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An insured owns a 32-foot inboard motorboat. Which statement about her personal umbrella's response to a bodily-injury claim arising from operating that boat is MOST accurate?
The umbrella excludes the boat unless underlying watercraft liability coverage is in place
BThe umbrella covers the claim on a drop-down basis without any scheduled or required underlying watercraft policy
CThe umbrella drops down with only the self-insured retention because owned watercraft is not actually a listed exclusion
DThe umbrella covers it only while the boat is moored or being operated within U.S. coastal territorial waters
Why this is the answer
The ISO Personal Umbrella Liability Policy (DL 98 01) excludes watercraft liability except to the extent the insured has underlying watercraft insurance that covers it. A 32-foot inboard boat with no underlying watercraft policy therefore has no umbrella coverage. Many insurers' own umbrellas set a length or horsepower threshold instead and require the boat to be scheduled with a minimum underlying limit, but the result without underlying coverage is the same.
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