South Carolina Personal Lines Practice Exam

Which of the following conditions must be met for watercraft to be covered under a homeowner's or condo policy?

1. Private use only

2. Rated for 25 hp or less

3. Must not require a trailer

4. All of the above

The correct answer is: Must not require a trailer

For watercraft to be covered under a homeowner's or condo policy, certain conditions must be satisfied. One of the primary conditions is that the watercraft must typically be for private use only. This means if the watercraft is used for business or commercial purposes, coverage under a typical homeowner’s policy would not apply. Additionally, there’s often a specification regarding the horsepower of the watercraft. Many homeowner's policies restrict coverage to vessels rated for 25 horsepower or less, ensuring that relatively small and less powerful boats are covered rather than larger, potentially more risky vessels. Lastly, concerning the trailer, many policies do indeed cover watercraft that do not require a trailer. However, this point does not universally apply as a requirement for coverage, because some policies may provide coverage regardless of whether a trailer is needed for transport. Considering all these conditions together, the ideal answer highlights the specific criteria that must all be met for watercraft to be included under a homeowner's or condo policy. Hence, the correct understanding is that it’s not solely dependent on not requiring a trailer, but rather a combination of all specified conditions being satisfied.