Purchasing scuba equipment is an investment in the sport. Not only can it save in cost over the long run, but it can also enhance your safety. Additional purchases beyond our basic gear, such as technical diving, underwater camera equipment, integrated dive computers, and diver propulsion vehicles, can bring our investment up considerably. It makes sense that you would like to insure your equipment against theft and accidental damage.
Many divers wrongly believe that their diving accident insurance will protect their equipment investment. While dive equipment is listed as covered in these policies, the fine print clarifies that the equipment is only covered in cases of a covered accident.
While looking at different insurance policies, it is important to understand that a policy may be based on actual cash value (ACV) or replacement cost value (RCV). A policy based on cash value will have a depreciation applied, while one based on replacement cost will look at the current price for the item or like item to establish a price to replace the item claimed.
There are four types of policies that we may use to insure our gear:
- Scuba Equipment exclusive equipment policies such as DAN/ H2O policies
- Personal Property Insurance that is a part of another policy provided by insurance companies
- Personal Article Insurance, a standalone policy
- Carry On Equipment coverage of a Boating Insurance Policy
H2O Insurance
The Diver Alert Network (DAN) has partnered with H2O insurance (https://www.h2oinsurance.com) to provide equipment insurance within the United States. H2O insurance is a division of Marsh McLennan Agency (MMA). H2O specializes in scuba diving, which makes any claim easier to process. The highlights of their policies include coverage for water damage (flood coverage) on all items, immediate binding coverage upon completion of the online enrollment; they do not replace or repair your equipment; they provide the replacement or repair funds, are A+ rated insurance carrier, and your policy has worldwide coverage.
You must list the items you wish to cover when creating your policy. Items valued over $2,500 will require you to submit the serial number. Low-cost items, such as masks, fins, and gloves, can be grouped together as Miscellaneous Equipment with a value of up to $500. They do not provide coverage for items that are lost underwater while you are diving, that fall off the back of the boat or are swept overboard. To add items later, a fee of $15 is charged.
Payments on claims are based on RCV. There is a deductible of $100 unless the claim is for water damage. In the case of a water damage claim, the deductible will be the greater than 10% of the claim or $250.
Personal Property Insurance
If you already have Homeowners Insurance, Rental Insurance, or Condo Owners Insurance, you will likely have some coverage for your scuba equipment. This is often referred to as Coverage C on your policy. Coverage C provides reimbursement for your personal property items lost, stolen, or damaged even outside of your home. Your policy may specify non-qualifying events such as an earthquake or civil unrest. Your Homeowners insurance policy may limit the loss they will cover; this is generally a percentage of the overall coverage. Rental insurance and Condo Owners’ insurance focus primarily on personal property, so this may not apply. Also, some classes of items (jewelry, fine arts, and electronics, as examples) will be subject to a sub-limit. Your policy will generally be based on an ACV for personal items and carry a deductible.
Under these types of policies, you can add personal property coverage. This is a rider or endorsement to your policy that lists specific items for insurance coverage and has a value assigned to each item. There will be an added cost for this coverage. The RCV is set at the time of the policy, and generally, no deductible is applied.
We have discussed equipment coverage in previous articles back in the April 2011 issue and June 2007.
The topic is often mentioned on scuba diving-related message boards. While many readers have supported using their current insurance, some have expressed concerns. One frequent concern is that processing a claim has increased their insurance rate upon renewal. Another concern mentioned is that those handling the claims may not be aware of diving equipment and cannot correctly apply a value. Claims judged to be repairable often require the item to be sent to the insurance company to assess the repairs.
Personal Article Insurance
These policies are similar to the personal property coverage mentioned above. However, they are standalone policies. When talking to an insurance agent about these policies, it seems important to refer to them as personal article and not personal property. I made that mistake on a couple of phone calls and was told I must have homeowners or rental insurance to cover personal property.
The major insurance companies all have this coverage. While terms vary by company and state, they generally are RCV policies with no deductibles. These policies are available as a schedule, which covers listed items, or a blanket coverage, which is done by category. If your list of items includes camera equipment, you will need to insure that flooding of the camera is included. Industry averages for scuba equipment are unavailable; however, these policies average between 0.75% and 1.5% of the amount insured annually.
Boat Owners Policy
While limited in scope, a boat owner’s policy can cover damage to your scuba diving equipment that occurs on your boat. Carry-on items like fishing gear, scuba equipment, and cell phones are protected while loading, unloading, and while on your boat. Generally, the limit for scuba diving equipment is $5,000, and fishing equipment is $10,000.
Charles Davis