Question:
“We insure an elderly gentleman who has recently had some health problems. He lives alone, and his son wants to buy him a golf cart, so he can drive to visit friends in the neighborhood, and also to the nearby shopping center on occasion. His son is also one of our insureds, and he has asked us if his father’s Homeowners Policy covered the liability. They’re not concerned about insuring the vehicle itself – just the liability, due to the father’s assets. We get different answers from different people. What do you think?”
Answer:
Golf carts have certainly gained wide usage far beyond the golf course, and assisting those with limited mobility has proven meaningful to so many people. And golf carts are just one of the numerous types of vehicles available today which can people with restricted mobility. The ISO Homeowners Policy provides coverage for various types of non-auto vehicles, including golf carts, recreational (off-road) vehicles, handicap-assist vehicles, and service vehicles. But each category of vehicles has its own specific limitations and restrictions, which can be confusing.
For the discussion which follows, assume that Jack is the elderly gentleman you insure. As you indicated, we will only address the Section II liability coverages in Jack’s ISO Homeowners Policy for an owned golf cart when used for non-golfing purposes. In addition, included will be some comments on other types of miscellaneous vehicles which Jack might consider. Note that any coverage for liability arising out of these various vehicles is provided through exceptions to the Motor Vehicle Exclusion in Section II.
Golf Carts (and other off-road recreational vehicles)
HO-1991 edition
Section II Exclusion: Motor vehicles & motorized land conveyances
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;
Comments:
An owned golf cart is clearly within the coverage provided under (2)(b) above, as an off-road recreational vehicle. Thus Jack would be covered while operating his owned golf cart on any defined “insured location,” which includes a premises Jack uses in connection with the residence premises. Many experts believe this would provide coverage for Jack while he visits friends in his immediate neighborhood on his golf cart. However, if he takes his owned golf cart off an “insured location,” such as to the nearby store, there is no liability coverage, since (3) above restricts coverage off an insured location only to a golf cart while playing golf.
HO-2000/HO-2011 editions
Section II Exclusion: Motor vehicle liability
A.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";
A.2. If Exclusion A.1. does not apply, there is still no coverage for "motor vehicle liability" unless the "motor vehicle" is:
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:
(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.
Comments:
Under Exclusion A.1. above, when Jack drives his golf cart (or any other motorized land conveyance) on any location that requires registration, his Homeowners Policy excludes coverage. However, under A.2., he is covered while driving his owned golf cart in a private residential community which permits it. While coverage is broader than HO-1991, it still only applies within “a private residential community,” and would not apply while Jack is going elsewhere – such as to the store.
Given that the Section II coverage for owned golf carts is very restrictive, Jack might consider some alternate vehicles.
Handicap-Assist Vehicles
HO-1991 edition:
Section II Exclusion: Motor vehicles & motorized land conveyances
This exclusion does not apply to:
(4) A vehicle or conveyance not subject to motor vehicle registration which is:
(b) Designed for assisting the handicapped;
HO-2000/HO-2011 editions:
Section II Exclusion: Motor vehicle liability
A.2. If Exclusion A.1. does not apply, there is still no coverage for "motor vehicle liability" unless the "motor vehicle" is:
c. Designed to assist the handicapped and, at the time of an "occurrence", it is:
(1) Being used to assist a handicapped person; or
(2) Parked on an "insured location";
Comments:
While at first glance the term “handicap-assist vehicle” suggests a wheelchair, all three editions of the ISO Homeowners Policy discussed above broadly refer to a vehicle which is “designed to assist the handicapped.” This provision was first added in the 1984 edition of the ISO Homeowners Policy, most likely due to the increased use of motorized wheel chairs. The development of lightweight materials, powerful yet compact batteries, and computer technology totally revolutionized motorized wheelchairs into high-tech marvels which have been invaluable to millions of people.
As technology has continued to evolve since then, there are now numerous types of motorized vehicles which are designed to assist people with impaired mobility. Given that the term “handicapped person” is not defined in the coverage form, in addition to which the use of the term has fallen out of favor today, it seems likely that if Jack bought any of these vehicles (often referred to as “personal mobility vehicles – or PMVs”), they would qualify as being “designed to assist the handicapped.” In fact, the marketing materials and TV ads for these vehicles almost universally depict elderly customers with restricted mobility. And available options include oxygen holder, forearm crutch holder, and cane clip holder.
There is a potential conflict between the PMVs – which are specifically designed to assist restricted-mobility customers who want to travel outdoors – and the broader category of off-road recreational vehicles, such as ATVs, etc. For example, Pride Mobility Products Corp. makes a PMV called the Pursuit XL, which is clearly designed for outdoor use by its restricted-mobility customers. Are they “handicapped,” making the vehicles within the broad coverage afforded such vehicles? This vehicle is quite different from other all-terrain vehicles such as the John Deere Gator, which are designed for full-bore, rugged off-road use. This distinction is important, since owned off-road recreational vehicles have limited coverage in the Homeowners Policy, based on location used, while those vehicles which are “designed to assist the handicapped” are not similarly restricted in coverage, as discussed above.
Another issue is comparing PVMs to golf carts. An important coverage advantage these personal mobility vehicles have over golf carts is that there is no restriction for usage based on premises or location. Therefore, if Jack is using any vehicle “designed to assist the handicapped,” coverage should apply while Jack is visiting neighbors, or going to the nearby store. Even though Jack might use a golf cart because of mobility issues, since it isn’t “designed to assist the handicapped,” coverage under his Homeowners Policy is quite restrictive.
Recommendations
Given the potential for conflicting interpretations of coverage provided by the unendorsed Homeowners Policy, it is imperative that the agency understand each insurer’s available coverage for the wide assortment of non-auto vehicles in use today. Some insurers use ISO-type Homeowners endorsements for “low power motorized vehicles,” while others offer specialty policies for specific types of off-road vehicles.
Last Updated: June 19, 2013