New Safety Law Could Spell Trouble for Florida Boat Rental Industry

In a major blow to the Florida boat rental industry, a new safety law slated to go into effect on January 1st could have dire consequences for rental companies across the state. The law mandates that boat rental companies must provide insurance coverage for customers renting their boats, a requirement that insurance companies are resisting. Without insurers on board, rental operators fear that the cost of insurance premiums could skyrocket, potentially forcing them out of business. Miami’s rental boat industry, in particular, is expected to be hit hard by the new law, with industry sources reporting that most insurers in Florida refuse to insure renters. As the deadline approaches, all eyes are on whether insurers will come around or if the legislature will make amendments in the next session. Otherwise, Florida’s waterways could be left significantly emptier come 2023.

New Safety Law Could Spell Trouble for Florida Boat Rental Industry

Background Information

In an effort to enhance safety in Florida’s waters, the new Boating Safety Act was passed during the latest legislative session. However, this law includes a provision that may have unintended consequences for the state’s boat and jet ski rental companies. Starting from January 1, boat rental companies will be required to carry insurance for their customers in case of injury or loss. This change has raised concerns among industry experts and insurance companies, as it could potentially cripple the boat rental industry if insurers do not come on board or if the law is not amended in the next session.

Impact of New Safety Law

The introduction of the new safety law has created uncertainty for the boat rental industry in Florida. With the insurance requirement for customers, rental companies are facing potential consequences that could affect their operations and the waterways. The industry is concerned that this law, as currently written, could significantly impact their ability to operate and may even lead to a decline in the number of boats available for rental.

Insurance Requirement

Under the new safety law, boat rental companies will be mandated to carry insurance coverage for customers who rent their boats. This requirement aims to provide financial protection in case of accidents or damages during the rental period. However, many insurance companies have expressed reluctance to provide coverage for renters, raising concerns about the availability and affordability of insurance options for boat rental companies.

Challenges for Boat Rental Companies

The insurance requirement imposed by the new safety law presents several challenges for boat rental companies. Firstly, it adds an additional financial burden to their operations, as they will now have to secure insurance coverage for their customers. This could lead to an increase in operating costs and potentially impact the profitability of rental businesses. Moreover, the potential increase in insurance rates could make it unaffordable for some rental companies to obtain coverage, leading to financial strain and potential layoffs.

Potential Cost Increase

Industry experts estimate that the implementation of the new safety law could lead to a significant increase in insurance costs for boat rental companies. Currently, the average cost is around $1,500 per boat annually. However, some insurers predict that this could rise to over $8,000 per boat, which would have a substantial financial impact on rental businesses. The projected rate increase is worrisome for boat rental companies, as it could make it financially unviable for them to continue operating.

Risks for Miami’s Rental Boat Industry

Miami’s rental boat industry is particularly at risk due to the new safety law. As one of the major hubs for boat rentals in the state, Miami-based rental operators may face unique challenges and threats to their businesses. The location and potential expansion plans of rental operators like Riva Motorsports in Miami and Key Largo could be severely hindered by the insurance requirement, leading to potential layoffs and a halt in business growth.

Concerns of Rental Operator Riva Motorsports

In a letter addressed to the Florida Fish and Wildlife Conservation Commission (FWC), Joe Bamdas, the Vice President of Riva Motorsports, expressed concerns about the new safety law. Bamdas stated that the rental operator may be unable to obtain affordable insurance or, if they can, the cost will be prohibitively high, making it impossible for them to remain in business. This highlights the potential negative consequences for boat rental companies and their employees as a result of the new law.

Compliance Rules and Enforcement Approach

The FWC recently approved compliance rules for the new safety law, outlining the expectations for boat rental companies regarding insurance coverage for customers. The FWC hopes that new insurers will step forward and provide affordable options for boat rental businesses. In terms of enforcement, the FWC plans to take an educational approach for the first six months of 2023. Violators will be educated and warned about the new laws in order to promote compliance and safety.

Legislative Amendments

Given the concerns raised by boat rental companies and industry experts, there is a possibility of legislative amendments to address the issues posed by the new safety law. The boat rental industry is hopeful that the legislature will consider amending the law in the next session to provide relief and ensure the sustainability of rental businesses.

Crackdown on Illegal Boat Charters

It’s important to note that the new safety law also includes provisions to crack down on illegal boat charters. The legislation requires additional training and education for rental operators, aiming to improve boater safety by addressing potential risks and ensuring proper knowledge of boating regulations. This aspect of the law has been positively received by the National Marine Manufacturers Association and is seen as a step forward in enhancing overall boater safety in Florida.

Positive Effects on Boater Safety

Despite concerns and potential challenges for the boat rental industry, the new safety law has the potential to significantly improve boater safety in Florida. By enforcing compliance and raising awareness about safety regulations, the law aims to reduce accidents and incidents on the water. The National Marine Manufacturers Association recognizes the positive impact that the majority of the law will have in improving boater safety, making it a crucial step forward for Florida’s waters.

In conclusion, while the new safety law in Florida has good intentions to enhance boater safety, its implementation has raised concerns for the boat rental industry. The insurance requirement and potential cost increase pose significant challenges for rental companies, particularly in Miami. With the uncertainty surrounding insurance availability and affordability, there is a risk of business closures, layoffs, and a decline in the number of boats available for rental. The boat rental industry is hopeful for legislative amendments to address these concerns and ensure the sustainability of their businesses. Despite the challenges, the new safety law also demonstrates a commitment to crack down on illegal boat charters and promote boater safety, which is a positive step for Florida’s waters.