A yacht is not just a luxury item to be had or a recreational vessel for sailing enthusiasts. It’s also a significant investment. Your yacht should be a prized possession that deserves the best protection.
Proper insurance coverage is crucial; ensuring that your yacht is adequately insured is one of the key components of ownership. Among the various insurance options available for yachts, hull insurance is one of the most important.
The difference between yacht hull insurance and, for example, a multi-risk policy is the scope of coverage. Yacht hull insurance provides coverage specifically for damage to a vessel. At the same time, a multi-risk policy is a more general insurance policy that covers a wide range of potential risks.
Also, all marinas and ports require yacht owners to have third-party liability insurance coverage to use their facilities.
Yacht hull insurance, or comprehensive insurance, covers damage to a yacht or boat’s physical structure (hull) and its equipment and accessories. It usually covers damage caused by accidents or natural disasters, such as fire, theft and malicious acts.
Why is hull insurance necessary, and what does it cover?
Hull insurance for yachts is essential because it protects your investment, your vessel, from risks and losses that may occur, such as damage to the hull, engine, or other physical parts of the vessel, including machinery and equipment.
The cost of yacht hull insurance depends on several factors, such as the size and value of the yacht, the location where it sails, and the amount of coverage you want.
What is the difference between yacht hull insurance and yacht liability insurance?
Hull insurance covers damage to the yacht itself. In contrast, liability insurance covers damage or injury caused to other people or vessels.
What exactly does the hull insurance policy include?
Yacht Pool’s hull insurance covers the following risks, among others:
- Navigation risk – refers to potential loss or damages that may occur during regular navigation, such as collisions, grounding or capsizing.
- Natural disasters – refer to damage caused by fire, explosion, severe weather and earthquake. Fire and explosion coverage provides protection against fire damage and possible resulting explosions. Meanwhile, severe weather coverage provides protection against damage caused by storms, such as lightning, high winds and hail.
- Theft – theft on board coverage provides protection against theft or loss of personal belongings stored on the yacht. Boat theft insurance, on the other side, covers the theft of the vessel or any of its parts.
- Malicious acts – covers damage caused by intentional acts of vandalism or sabotage by third parties.
- Transportation – protects the yacht during transport, e.g., from and to the dry dock.
- Equipment damage – covers the damage to the yacht’s equipment and accessories, such as electronic navigation devices, fishing gear and dinghies.
- Damage to the sails – covers damage to the sails and rigging of the yacht and all extra sails, if previously agreed upon.
Some other significant facts about Yacht Pool’s hull insurance are that there is no deductible (in case of a total loss) and that our clients receive free assistance even if no damage occurs.
A typical yacht insurance policy may have a deductible that the policyholder must pay in case of a claim. However, some Yacht Pool hull insurance policies may offer the option of no deductible in the event of a total loss. In the event of a total loss to the yacht, the policyholder would not have to pay for any portion.
These benefits can provide yacht owners with added value and peace of mind, even if they never have to file a claim. Remember that no policies offer coverage for gross negligence.
What is gross negligence?
Gross negligence in yacht insurance refers to intentional or reckless conduct that leads to damages or loss. It’s often a coverage exclusion in yacht insurance policies, meaning that the insurance company will not provide coverage for loss or damage that results from gross negligence.
For example, suppose the person operating the yacht intentionally steers the vessel into a pier or ignores obvious weather warnings, causing damage to the yacht. In this case, this could be considered gross negligence and would not be covered by the insurance policy.
Gross negligence in navigation refers to a reckless disregard for the safety of a vessel, its crew and other vessels. It involves intentional or willful acts of omission or commission that endanger life and property. Examples include operating a yacht under the influence of drugs or alcohol, improper equipment maintenance, and disregarding navigation rules and regulations.
Various countries have enacted laws and regulations to clarify the concept of gross negligence. As a result, marine insurance policies now often contain extensive details and require the client to sign to acknowledge that they have read and agreed to all the terms.
What are deductibles?
A deductible is a standard component of many hull insurance policies for yachts. It’s the portion of a loss or claims the policyholder is responsible for paying. The insurance company covers the remaining amount of the damage or claim up to the limits stated in the policy.
For example, if the policy provides for a $1,000 deductible and the total loss is $10,000, the insurance company will pay $9,000, and the policyholder will be responsible for paying the $1,000 deductible.
The deductible amount can vary depending on the policy and insurance company. Policyholders can often choose a higher or lower deductible to affect the premium. A higher deductible usually results in a lower premium, while a lower deductible results in a higher premium.
Understanding the deductible amount and how it works in a yacht insurance policy context is essential. This helps policyholders make informed decisions about their coverage and determine an appropriate amount to pay in case of a claim.
Does hull insurance include coverage during a regatta?
It’s important to know that hull insurance coverage is in effect during the entirety of a sailing regatta, including any training sessions leading up to the competition. This means that the insurance will cover any losses or damages during these activities, subject to the terms and conditions outlined in the policy.
However, the insurance policy expressly excludes coverage for any damages or losses resulting from using a motorboat in sports events aimed at achieving the highest average speeds or exercises for such events. This exclusion applies to any activities that involve using a motorboat for speed-based competitions or training purposes, which are not related to a “proper” sailing regatta.
In essence, the insurance policy will not cover you if you use a motorboat to participate in a speed-based competition or training event and subsequently cause damage or loss.
How is my yacht protected in storage and during transportation?
One of the most asked questions is whether insurance covers the vessel while it is stored on a dry dock and while in transport.
The hull insurance policy covers the usual stay of the vessel while in the dry dock, which also includes extracting it from the water and launching it back into the water.
It’s important to note that this coverage only applies if the services are provided by a registered company. If an unregistered company or an individual does the extraction or launching process, the insurance policy will not cover any damages that may occur.
Having a yacht hull insurance policy is not just a good idea or a way to protect your investment – it’s essential. By having a yacht hull insurance policy, you can ensure that you are protected against financial losses that could result from an unexpected event, navigational risks, theft and such. It also provides you with peace of mind.
We advise you to do proper research, compare insurance policies, and select the one that best meets your needs to protect your yacht against unforeseen events.
As this may be a complicated process, don’t hesitate to contact us.
