Your gorgeous yacht probably didn’t come cheap. So, it goes without saying that choosing the right yacht insurance coverage matters. Before setting sail, here’s a list of things to consider when picking out the right plan for you.
An Overview: Yacht Insurance
Yacht insurance is more specialized than boat and waterfront coverage since larger vessels are exposed to greater risks. What you’ll pay for your policy depends on various factors, from boating history to the age of your ship. When picking out your coverage, you’ll first need to know what’s generally included with basic yacht insurance coverage. Keep in mind that some Yacht Insurance policies are written on “free form” Ocean Marine policies. This means that the insurance company can write whatever they want into the policy–unlike standard insurance policies for home or umbrella. As always, Individual policies may vary significantly, please check your policy or speak with your agent to discuss coverage.
What It Covers:
- It includes liability coverage for bodily injury or damage to the property of others and damage to personal property on the vessel.
- Depending on the company, coverage may include gas delivery, towing, and assistance if your yacht gets stranded.
What It Doesn’t:
- Wear and tear or gradual deterioration
- Marine life, marring
- Damage such as denting, scratching, animal damage, osmosis, and blistering
- Any manufacturer’s defects or defects in design
- Ice and freezing
What Factors Determine the Rate:
- The year, make, model
- Hull value
- Recent marine survey
- Mooring location
- Navigable waters
- Operators (personal or captain and crew)
- Usage of the vessel (pleasure or charter)
- Hurricane risk
- Prior Claim history
- Deductible and liability limits
1. Total Loss Settlement
One of the most significant factors to consider in deciding between the two types of damage coverage:
- Actual cash value pays the value of your yacht at the time of the damage, and the insurance company will determine its market value, providing your vessel gets destroyed.
- Agreed amount value Offers broader coverage and generally costs more. If your boat is destroyed, your insurer pays you an amount you already agreed on before signing the policy.
2. Navigational Territory
Yachts are massive vessels that have different navigational limits outlined by each company. If you decide to venture outside the territory you agreed to in your policy; you could lose your coverage. If taking your yacht on a trip outside of the navigational territory, you can contact your insurance company for special trip consideration at and additional cost. It is best to have the planned trip added at the inception of your policy or upon policy renewal.
If taking your yacht on a trip outside of the navigational territory, you can contact your insurance company for special trip consideration–however this can be costly. It is usually wise to have this added at the inception of your policy or on renewal.
3. Boating Experience
Do you have experience operating a large boat? Underwriters often factor in your boating experience and sometimes even your driving record when determining how much your policy will cost. If you do plan to captain your own yacht, you’ll need to be listed as a covered operator on the policy.
In the market for high-value homeowner insurance or auto insurance? Often companies will offer a “bundle” discount, which allows you to add on other policies in exchange for a reduced rate on your yacht coverage.
5. Supplemental Coverage
Not all insurance plans cover personal property damage and towing & assistance. Supplemental coverage protects you when unexpected breakdowns occur or if expensive accessories like fishing equipment or GPS get stolen or lost.
6. Lay-up Period
Most companies usually offer a discount during the off-season or “lay-up period,” temporarily pushing pause on your coverage when boats are typically inactive. But if you dare to take your boat for a spontaneous joy ride around mid-December, your boat won’t be covered, and your provider might drop you from the policy.
7. Liability Coverage
Liability coverage allows you to customize your policy with features such as legal defense costs, wreck removal, oil pollution, and contamination clean-up. Even though most policies include the Jones Act coverage—aimed at protecting the yacht’s crew—it’s essential to ensure its included in your policy. If not, any losses accrued will cost you a hefty penalty, upwards of six figures.
Last year there were 5,265 recreational boating accidents resulting in 767 deaths, 3,191 injuries, and approximately 62.5 million dollars of damage to property. Customizing your yacht insurance coverage to include add-on features may cost more, but ultimately, it could make a world of difference in getting the peace of mind you need when setting sail on new waters.
As always, Individual policies may vary significantly. We recommend reviewing your policy with a licensed insurance agent to discuss your current coverage. The state licensed insurance advisors at Coastal Insurance Solutions will review your existing coverage and make recommendations based on your unique needs.
Get a Free Quote for Yacht Insurance Coverage!
Whether you need yacht insurance, high-value homeowner insurance, or umbrella insurance, we can help! Coastal Insurance provides comprehensive insurance coverage tailored to your own unique, individual lifestyle. We partner with the industry’s leading insurance companies making it easy to compare dozens of plans so you can get personalized coverage at the best rates.
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About the Author
David W. Clausen is the CEO of Coastal Insurance Solutions. With over 20 years’ experience and over 1 billion insured, David and Coastal Insurance Solutions are the recognized leaders in high net worth insurance. For the third consecutive year, David Clausen has been awarded Top Producer by Insurance Business America . David is a trusted high net worth insurance expert who’s published more than 200 articles. His articles & press releases have generated over 500K pageviews and has been featured on blogs such as Google News, Yahoo Finance, CNBC, Market Watch, Fox, The New York Times, etc. David founded Coastal Insurance Solutions in 2001 after earning a BBA from the State University of New York College at Oswego.