Protect Your Customers from Watered-DownPWC Coverage

The United States boasts nearly 51 million acres of lakes, 633,000 miles of rivers and 88,600 miles of coastal shoreline. So, it’s little wonder that water recreation is a popular summer pastime. In recent years, personal watercraft (PWC) have become the vehicle of choice for a number of water lovers, with more than one million owned throughout the nation.

With so many owners, you’ve likely had people asking for your help insuring their PWC. Or, you might know of people who don’t bother to insure the unit at all. Agents need to educate their customers about the importance of obtaining protection for their PWC. “Brand-new owners tend to have a learning curve in regards to the maneuverability of the unit,” says Matt Spaulding, product manager at American Modern Insurance Group, a specialty insurance provider. “PWCs work very differently than boats, and can be difficult for new operators to use. This lack of knowledge can often result in accidents, especially in the first year or two of ownership.”

Some agents commonly make low prices a priority when looking for insurance coverage. After all, that’s usually the main concern for customers. However, Bill Martin, director of operations and underwriting at South & Western General Agency in Texas, says that when it comes to PWCs, shopping for the lowest price may mean you’re not getting a very comprehensive policy. “Unlike homeowners and auto insurance markets, PWCs have no minimum standard of coverage,” says Martin. “The agent really needs to review what the customer’s getting for his money, to ensure they’re protected properly.”

Now, if you’ve ever looked into PWC-specific insurance, you know quite a few players currently service the market. And, since there is no minimum standard of coverage, it can be very difficult to determine who offers the best insurance for your customers. When comparing coverages, try starting with carriers who specialize in the marine market, since they make it their business to understand the needs of PWC owners. Plus, they tend to tailor the policy to the owner’s habits and coverage needs, giving maximum flexibility. “A person living in Minnesota, who takes a Florida vacation in January, may want to hook up a trailer and bring their PWC with them,” says Martin. “It’s important to note that some policies limit or void coverage for instances like this.” Therefore, Martin recommends finding a specialty policy with no required lay up period and no navigational area restrictions.

But, even among specialty carriers, agents have to do their homework. “Some specialty policies exclude waterski liability, or only offer it at an additional charge,” says Martin. “Most people who own three- and four-person units are looking to have some fun waterskiing behind the PWC, so they need this coverage.” Other coverages that can benefit your customer are uninsured watercraft, emergency assistance towing and non-owned liability. And not all policies provide them.

In addition, because specialty carriers tend to have extensive expertise in the lines they write, claim staff at those companies are well-trained and knowledgeable about the product. “It really shows when a claim adjuster knows the product on an personal level,” says Joann Farmer of Hibbs Hallmark Agency in Tyler, Texas. “That kind of knowledge helps the whole claim process go a bit more smoothly, benefiting agents and customers alike. After all, agents generally only hear about a claim experience if it was a bad one.”

All of that said, once you’ve done your research and sold your customer the right PWC policy, you may find they want to cancel it after the summer is over. Don’t let them! “If people cancel their coverage after the season is over, they’re doing themselves a disservice,” says Spaulding. “Things can and do happen in the winter. American Modern routinely receives off-season PWC claims.” Spaulding also warns, “Carriers generally don’t like to see lapses in coverage, and may hesitate or even refuse to insure a person with a lapse. This can make it tough for the customer to find coverage again in the spring. And, if the owner has a collateral loan on the PWC, the lienholder of the loan may protect his interests by requiring insurance on the unit year-round.”

“All in all, PWC insurance presents a series of choices for the consumer,” says Martin. “The task is to make sure the customer is covered by insurance tailored to his specific PWC needs. This is exactly why we have specialty insurance in the first place.”

Ruth Peck is the personal lines department manager at South & Western General Agency in Addison, Texas.

Topics Texas Agencies Excess Surplus