Yacht Insurance: Know The Pitfalls!

Yacht insurance policies are different for every yacht owner. There is no "one size fits all" solution like with home or car insurance. So buying yacht insurance is quite a bit more daunting to research for coverage and price. While we all hope that insurance is something that we will never need to use, we expect the policy we choose to either fix the yacht or to be fairly compensated when needed. However, from our own experience and according to a recent BoatUS report, you may not be entitled to a payout with some common types of claims. In this article we will discuss the most common things to look out for when choosing your insurance.

Before the closing of your yacht purchase, your lender will require you to have insurance on your vessel. If you are buying a pre-owned yacht, the lender will generally require a survey to use to establish base coverage from the value and replacement value reported on the survey. As a very general rule, the annual premium for private yacht use coverage is 1.5% - 2% of the declared hull value. So, a $100,000 yacht will cost $1,500 to $2,000 per year to cover for Florida-Bahamas "private" use. However, this can vary from region to region. Yachts in charter will typically be covered under a "fleet" policy with preferential rates that differ from company to company.