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What is Yacht Insurance
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Yacht insurance is an insurance policy that provides indemnity liability coverage on pleasure boats. Yacht insurance includes liability for bodily injury or damage to the property of others and damage to personal property on the boat. Depending on the insurance provider, this insurance could also include gas delivery, towing and assistance if your boat gets stranded.
Understanding Yacht Insurance
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Some companies specialize in providing coverage for antique and classic boats. Policy holders can choose between an actual cash value or agreed value policy. Some policies include discounts based on a policy holders' boating education, boat safety features or whether they have a hybrid or electric boat. Some companies also offer a package deal where they decrease the rate on a yacht insurance policy if the holder purchases additional policies for their homes or automobiles.
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Typically, "boats" are considered to be 26 feet and smaller, and "yachts" are 27 feet and larger. Most yacht coverage is broader and more specialized because larger boats travel further and have more unique risk exposures.
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A yacht insurance deductible, the amount of money you must pay out of your own pocket before your insurance kicks in, is usually a percentage of the insured value, for instance a 1 percent deductible means a boat insured for $100,000 would have a $1,000 deductible. Most lenders allow a maximum deductible of 2 percent of the insured value.
Generally, most yacht insurance policies exclude wear and tear, gradual deterioration, marine life, marring, denting, scratching, animal damage, osmosis, blistering, electrolysis, manufacturer's defects, defects in design, and ice and freezing.
Two Parts of Yacht Insurance
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There are two primary sections of a yacht insurance policy. First, hull insurance is an all-risk direct damage coverage that includes an agreed amount of hull coverage, meaning all parties agree at the time the policy is written on the value of the vessel and the value will be paid out in a total loss. A true yacht policy also includes replacement cost (new for old) coverage on partial losses, with the exception of sails, canvas, batteries, outboards and sometimes outdrives, which are depreciated.
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Protection and indemnity insurance is the broadest of all liability coverages, and because maritime law is unique, you will need coverages that are designed for those exposures. Such things as Harborworkers and Longshoreman's coverage and Jones Act (crew) coverage can be critical, as an uncovered loss in this area could run into hundreds of thousands of dollars. Besides providing payment of judgments against you, P&I also provides for your defense in Admiralty Courts.
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