Difficulty: Hard

Average Score: 33%

Which of the following watercraft could the insured purchase and be assured it is automatically covered for liability under their homeowners policy?

Rationale

An outboard boat with a 15 horsepower engine is automatically covered for liability under a homeowners policy.

Homeowners insurance typically covers small boats, including outboard motors, but there are horsepower limits. In this case, an outboard boat with a 15 horsepower engine falls within the coverage limits provided by many homeowners policies.

A (A 30 foot sailboat) YOUR ANSWER

Sailboats often exceed the size and type limitations set by standard homeowners insurance policies. Most homeowners policies do not automatically cover sailboats, especially those that are larger or not classified as a small watercraft.

B (A 50 foot sailboat) YOUR ANSWER

Similar to the 30-foot sailboat, a 50-foot sailboat is significantly larger than what is typically covered under a homeowners policy. Many policies exclude coverage for sailboats over certain lengths, making it ineligible for automatic liability coverage.

C (An outboard boat with a 15 horsepower engine) CORRECT

This option meets the criteria for automatic liability coverage under a homeowners policy. Many homeowners insurance policies allow for coverage of outboard boats with engines below a certain horsepower threshold, which 15 horsepower does meet.

D (An outboard boat with a 50 horsepower engine) YOUR ANSWER

A 50 horsepower outboard boat generally exceeds the horsepower limit imposed by standard homeowners policies. As a result, it would not qualify for automatic liability coverage, and separate boat insurance would typically be necessary.

Conclusion

Understanding the coverage limits of homeowners insurance is crucial for boat owners. An outboard boat with a 15 horsepower engine is the only choice that falls within the typical liability coverage automatically provided, while the other options exceed size or horsepower limits, necessitating additional insurance coverage.

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