TECH TALK Golf Carts and Campgrounds... Is There HO Coverage? July 2012 By Irene Morrill, CPCU, CIC, ARM, CRM, CRIS, LIA CPIW Vice President of Technical Affairs If it s summer, then it must be time to write about golf carts. Oddly enough, I wrote a Tech Talk on the HO policy and golf carts in June 2005, but the issue of campgrounds was NOT addressed and I have had that question a few times lately. So... under the Insurance Services Office (ISO) Homeowners forms... let s see what coverage a golf cart gets HO Coverage C Personal Property and the golf cart... not HO-91 The ISO HO-91Coverage C Personal Property excludes personal property coverage for most motorized vehicles. Property Not Covered. We do not cover: 3. Motor vehicles or all other motorized land conveyances. This includes:... and ONLY covers We do cover vehicles or conveyances not subject to motor vehicle registration which are: a. Used to service an insured s residence; or b. Designed for assisting the handicapped A golf cart IS a vehicle but it is NOT designed to assist the handicapped and is most probably not EVER used to service an insured s residence... so don t count on contents coverage under the ISO HO-91. HO-2000/HO-2011 First we have the definition of motor vehicle introduced: 7. Motor vehicle means: a. A self-propelled land or amphibious vehicle; or b. Any trailer or semitrailer which is being carried on, towed by or hitched for towing by a vehicle described in a. above. A golf cart certainly IS a motor vehicle under the HO-2000/HO-2011. Massachusetts Association of Insurance Agents 91 Cedar Street - Milford, MA 01757 TECH Hotline 800.870.7091 * 800.972.9312 * 508.634.2900 * 508.634.2929 (FAX)
2 HO-2000 4. Property Not Covered We do not cover: c. Motor vehicles. (1) This includes:. (2) We do cover motor vehicles not required to be registered for use on public roads or property which are: (a) Used solely to service an insured s residence; or (b) Designed to assist the handicapped HO-2000 is wicked strict on Coverage C for self-propelled vehicles. It is only covered if used SOLELY to service an insured s residence or designed to assist the handicapped. SO again... no Coverage C. HO-2011 Not as strict but... still no contents coverage for a golf cart. 4. Property Not Covered We do not cover: c. Motor vehicles. This includes a motor vehicle s equipment and parts. However, this Paragraph 4.c. does not apply to: (2) Motor vehicles not required to be registered for use on public roads or property which are: (a) Used solely to service a residence; or (b) Designed to assist the handicapped; The HO-2011 is a tad broader for motor vehicles... we still have the word solely but one can service A residence and not just an INSURED S residence. Traipsing around the camp ground precludes coverage as it is not used SOLELY to service. Again, the golf cart is NOT designed to assist the handicapped. Is there liability coverage for use at a campground? Personally, I don t think an ISO homeowners edition will provide liability coverage for an OWNED golf cart used at a campground -- but we ll look at the language and you decide. HO-91 1. Coverage E Personal Liability and Coverage F Medical Payments to Others do not apply to bodily injury or property damage : f. Arising out of: (1) The ownership, maintenance, use, loading or unloading of motor vehicles or all other motorized land conveyances, including trailers, owned or operated by or rented or loaned to an insured ; This exclusion does not apply to: (2) A motorized land conveyance designed for recreational use off public roads, not subject to motor vehicle registration and: (a) Not owned by an insured ; or (b) Owned by an insured and on an insured location ; (3) A motorized golf cart when used to play golf on a golf course
3 There is a COMPLETE exclusion for a motorized land conveyance for BI/PD/MP. However, the exclusion does NOT apply to (i.e. there IS coverage for) a motorized land conveyance designed for recreational use OFF public roads not subject to motor vehicle registration and owned by an insured. This can apply to a golf cart. It IS designed for recreational use OFF public roads and for the most part if not modified it is NOT subject to motor vehicle registration. The DOWNSIDE... is that coverage ONLY exists ON an insured location. What does THAT mean? Insured location definition HO-91 (same for HO-2000/HO-2011 except numbering different) 4. Insured location means: a. The residence premises ; b. The part of other premises, other structures and grounds used by you as a residence and: (1) Which is shown in the Declarations; or (2) Which is acquired by you during the policy period for your use as a residence; c. Any premises used by you in connection with a premises in 4.a. and 4.b. above; d. Any part of a premises: (1) Not owned by an insured ; and (2) Where an insured is temporarily residing; e. Vacant land, other than farm land, owned by or rented to an insured ; f. Land owned by or rented to an insured on which a one or two family dwelling is being built as a residence for an insured ; g. Individual or family cemetery plots or burial vaults of an insured ; or h. Any part of a premises occasionally rented to an insured for other than business use. I don t see how one can find coverage for roaming around a campground in the above definition. The best you can get is d any part of a premises not owned by an insured where an insured is temporarily residing. To ME that means the camp SITE... not the 400 acre camp ground. I rented site #1. That is where I am temporarily residing. I can drive my golf cart around my campsite. Is the campground land vacant and is it actually RENTED to an insured? The camp site is rented to you, but is the campground? Is the campground... vacant... I doubt it is vacant. If the company wants to interpret where I am temporarily residing as the complete campground then great -- get it in writing. If they want to consider the campground s vacant land rented to you -- great -- get it in writing. If I am not using my owned golf cart on an insured location. The only other location that the HO-91 will provide me with BI/PD/MP to others is playing golf on a golf course. Again, not a campground. HO-2000/HO-2011 In addition to the new definition of motor vehicle these editions also have a definition of motor vehicle liability. 1. Aircraft Liability, Hovercraft Liability, Motor Vehicle Liability and Watercraft Liability subject to the provisions in b. below, mean the following: a. Liability for bodily injury or property damage arising out of the: (1) Ownership of such vehicle or craft by an insured ; (2) Maintenance, occupancy, operation, use, loading or unloading of such vehicle or craft by any person; (3) Entrustment of such vehicle or craft by an insured to any person;
