Yacht Insurance Policies
Yacht insurance companies have a free hand to write exclusionary wording as they see fit. The coverages, and more importantly, exclusions vary greatly from policy to policy. Is vessel damage due to hitting a whale covered? If my boat sinks at the dock due to a through hull failure am I covered? Can I can loan my boat to a friend and still have coverage? Is my boat covered for the Agreed Value described on the policy Declarations Page or a depreciated amount? The answer to all of these questions and many others is the same – maybe yes, maybe no. It all depends on the boat insurance policy contract wording.
Let us explain all the possibilities you have with your boat insurance policy based on your vessel conditions.
Some policies contain a “Marine Life Exclusion” so hull or drive train damage from hitting a whale or large fish may not be covered.
Most policies exclude damage due to “Wear and Tear”, Corrosion, and Gradual Deterioration”. Sinking due to a through hull failure, non-functioning automatic bilge pump, leaky shaft log, etc. may not be covered.
Some policies have “Named Operator” or “Crew Warranties” that restrict who can operate the insured vessel. It is important to ask your broker if your policy includes these restrictions.
Premiums vary greatly depending on weather conditions, navigational hazards, and availability of repair facilities in various areas around the U.S. and around the world. It is important for insurance companies to know how many boats they insure in a given marina and harbor so that they can monitor their exposure in the event of a catastrophe i.e. marina fire or hurricane.
If a friend brings along snacks, and drinks am I at risk of losing my coverage? If a vessel owner accepts remuneration in exchange for being aboard the yacht, it can constitute a violation of the “Private Pleasure Warranty” resulting in a policy that is null and void.
It is best to check with your agent, but generally speaking if a guest brings food, drinks, pays money, or provides any other compensation as a requirement to be aboard your vessel, then your policy is in jeopardy.
Some policies provide “Actual Cash Value” coverage not “Agreed Value” coverage. This means the insurance company will settle a total loss to your vessel based on their opinion as to the current value of the yacht and NOT an Agreed Value described on your policy Declarations Page.
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