What is ‘Yacht Insurance’?

Yacht insurance is an insurance policy dedicated to insuring personal pleasure boats. It may include coverage for any bodily damage to the yacht and damage to other personal property on the vessel. Yacht insurance coverage may also include gas services, towing and assistance, in case the yacht gets stranded somewhere.

People have few misconceptions regarding a boat and a yacht. It’s very easy for us to differentiate between a truck and an SUV.

But the thing might get complicated when you consider boats and yachts. Fortunately, there are several clear differences between them in insurance terms.

So, let us understand the similarities and differences between boat insurance and yacht insurance, first:

 a. Insurance type Boat Insurance Yacht Insurance
b. What is it? Vessel that is within 26 feet Vessel that is over 26 feet
c. Is there only 1 type?   No, types include – Antique boats, fishing boats, speed boats (for racing), personal tour boats, etc. Yes
e. What is the duration of coverage? Mostly annual Mostly annual
f. Are navigational areas defined?
  • Limit on the area mentioned by the insurer on an agreed value
  • Have to pay extra to add on
  • Customized navigational area
  • Policy premium depends on the area
g. What is included under a basic policy? Include any physical damage to the boat, liability, coverage for personal property, and coverage while towing Include any physical damage to the boat, liability, coverage for personal property, and coverage while towing
h. Is there any extra coverage?
  • May not include extra coverage for an uninsured/underinsured boater or coverage for fuel spills
  • Have to pay extra for addon benefits
  • More customized or specialized – include hurricane protection, and an option to extend or create a custom navigation area
  • Usually extra benefits added without extra charge – fuel spill coverage, towing, personal property coverage, etc.
  • Addon coverage – Dinghy attached to yacht covered if length within 16 feet
i. Does the policy cover the vessel outside water?
  • Does not cover the vessel outside water
  • Auto insurance may cover damages depending on your plan
  • Homeowners insurance may cover a part of the boat if included in the policy
  • Covers the vessel even if it is outside the water only if you opt for extended umbrella policy
  • Homeowners insurance doesn’t cover

Yacht insurance policy – Components

Yachts are mostly operative with a horsepower ranging from 100 and above. There are specific limits and exclusions where your yacht can travel.

The basic components of a yacht policy are:

  • Protection coverage against all risk for the boat itself.
  • Liability and uninsured boaters liability coverage. It may include damages to others or their property.
  • Coverage for permanently attached pieces or machines like anchors, sails, oars, canvas, batteries, outboards, outdrives, and life jackets.
  • Specialized coverage for special items and removable personal property, like navigation equipment.
  • Special benefits such as towing and assistance. It may be helpful to shift the vessel into land if the yacht becomes immobile.
  • Damage coverage for losses due to wear and tear. This may include corrosion or rot.
  • Extended cruising coverage for people who decide to leave the country.
The insurance company will include these benefits in your yacht insurance policy after considering several factors of the yacht. These are:

  • Area of sailing
  • Length of the yacht
  • Age of the yacht
  • Total value (in dollars) of the vessel
  • Technical measurements like motor capacity (horsepower), motor speed, and motor type (inboard, outboard), performance, etc.

If you live in a hurricane zone, make sure you get the extra coverage from the insurance company.

The policy will indicate the details about where the yacht can be if a hurricane approaches the normal harbor.

If you don’t follow the instructed policy plan, it could make you yacht ineligible for all the coverage.

Is yacht insurance necessary?

The main reason why you must buy a yacht insurance is that the yacht isn’t covered by a homeowner’s insurance policy.

Homeowner’s insurance may cover a small watercraft, for example – a sailboat or a paddle boat. Larger vessels with expensive attachments and parts require bigger insurance.

So, getting a yacht insurance properly will protect you if any issue arises.

So, know your policy better before you opt for it.

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