4 (4) Failure to supervise or negligent supervision of any person involving such vehicle or craft by an insured ; or (5) Vicarious liability, whether or not imposed by law, for the actions of a child or minor involving such vehicle or craft. b. For the purpose of this definition: (1) Aircraft means any contrivance used or designed for flight except model or hobby aircraft not used or designed to carry people or cargo; (2) Hovercraft means a self-propelled motorized ground effect vehicle and includes, but is not limited to, flarecraft and air cushion vehicles; (3) Watercraft means a craft principally designed to be propelled on or in water by wind, engine power or electric motor; and (4) Motor vehicle means a motor vehicle as defined in 7. below A golf cart IS a motor vehicle and we already said it was owned, so the definition for BI/PD arising out of the owned motor vehicle could apply to a golf cart. So, do we have coverage for motor vehicle liability or not? Well, there is a motor vehicle exclusion under Section II BI/PD and MP to others. SECTION II EXCLUSIONS A. Motor Vehicle Liability 1. Coverages E and F do not apply to any motor vehicle liability if, at the time and place of an occurrence, the involved motor vehicle : a. Is registered for use on public roads or property; b. Is not registered for use on public roads or property, but such registration is required by a law, or regulation issued by a government agency, for it to be used at the place of the occurrence ; or So far the exclusion does NOT apply as a golf cart used in a private campground should not be subject to ANY kind of governmental registration. But, we must keep reading: 2. If Exclusion A.1. does not apply, there is still no coverage for motor vehicle liability unless the motor vehicle is:. d. Designed for recreational use off public roads and: (1) Not owned by an insured ; or (2) Owned by an insured provided the occurrence takes place on an insured location as defined in Definitions B. 6.a., b., d., e. or h.; or e. A motorized golf cart that is owned by an insured, designed to carry up to 4 persons, not built or modified after manufacture to exceed a speed of 25 miles per hour on level ground and, at the time of an occurrence, is within the legal boundaries of: (1) A golfing facility and is parked or stored there, or being used by an insured to: (a) Play the game of golf or for other recreational or leisure activity allowed by the facility; (b) Travel to or from an area where motor vehicles or golf carts are parked or stored; or (c) Cross public roads at designated points to access other parts of the golfing facility; or (2) A private residential community, including its public roads upon which a motorized golf cart can legally travel, which is subject to the authority of a property owners association and contains an insured s residence. Whether the HO-91, HO-2000 or HO-2011 a golf cart used in a camp ground still provides a problem.
5 As said before, it IS a vehicle designed for recreational use OFF public road. If owned it can be used on CERTAIN (not all) insured locations. In the HO-2000 and HO-2011 insured location is definition 6 not 4 as in the HO-91, but the wording is almost identical. The HO-2000/HO-HO-2011 editions do not allow use on ALL insured locations but you still get d where an insured is temporarily residing and e vacant land. But, as mentioned before, do these parts of the definition REALLY apply? Is the entire campground RENTED to the insured? Is the campground VACANT land RENTED to the insured? The HO-2000/HO-2011 have multiple paragraphs expounding on how they will gladly respond to BI/PD and MP to others when the golf cart meets certain criteria and is used anywhere it is allowed in a golfing facility or anywhere in a private residential community. A campground is NOT a golfing facility nor is it a private residential community. So... when asked to provide a certificate of insurance to the campground as proof of liability coverage so that your client can bring their OWNED golf cart to the campground, what do you do? I would contact my client s HO carrier and ask if the definition of insured location applies to a campground. If I get a yes, I issue the certificate. If I don t, I sell my client a golf cart liability policy and then issue a certificate assuming I have the legal right to do so. I have read various articles on how strictly some HO companies are interpreting the insured location definition in the HO policy. I find some of the interpretations particularly restrictive and am saddened when the court agrees. I believe it is a good definition, but I still find a problem with the concept of campground. That s my story and I m stickin to it. Good luck. If I can be of service to you, please call me, Irene Morrill, Vice President of Technical Affairs, at 800.870.7091 or email me at imorrill@massagent.com. This article has been developed expressly for the members of MAIA. Reprint by other than members without the express permissions of the author is not permitted.