In a Comprehensive Personal Liability policy, under what condition is a watercraft excluded?

• A. If it is equipped with a 25 horsepower inboard motor
• B. If it measures over 20 feet in length
• C. If it has an outboard motor exceeding 20 horsepower
• D. If it is a vessel used occasionally

Answer: (C)

In a Comprehensive Personal Liability policy, a watercraft is excluded when it has an outboard motor exceeding 20 horsepower. This exclusion is in place because high-powered watercraft can pose greater risks, leading to higher potential liabilities for insurance companies. This rule aims to mitigate the risks associated with more powerful boats, which are more likely to be involved in serious accidents or cause damage.

The other conditions listed do not necessarily meet the criteria for exclusion. For example, a watercraft equipped with a 25 horsepower inboard motor or measuring over 20 feet in length does not automatically lead to exclusion under most policies. Likewise, a vessel used occasionally may not present the same liability concerns as a more powerful or larger craft, so it typically remains covered within the terms of liability insurance. Thus, the specification regarding the outboard motor's horsepower is the key factor that dictates the exclusion.