To begin, let's look at types of insurable "toys": Motorcycles, Boats, Recreational Vehicles, Dune Buggies and Sandrails, All Terrain Vehicles, Side-By-Side Utility Vehicles, Modified Golf Carts, Golf Carts, Snowmobiles, Collector Vehicles, Travel Trailers and Personal Watercraft.
Why do all of these vehicle types need their own individual insurance coverage? Any vehicle issued a state registration needs to be properly insured. All 50 states have adopted the required minimum liability insurance requirements. In Arizona, the minimum liability limits are 15/30/10. Insurance is not designed to have one policy meet all vehicle needs. If you need a screwdriver you do not buy a hammer. Vehicle insurance is no different. A motorcycle policy is not designed to cover the insurance needs of a boat.
What makes these vehicle's insurance coverage requirements different from auto insurance? Insurance for automobiles is rated on several factors such as garaging zip code, daily usage, one way miles to work, new and current value, number of liable accidents your specific automobile is involved in, the state you live in, and your own personal driving history (tickets and accidents).
Insurance for "toys" is primarily based on usage and value. Example, a highly 'customized' Harley-Davidson has an increased premium for physical damage (Comprehensive and Collision) because to replace the 'custom' paint and accessories cost more that the factory stock accessories. The liability is the same amount no matter the increased value of the motorcycle. Motorcycles are the exception to the daily usage factor because some are used as a daily commuter vehicle.
Another example, street legal sandrails can sell for over $100,000 directly from the manufacturer. Again the liability is based on the frequency of accidents that particular vehicle is involved in over the past 5 years or more and the average dollar amount paid out. Where the majority of premium is derived from is value, the amount the insurance company is responsible to pay out in a total loss. In this case, the insured value is $100,000. The usage of the vehicle is obvious, it is not going to be used as someone's daily commuter vehicle so garaging zip code, one way miles, rural or urban residence are not substantial factors used in determining the premium. However, without these factors, insurance companies have a harder chore determining a competitive yet profitable premium.
Let's take a look at boats and factors involved with determining their rates. Boat insurance is based on 3 independent items: hull, motor, and trailer. All three items are value based premium determination because each can be destroyed independent of the other two. The motor is the largest rating factor for liability because that is what causes the accidents. All boat insurers want to know the horsepower and maximum m.p.h. the motor is capable of obtaining.
The larger the motor the faster the boat goes which creates difficulty in handling and increases chance of a liable accident which have direct consequences in the rate. Sailboats with in board diesel motors also fall into this rating category but, because the horsepower and typical usage of the vessel is sail power, liability for sailboats is obviously much lower than power boats. The hull rate is based almost solely on new and/or current value same with the trailer. Base rates for a 25' performance ski boat are much higher than base rates for a 25' day cruiser sailboat due to the handling differences of under power versus under sail.