Jet Ski. Sea Doo. WaveRunner. Boatercycle. It doesn’t matter what you call your personal watercraft (PWC). You love it all the same!
You value your PWC because it is extraordinarily fun to operate, and an inextricable part of your plans for summer leisure. You also value your PWC because it is … well, valuable. A high-end model can easily cost more than a new sedan.
Like anything else you value, your PWC deserves to be protected. That goes beyond purchasing a nice nylon cover for it. It also includes safeguarding it with the best watercraft insurance policy for your budget and unique needs.
Not familiar with PWC insurance? Let’s cover the basics so you’re in a better place to make an informed decision.
Is PWC Insurance Necessary?
PWC insurance isn’t strictly necessary from a legal standpoint. The great state of Iowa does not require residents to purchase boat insurance. PWCs are included in that exemption.
That said, operating a PWC can be dangerous. According to the U.S. Coast Guard, PWCs were involved in 574 casualties in 2023. They are the second most common type of watercraft involved in reported accidents, just after open motorboats. Thirty-seven PWC accidents were reported in Iowa during last year alone.
Not every PWC accident is deadly, but it can still have enormous financial implications for whomever is held liable for it. Recreational boating accidents cause over 2,500 injuries and $40 million in property damage each year in the United States. PWCs were involved in 18% of these accidents.
To summarize, neither the federal nor Iowa state government requires you to have PWC insurance. But if you are involved in an accident that causes death, injury or property damage, you may be required to indemnify whomever is harmed – potentially to the tune of hundreds of thousands of dollars. That’s why PWC insurance is necessary: It prevents an accident from turning your summer fun into financial ruin.
Does a Homeowners Insurance Policy Cover PWC Accidents?
A homeowners (or renter’s) insurance policy may cover inboard watercraft with less than 50 horsepower, as well as outboard watercraft with less than 25 horsepower. For comparison, a standard PWC has around 150 horsepower
To put it another way: No homeowners insurance policy covers the policyholder’s PWC. No auto insurance policy covers the policyholder’s PWC, either. Only a specialized watercraft insurance policy covers a PWC owner in the event they are held liable for damages.
What Does PWC Insurance Cover?
PWC insurance doesn’t just include liability coverage, which can go into effect if the policyholder is sued for causing property damage, injury or death. It typically covers the following as well:
- Theft
- Vandalism
- Wind damage
- Lightning damage
- Medical payments for the PWC’s owner and injured passengers
- Physical damage resulting from collision with a submerged object
Note that each type of coverage may come with a different deductible, meaning the policyholder must pay a certain amount out of pocket before their insurance takes effect. Furthermore, its insurance policy may not cover a PWC during the off-season. If you would like to rest assured that your PWC is covered while it is stored on land, then you may request lay-up period coverage.
What Else Can PWC Insurance Cover?
PWC insurance may include additional coverages beyond those listed above. These can include:
- Fuel spill liability
- On-water towing
- Hurricane haul-out
- Coverage for expensive equipment
- Assistance after a breakdown or running aground
- Coverage for damage resulting from ice or freezing
Does Insurance Cover the Cost of a Lost PWC?
Yes – but the amount a policy actually pays out depends on whether it considers the actual cash value (ACV) or agreed value (AV) of the lost or destroyed PWC.
If it is ACV, then the payout is equal to the value of the PWC when it was lost; essentially its market value, or original manufacturer’s suggested retail price minus depreciation and wear and tear. If it is AV, then the payout equals an amount that was determined between the insurance provider and policyholder at the time the policy went into effect.
ACV is nearly always less than AV. As such, a PWC insurance policy which pays out ACV is typically accompanied by a lower premium.
If you own a PWC in Iowa, then we hope you spend your summers gliding across Iowa’s 236 beautiful lakes without a care in the world. But if something does go wrong, then we dearly hope you had the foresight to purchase PWC insurance ahead of time. If you would like to prevent a PWC accident from costing you big, then we encourage you to contact The Hoffman Agency for the policy that best suits your needs!