South Carolina Personal Lines Practice Exam

What are the two sections of a boatowner/watercraft policy?

1. Liability coverage and personal property coverage

2. Section 1 - physical damage and Section 2 - liability coverage

3. Section 1 - medical payments and Section 2 - property damage

4. Section 1 - liability and Section 2 - personal injury protection

The correct answer is: Section 1 - physical damage and Section 2 - liability coverage

A boatowner/watercraft policy typically consists of two primary sections that cover different aspects of insurance needs related to watercraft. Section 1 focuses on physical damage, which includes coverage for damage to the boat itself, whether it results from an accident, theft, or other specified perils. This part of the policy ensures that the owner is protected against the cost of repairing or replacing their watercraft, making it crucial for safeguarding their investment. Section 2, on the other hand, addresses liability coverage. This section protects the boat owner from legal liabilities that may arise from bodily injury or property damage caused to others while using the watercraft. Given the nature of water activities, having robust liability coverage helps the boat owner defend against claims and lawsuits that can be quite costly. Understanding the functions of these sections helps boat owners make informed decisions about their insurance needs, ensuring they have adequate protection for both the vessel itself and their potential liabilities while on the water.