Watercraft Losses

Step-by-step checklist

Identify

• Contact the claim adjuster right away. Ask them to hold the scene and for permission to retain an expert at the client's expense. Note the call in the file.
• On every claim, ask the client whether they want an origin and cause investigator to review the scene, or confirm one is already assigned. Note their answer in the file so the decision is on record.
• Make sure no evidence is touched or moved until the expert has secured the scene
• Get the client's approval for the scene exam cost. Most run at least $1,600 with travel, the day rate, and expenses.
• Confirm whether maritime law or state law applies (navigable waters?)
• Get the boating accident report
• Get each vessel's hull ID, registration, operator, owner, and insurer
• Spot the presumption that helps you: Oregon, Louisiana, or Pennsylvania Rule

Hands off until the expert arrives. Nothing at the scene gets touched, moved, repaired, or thrown out until the origin and cause investigator has secured it. Evidence that's moved early can sink the whole recovery.

Notify

• Notify the operator, owner, boat insurer, and any marina or rental company
• Diary the owner's 6-month Limitation Act window from your first written claim

Investigate

• Hire a marine surveyor for the damage and the other vessel's value
• Hold a joint inspection before repairs
• Collect GPS data, dock video, weather, and witness statements
• Rental? Get the agreement, damage waiver, checklist, briefing record, and maintenance logs.

Demand

• Review payments and out-of-pocket costs
• Sort the supports into photos, estimates, invoices, and reports
• Send the full demand packet

Negotiate

• Lead with the presumption that applies
• Don't wait. Property claims can be barred by delay.
• If liability is accepted, negotiate. If not, review for ADR.

Settle

• Review the release
• Receive payment, issue the deductible and client payments
• Final file review, then close

1. Identify

Common scenarios

When maritime law applies

Federal maritime law usually governs when the loss happens on navigable waters and involves traditional maritime activity. Recreational boating counts. Navigable waters include oceans, rivers, the Intracoastal Waterway, and lakes that can be used for interstate commerce. A small lake entirely within one state may fall under state law instead, so confirm which law applies first.

The presumptions that help you

Fault is split by percentage. Maritime law uses pure comparative fault. Each vessel pays its share, even if your client's side was partly at fault.

Responsible parties to consider

• The operator
• The owner, if different, for example for letting an inexperienced person operate the boat
• A rental company, marina, or storage operator
• The employer, for a commercial vessel
• The manufacturer or service company, for a mechanical failure

2. Rented watercraft: jet skis and pontoons

When a renter damages a jet ski or pontoon, the rental company's insurer pays for the repair and pursues the renter.

The rental agreement is your main document. Look for:

• The renter's promise to pay for damage during the rental period
• A damage waiver. Many rental companies sell one that caps the renter's cost at a set amount. Check its exclusions, which commonly include alcohol, reckless operation, leaving the allowed area, towing, or letting an unlisted person drive. If an exclusion applies, the cap usually doesn't.
• The pre-rental checklist and photos, which prove the craft's condition before the rental
• The safety briefing acknowledgment, signed by the renter
• The listed operators, their ages, and any required boater education cards

Where the money comes from

• The renter directly. Renters are often uninsured for this, so direct demands and payment plans are common.
• The renter's own boat or jet ski policy, which may cover rented watercraft
• The renter's homeowner's policy. Many limit or exclude watercraft liability, especially for rented or larger watercraft, so check the policy language before assuming there's coverage.
• A security deposit or card hold, when the rental agreement allows it

When the rental company shares the blame

Expect the renter to argue the rental company caused the loss, with a poorly maintained craft, a mechanical failure, or no real safety briefing. Some states require rental companies to give specific instructions before renting. Get the rental company's maintenance logs and briefing records before sending the demand.

3. Notify and investigate

Get the boating accident report. Under federal rules, the operator must file a report with the state boating authority when damage to vessels and other property totals $2,000 or more, a vessel is lost, or someone is hurt. Property-damage reports are due within 10 days. Request it from the state wildlife or natural resources agency, and get any marine patrol, sheriff, or Coast Guard report too.

Who to put on notice

• The operator and the owner
• Their boat insurer. Recreational boat policies usually carry their own liability coverage, separate from homeowner's.
• The marina, storage operator, or rental company, if involved
• The manufacturer or service company, for a mechanical failure

Evidence checklist

• Boating accident report and any marine patrol or Coast Guard report
• Each vessel's hull identification number (HIN), state registration number, owner, operator, and insurance
• Photos and video of the vessels and the damaged dock or structure
• Witness names and statements
• Marina and dock camera video
• GPS and chartplotter track data showing speed and course
• Weather, wind, current, and visibility at the time, plus whether navigation lights were on at night
• Any boating-under-the-influence citation
• For rentals: the rental agreement, damage waiver, checklist, briefing acknowledgment, and maintenance logs

Use a marine surveyor. A surveyor documents the damage, the repair cost, and the vessel's value. The value of the other boat after the accident matters because of the Limitation Act trap in the next section. Hold a joint inspection of the vessels before repairs.

4. Demand, negotiate, and settle

Liability theories

• General maritime negligence, supported by the Oregon, Louisiana, or Pennsylvania Rule where they fit
• Negligent entrustment against an owner who let an unfit person operate the boat
• Breach of the rental agreement, for rentals
• Product liability, for mechanical failures

The Limitation Act trap

Under the federal Limitation of Liability Act, a vessel owner can ask a federal court to cap their liability at the vessel's value after the accident. For a wrecked jet ski or a sunk boat, that value can be close to nothing.

• The owner has six months from the first written notice of a claim to file for limitation. Your demand letter can start that clock.
• The owner can't limit if they knew about or took part in the negligence. An owner who was driving the boat usually has that knowledge, which is your best answer.
• A 2022 amendment removed certain small passenger vessels from the Act. Recreational owners have still used it.
• If an owner files, all claims get consolidated in federal court on a strict deadline. Get counsel involved right away.

Time limits

Maritime personal injury claims have a three-year statute of limitations. Property damage claims are governed by laches, meaning an unreasonable delay that harms the other side. Courts often look to the state's statute of limitations as a guide, so don't count on more time than the state allows. When state law applies instead, the state's deadline controls.

Defenses to expect

Negotiating and settling

Marine insurers are specialists and know these rules well. Lead with the presumption that applies. Review the release with the release checklist, then close with the standard closing letter.

5. Letters for this loss

Sources

• An introduction to maritime law presumptions (Liskow & Lewis)
• The Limitation Act in the United States (National Law Review)
• 46 U.S.C. 30529, action by owner for limitation
• United States time bars for maritime claims (UK P&I Club)
• 33 CFR 173.55, boating accident reports (Cornell LII)
• Admiralty law for pleasure boats and jet skis (Bluestein)