Most people are familiar with short-term rental services like Airbnb, which allows strangers to rent a home or apartment. Did you know there are also platforms to allow for short-term rentals of boats? These rental services are called “peer-to-peer” or P2P rentals. Boat owners who wish to make extra cash may want to rent their boats for the day or week. Unfortunately, not all boat owners’ insurance policies cover damage or loss of a vessel if it has been rented to another operator. Your boat owning clients need personal watercraft rental insurance to help cover any risk exposures in the P2P environment. Here is a guide to help your clients determine whether they need peer-to-peer insurance and the benefits of obtaining a comprehensive policy.
What are Peer-to-Peer Boat Rentals?
Peer-to-peer or P2P boat rentals are a relatively recent phenomenon. Spurred by the rise in popularity of Airbnb, boat owners and fleet owners decided to create rental platforms of their own. These rental services are sometimes called “boat sharing” services. For a service fee, a P2P boat rental platform will connect a boat owner with someone interesting in getting out on the water. For some users, this is a good way to explore boating before making a vessel investment. For owners, this can be a good way to make extra income, helping to defray the expenses associated with owning a boat.
P2P platforms may have their own peer-related personal watercraft rental insurance available to renters for a fee; in other cases, the boat owner is responsible for providing such insurance coverage. It is critical that a personal watercraft rental policy is in place, as any damage to the rented boat or an injury to a renter can have financial ramifications for the boat owner.
Personal Watercraft Rental Insurance in the P2P Rental Environment
Personal watercraft (PWC) rental insurance is typically comprised of three coverage areas:
- Watercraft coverage – protecting against bodily injury or property damage while a rental operator is using the vessel.
- Hull coverage – protects the watercraft itself if the vessel is damaged or lost due to an accident during a rental.
- Premises/general liability – insurers the boat owner or rental company from liability risks as renters arrive and/or depart from a dock or rental facility.
In the P2P environment, these coverage areas are typically represented as well. Each policy is different, however, and boat owners should utilize the services of an experienced specialty insurance provider. Agents can also rely on specialized brokers to find the right policies for a boat owner’s individual needs and budget.
Insurers have been slow to add P2P watercraft rental insurance, but as the popularity of boat sharing platforms grows, more are adding these unique policies to their offerings. To best help your clients, discuss rental options with them. If they plan on using a P2P boat rental service, their existing policies may be inadequate. P2P personal watercraft rental insurance is a valuable solution.
About Merrimac Marine Insurance
At Merrimac Marine, we are dedicated to providing insurance for the marine industry to protect your clients’ business and assets. For more information about our products and programs, contact our specialists today at (800) 681-1998.