an insurer that specializes in boat insurance. Talk with your insurance agent or get quotes from other companies to understand your options.

Motorcycles and Scooters
Motorcycles and scooters are not covered by a standard auto insurance policy. You must have a separate policy that covers liability, no-fault personal injury protection coverage (if required in your state), or medical payments coverage (if required). Depending on the value of the motorcycle, you may need to purchase comprehensive and/or collision coverage. When you're getting a quote for insurance for your motorcycle or scooter, ask your insurance provider about any discounts they may offer for taking safety courses or having multiple policies with the same insurance provider.

If you carry seasonal coverage on your motorcycle, which allows you to eliminate liability and perhaps collision coverage during the months you don’t ride, make sure your policy is up to date and that you have a current insurance card before hitting the road this summer.

Also, be sure you understand your state’s law and your policy’s requirements regarding wearing a helmet. If you have specific questions, contact your state insurance department.

All-Terrain Vehicles (ATVs)
ATVs are not covered by standard automobile insurance policies; however, your homeowners policy may partially cover liability. Ask your agent if you have sufficient coverage on your homeowners policy. If you do not, you may want to consider a separate ATV policy.

You should also ask your provider about age restrictions regarding who may operate the ATV, or if the policy covers friends and family, as this could affect the coverage you choose to purchase.

Backyard Fun – Pools and Trampolines
While they are fun for the family, the dangers associated with pools and trampolines may increase your insurance risk. Consider purchasing an umbrella policy in addition to your homeowners insurance to provide additional liability coverage. Some companies may not insure your property if you have a trampoline or swimming pool. There may also be policy exclusions for liability related to trampoline or swimming pool injuries.

An insurance company may deny coverage or cancel your policy if you do not follow the policy’s safety guidelines or fail to inform the company when you build a pool or purchase a trampoline. Check with your insurance provider for rates, discounts and safety guidelines, such as installing a fence or locked gate.

For many people, fireworks are a tradition on the 4th of July. However, the use of fireworks, which are illegal in some areas, could jeopardize your insurance coverage if someone is injured or if your home is damaged.

If fireworks are legal in your area, check with your insurance company or agent to determine that you have the appropriate liability and physical damage coverage for your home in the event of injury or damage to your property from the use of fireworks. You should also ask if there are any safety requirements in your policy. Check with your agent to determine whether you would be covered in the event that someone other than a family member causes damage to your property.

More Information
If your summer plans include a trip abroad, check out this consumer alert about travel insurance.

Contact your state insurance department for more information about your insurance needs for summer fun. You can also visit Insure U to learn more about the health, home, life and auto insurance options that best fit your needs.

June 2014



The National Association of Insurance Commissioners Headquartered in Kansas City, Mo., the National Association of Insurance Commissioners (NAIC) is a voluntary organization of the chief insurance regulatory officials of the 50 states, the District of Columbia and five U.S. territories. The NAIC's overriding objective is to assist state insurance regulators in protecting consumers and helping maintain the financial stability of the insurance industry by offering financial, actuarial, legal, computer, research, market conduct and economic expertise. Formed in 1871, the NAIC is the oldest association of state officials. For more than 135 years, state-based insurance supervision has served the needs of consumers, industry and the business of insurance at-large by ensuring hands-on, frontline protection for consumers, while providing insurers the uniform platforms and coordinated systems they need to compete effectively in an ever-changing marketplace. For more consumer information, visit InsureUonline.org.

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