Buying Yacht Insurance

How to purchase Yacht Insurance

Yacht ownership requires that the person secure a level of insurance in order to minimize the cost of repairs and loss on the yacht should an emergency occur. When seeking insurance, it is recommended that you find out what type of insurance you need and how much insurance that you need. If you have never insured a yacht before, here is what you should know when buying yacht insurance.

Do I really need yacht insurance?

Most states require you to have a level of insurance on a yacht. Yet, even if this was not the case, it would make sense to insure your vessel. Per the U.S. Coast Guard Statistics there were over 4,000 boating accidents in 2014 which resulted in over $39 million dollars worth of damage.

What are the types of Yacht insurance?

Yachts are typically considered to be any vessel which is over 40’ in length. As such, this gives a rather broad scope of the vessels which could fall into the yacht category. Yacht insurance may be referred to as boat insurance for the smaller vessels. Yet, the larger yachts and the motor yachts may (depending upon who you use for insurance) have specialized coverage for yachts. Either way, the typical coverage which will be offered for your yacht will include, liability, damage, fuel spill liability, medical, salvage and wreck removal, boat replacement, towing, personal property, hurricane haul out, ice/freezing coverage, and uninsured boater coverage.

Does damage insurance cover all damages?

Damage insurance may not cover all the damage which could occur to your yacht. There are various types of damage coverage including hull, sail, machinery, furnishings, motor, equipment and electronics, and personal property damage. Plans which omit any of these items will not be insured and you will need to pay for such damages and loss. Additionally, damage insurance such as Hurricane damage insurance may limit the amount of replacement and compensation given to yachts which are docked/marinade in a high risk zone. Check with your insurer for details on the coverage.,

Does homeowners insurance cover my Yacht?

Again, this is dependent upon the size of the boat and the policy which is in place with your home owners insurance. While you may have basic boat insurance under the homeowner’s policy, there may be stipulations to where the boat is only covered when on your personal property. Additionally, homeowner’s policies may restrict the overall L.O.A covered by the policy or the overall weight of the vessel that is insured. It is always best to have a separate Yacht policy to ensure that you are fully covered.

How can I calculate the cost of my insurance?

While you could wait on a quote from the insurance agency, there is a means of calculating the cost of your insurance. Take the overall market value of the boat and estimate the insurance at 2% of the current market value. For example, if you have a yacht which is worth $1.2 million dollars the insurance would be 24k. This is not a definitive price but rather a guide to help you estimate the overall cost. Other factors such as the boat age, the LOA, the Speed and horsepower, your credit and standing with the insurance company, your location, and the intended use of the Yacht will also be factors which could cause the cost of insurance to fluctuate.

Where to find yacht insurance?

There are a few options which are available when seeking yacht insurance. The first option is to acquire the insurance through a local company. This could be problematic as yachts tend to exceed the purchase and coverage limitations of smaller companies. The second option is to use a well-known insurance company. This is only effective if you understand all the terms and the types of boating and yacht insurance on the market. Of course, the downside to this is that you do not get a competitive rate in most cases (especially if there is only one major insurer in the area). Additionally, it is quite easy to get befuddled with the jargon and terminology used in the insurance world.

The best option for purchasing yacht insurance is to use a broker to find the best options. Our yacht brokerage company would love to help you in acquiring the proper insurance for your yacht. Our firm will listen to the needs that you have for coverage and then present you with the best options available. Since we have years of experience in the yachting industry, we can offer you assistance and guidance in determining the specific needs for your vessel based upon the model, usage, and risks commonly associated with your type of yacht.

To find out more about insuring your yacht through Vessel Vendor, or if you have any questions about our yacht brokerage services, please call 561-600-5006 to speak with an experienced yacht broker or use the contact us form.