Boaters of an earlier generation who sought thrills behind a speeding boat had a limited handful of options in their day. They could have slipped on some water skis, which in those days were often the wooden ones that might last a couple of seasons before their fittings seized up and became inoperable. Later, boogie boards appeared on the scene, which helped broaden the envelope of adrenaline rushes. Today, there are towable toys that go beyond any thrillseeker’s wildest dreams.
Technology has come a long way since the days when water toy designers were limited to using wood, aluminum, and rubber. In addition to materials science, the imaginations of designers who conceive these things on drawing boards have also come a long way. Some of these creations are on the tame side, like those inflatable tubes that people ride like giant bananas at vacation resorts. Then there are the toys that seem to skirt the boundary between wave-skimming hydroplane and low-flying aircraft. These lift off the water and actually become airborne as they’re towed. It was one such device, known as a Kite Tube, that became the subject of an insurance coverage lawsuit.
In the lawsuit at hand, a family that owned a Kite Tube lent it out. The borrower towed it behind a boat that had a 120-horsepower engine while a friend was riding it. The friend riding the Kite Tube was injured. He sued the boat operator and the family that loaned the Kite Tube out. The family that owned the Kite Tube turned the matter over to their homeowner’s insurance policy, issued by Allstate.
Allstate denied the claim, relying on a policy exclusion that did not cover “bodily injury or property damage… …if the watercraft (a) has inboard or inboard-outboard motor power of more than 50 horsepower, (b) is a sailing vessel 26 feet or more in length, (c) is powered by one or more outboard motors with more than 25 total horsepower, (d) is designated as an airboat, air cushion, or similar type of watercraft, (e) is a personal watercraft, meaning a craft propelled by a water jet pump engine and designed to be operated by a person or persons sitting, standing or kneeling on the craft.”
The family that owned the Kite Tube admitted that the Kite Tube was a “watercraft,” but argued that it was not “powered by one or more outboard motors.” This contention was based on the fact that the Kite Tube has no independent power source, leave alone one as small as 25 horsepower.
The court did not accept this position. So far as the court was concerned, it wasn’t necessary that an actual physical engine be situated in the craft. It was enough that the Kite Tube was towed by a boat with a 120-horsepower engine. That satisfied the condition of “powered by” in section (c) of the exclusion above. In other words, being towed by the primary vessel effectively meant “powered by.” The court ruled in favor of Allstate. This meant Allstate would be permitted to exclude coverage for the accident.
For many boaters, some of the biggest thrills of being on the water come more from using the inventory of “toys” than a boat itself. However, it can pay to check insurance policies to determine what is covered and what is not. And aside from the business of water toys, policies can be quite specific just in the realm of boats when it comes to a type of usage (commercial vs. recreational), who is covered, what geographical areas are covered, as well as other aspects of usage, such as the duration of a season or entrusting a vessel to someone.
Insurance coverage might not be the most exciting thing to look into as another boating season gets underway. However, as this case demonstrates, courts will closely examine the wording in an insurance policy in determining whether a boat owner will be covered against injury or physical damage claims in the event of an accident.
Allstate Casualty Ins. Co. v. Warchol, et al., Case No. 3:09CV1023, United States District Court for the Northern District of Ohio, Western Division