Yacht insurance is a specialized type of insurance policy that provides coverage for sailing vessels. This includes indemnity liability coverage for bodily injury or damage to the property of others and protection for personal property aboard the yacht. Depending on the insurance provider, additional services like gas delivery, towing, and assistance for stranded yachts may also be included.
Key Benefits of Yacht Insurance
- Boasts indemnity liability coverage for sailing vessels.
- Comprises two primary parts: hull insurance and protection and indemnity (P&I) insurance.
- Although definitions can vary, yachts are typically between 27 and 30 feet in length.
Navigate the Essentials of Yacht Insurance
Some companies focus on providing coverage for antique and classic boats, offering policies that cater to different valuation needs, including actual cash value and agreed value policies. The actual cash value policy considers depreciation and market value, resulting in potentially lower payout, whereas agreed value policies provide a set amount without considering depreciation.
Policies sometimes offer discounts based on boating education, safety features, and eco-friendliness. Additionally, package deals might be available, lowering rates when bundled with other insurance like home or car insurance.
The classification of maritime vessels also plays a role. Vessels under 197 feet are considered boats, while those over are ships. Generally, vessels around 30 feet and longer are labeled as yachts, whereas those under 27 feet are typically categorized as pleasure boats.
Yacht-specific insurance is inherently broader and more specialized than pleasure boat insurance, reflecting the larger travel range and higher associated risks. Marked by the National Boat Owners Association, yachts typically have a dividing line at 27 feet.
A typical yacht insurance deductible is a percentage of the insured value - for instance, a 1% deductible on a $100,000 yacht would be $1,000. Most lenders generally cap the deductible at 2% of the insured value.
Coverage often excludes items like wear and tear, marine life, marring, denting, animal damage, and manufacturing defects, to name a few.
Two Pillars of Yacht Insurance Coverage
Hull Insurance
Hull insurance provides robust all-risk, direct damage coverage and includes an agreed amount set upon policy inception. This would be the amount paid out in the case of total loss. Partial losses might be subject to depreciation on items like sails, canvas, batteries, and some outboards and outdrives.
Protection and Indemnity (P&I) Insurance
Protection and indemnity (P&I) insurance deliver the broadest liability coverage in maritime law. This coverage is vital for exposures specific to yachting, including longshore and harbor workers’ coverage and Jones Act insurance for the crew. Such coverage ensures extensive protection since losses can reach significant amounts. P&I covers judgments and defense in admiralty courts.
Related Terms: Liability Insurance, Actual Cash Value, Agreed Value, Replacement Cost, Jones Act, Admiralty Courts.
References
- Insurance Information Institute. “Boat insurance and safety: Boat insurance coverage”.
- National Boat Owners Association (NBOA). “The Best Yacht Insurance Rates”.
- DiscoverBoating.com. “Boat Insurance Guide: Insurance Discounts”.
- Malhotra Insurance. “Watercraft and Boat Insurance: Is There a Difference?”
- U.S. Government Publishing Office. “Coast Guard, DOT”.
- DiscoverBoating.com. “Boat Insurance Guide: Boat Insurance Coverage FAQs: What is a normal deductible?”
- Absolute Insurance of Palm Beach County, Inc. “Yacht Insurance”.
- International Marine Underwriters. “Commercial Hull and P&I”.
- DiscoverBoating.com. “Boat Insurance Guide: Boat Insurance Coverage FAQs: What should I look for in a yacht policy?”
- Gallagher Charter Lakes. “Protection & Indemnity Insurance – What is it???”
