Insuring your Yacht what you need to know

Owning a yacht and sailing is a great experience. After making a purchase you have dreamed of, a brand new beautiful yacht, you need to think about its insurance.

First of all, you have to know what kind of vessel falls under yacht insurance. If your vessel is over 26 feet, it’s considered a yacht for insurance purposes. Most cruisers, sailboats and sport fishing vessels are comprised by this heading.

Secondly, decide which coverage is best for you. There are two main coverage yacht insurance policies have to offer: hull coverage protection for your property and Protection and Indemnity liability protection.

Hull coverage defrays you yacht repair in covered peril such as fire, theft, vandalism, lightning or windstorm. Your policy should include coverage for machinery
machinery, outboard motors, spars and sails, equipment, apparel and furniture. As for dinghy and trailer, many companies automatically cover dinghies that are less than 16 feet and 25 h.p. The amount that a company will pay you in case of total loss is stated on the policy as “agreed value”. Usually the agreed value is re-evaluated every three years and decreases as you yacht ages. As for deductible for hull coverage, the more you are willing to pay as your deductible, the lower your insurance premium. When selecting the deductible on your policy, consider how much premium you could save by choosing a higher deductible amount.

Protection and Indemnity is similar to the liability protection you get as part of your ownership coverage. It will protect you if you are legally responsible for damages to property or injury to someone other than yourself or a family member. For example, if you are sued as a result of hitting another yacht, this kind of coverage will protect you. You can get Protection and Indemnity coverage only if you have hull coverage. This coverage does not have deductibles as part of the policy. You may include additional coverage in your Protection and Indemnity policy. For example, Uninsured Boat Coverage pays for injuries that you are supposed to recover from the owner of uninsured boat in case of accident.

Thirdly, decide whether you need additional low-cost coverage such as Hurricane Protection Endorsement and Optional Fishing equipment. And finally, make sure you have been given information on warranties or limits of your yacht insurance policy. For example, most companies require that you use a yacht for recreational activities only. If you are planning to start yacht business such as chartering the coverage cost will be higher.