Three sailboards, sailboard equipment and several other items of personal property were in a car that was stolen from a shopping mall parking lot. The car was recovered minus the personal items.

The owner's homeowners insurer paid for the loss of the miscellaneous personal property, but denied coverage for the sailboards and their related equipment. Denial was based on an exclusion, pertinent to personal property, for " . . . loss caused by theft that occurs away from the premises of . . . watercraft of all types, including their furnishings, equipment and outboard motors."

The insured sued the insurer to recover for his loss of the sailboards and their related equipment. The trial court concluded that sailboards, being intended for transportation on water, qualified as watercraft and, accordingly, were excluded from coverage by virtue of the pertinent exclusion. The insured appealed from judgment in favor of the insurance company.

The appeal court focused on the definition of "watercraft," and whether sailboards conformed to it. As the term was not defined in the policy, the court turned to Webster's Third New International Dictionary 2582 (unabridged ed. 1993) for its plain meaning, " . . . the understanding of the ordinary insurance purchaser." The dictionary defined "watercraft" as a "boat, ship; equipment for water transport; vessels . . . "

The court found that sailboards were watercraft, as "their sole purpose is to move people around on water." The insured had argued that the term "includes only traditional boats and ships, not 'water toys' used solely for recreational purposes."

The appeal court determined that a broader meaning than that asserted by the insured was intended by the policy language. The pertinent exclusion applied not simply to "watercraft," but to "watercraft of all types . . . " The court concluded that the term was unambiguous and that sailboards were within its scope.

The judgment of the trial court was affirmed in favor of the insurer and against the insured. (SMITH, Appellant v. STATE FARM FIRE & CASUALTY COMPANY, Respondent. Oregon Court of Appeals. Nos. 94C-816435; CA A88964. November 13, 1996. CCH 1996 Fire and Casualty Cases, Paragraph 5889.)