This kind of an exclusion in an auto policy was held to be against public policy in New Jersey, because its compulsory auto law mandated that claims brought by members of the named insured's household may not be excluded from coverage. In the absence of a legislative mandate requiring liability insurance coverage for boat owners, the court said, it may not establish a corresponding public policy in this case. The court therefore ruled that because the wife was an insured, her claim was not covered. It is interesting to note that in the dissenting opinion of one justice, a passing comment was made that one of the reasons the plaintiff was unaware of the exclusion was that he was not advised of it by his insurance agent who sold him the policy. Unless the agent serves as a consultant for clients, the agent should not have the obligation to inform clients what the policy covers and does not cover.
Many courts appear to rule that way, but there are exceptions.
For those enterprising producers who have newsletters or other sources of communication with their clients and want to advise about boatowner liability insurance problems, the subject of this article is ideal. What must be kept in mind by boat owners is that they may not have coverage under their policies when they are injured by negligent operators, whether or not the operators are family members even though coverage may apply in similar circumstances involving the use of autos. These exclusions, furthermore, are not necessarily found in the exclusions sections of policies. Finally, while a growing number of boatowners policies include these exclusions, some still do not. But based on underwriting discretion, an exclusion may find its way onto the policy by way of an endorsement.