Question

39. All of the following statements regarding a Boatowners policy are true EXCEPT

(Choose from the following options)
1. Automatic coverage is provided on replacements for the boat listed in the declarations provided the insured notifies the insurer within 60 days of purchase and pays any additional premium required.
2. Watercraft liability coverage provides protection up to specified limits, for claims against a "covered person" for damages because of bodily injury caused by a watercraft occurrence.
3. Physical damage coverage is provided on an actual cash value (ACV) basis.
4. The perils insured against is on an open-peril basis, providing that the insurer will pay for direct and accidental loss to the property insured.

Answer 1

The boatowner's policy provides coverage for boats and watercraft. Statement 3 about physical damage coverage is not provided on an actual cash value (ACV) basis is false.

Step-by-step explanation:

The boatowner's policy is a type of insurance policy that provides coverage for boats and watercraft. It is designed to protect the owner from various risks and liabilities associated with owning a boat.

Regarding the statements provided, all of them are true except for statement 3. Physical damage coverage is not provided on an actual cash value (ACV) basis. Instead, it is typically provided on an agreed value or replacement cost basis. Under an agreed value basis, the insured and the insurer agree on the value of the boat, and in case of a covered loss, the insurer will pay out the agreed value. Under a replacement cost basis, the insurer will pay for the cost of replacing the boat with one of a similar kind and quality.