Yacht Insurance, Not Just “Insurance for Boat”

Yachts and larger vessels require a different insurance for boats than smaller pleasure crafts, larger vessels have unique needs to be taken into consideration. While ski boats, fishing boats and pontoons are used for leisure activities, there is no comparison between them and yachts. Proper yacht insurance coverage is important to insure yachts locally and offshore without running the risk of being underinsured.

yachtYachts as a classification are vessels that measure at least 27 feet in length while boats are 26 feet or under. Although smaller yachts may have many of the same needs as smaller ski boats, fishing boats, and pontoons larger vessels have many differences.

Here are some important considerations for selecting yacht insurance rather than getting insurance for boat:

Appropriate navigation limits – Insurance for boat policies will allow for different exposures for navigation limits. It is common for boats to be permitted unlimited transport on land by trailer. Yacht insurance coverage in contrast, is more typically restricted to shorter distances for trailering.

Agreed value policies – It is more prudent to opt for agreed value rather than actual cash value for yacht insurance in particular. Actual cash costs less for policy rates, but that is because any claim will include depreciation considerations and market value when determining any payout. In contrast, agreed value will cover what it costs to replace the vessel. There are certain elements that can be excluded from the agreed value assessment, such as cushions or covers.

Deductibles – Boat policies traditionally offer a flat rate for the deductible in the event a claim is made. Yacht policies, however, are frequently variable depending on the type of loss. It could, for example, be a deductible of three percent for damage to the hull and more for a total loss.

Liability coverage – Yachts by their very size and navigation have more potential risk than smaller pleasure boats so it makes sense that boat coverage would not be broad enough to fully protect a yacht. Insurance for yachts offers broader coverage designed to offer full coverage for liability. Yacht owners need to consider the need for liability coverage for guests on board as well as crew, who under the federal law known as the Jones Act can sue for damages suffered while working. Unlike boat policy coverage with its general liability protection, yacht coverage will also extend to liability to remove wreckage – typically with higher coverage under protection and indemnity. The way in which yacht policies offer protection for salvage varies and may be a set dollar amount or a percentage.