Yacht Insurance Basics

What you should know before purchasing Yacht Insurance.

The insurance you purchase with United Marine Underwriters is determined by the type of vessel you have. Most yacht insurance programs are designed to insure boats greater than 26 feet in length. If your vessel is less than 26 feet, it is generally considered a boat.

Yacht insurance can include coverage for physical damage, accidental or damage as a result of collision, fire, windstorm, lightning, theft or vandalism and would provide for the repair of your yacht. This broad coverage includes not only the yacht boat but its machinery, auxiliary equipment, outboard motors, trailers, and personal property.

Physical damage coverage can be based on an Actual Cash Value (ACV) or an Agreed Amount Value. Actual Cash Value and Agreed Amount Value both provide important coverage for your boat but are significantly different in function.

Actual Cash Value policies provide for the replacement costs of your loss less depreciation. In the event of a total loss, price guides for used boats and other resources will be used to approximate the market value of your boat. Partial losses are settled by taking the total costs of the repair less a percentage for depreciation.

Agreed Amount Value policies are policies where you and United Marine Underwriters have agreed on a value of your boat and in the event of a total loss you would be paid the agreed amount. In the event of a partial loss, an Agreed Amount Value policy will replace damaged items for new. Most Agreed Amount Value policies require actual cash value on damaged property such as sails, protective covers, batteries, dinghies, trailers, and aged outboard motors, lower drive units or outdrives.

Here is an example of the difference between Actual Cash Value and Agreed Amount Value, considering $10,000 damage on a 4 year old outdrive:

A deductible is usually required for physical damage coverage. Additionally, the boat and motor usually have the same deductible while the trailer and personal effects have additional deductibles. The deductible is the amount you are willing to pay in case of a loss. The amount of deductible you pay is higher or lower depending on your premium. Deductibles for boat policies are usually calculated as a percentage of your coverage or can be flat amounts of $250 or $500.

Personal Effects coverage should also be a part of any good boat insurance policy. Items such as cameras, cellular phones, stereos, radios, and portable TVs are items that are not part of the normal operation of your boat and should be included in personal effects coverage of your boat insurance policy.

Protection and Indemnity (P & I)

Yacht insurance Protection and Indemnity provides protection if you are legally responsible for damages to property or injury to someone other than yourself or a member of your family. P & I can protect you in the event you are sued as a result of hitting another yacht or vessel or if someone is hurt onboard your yacht due to your negligence.

Jones Act Coverage

If you employ a captain or crew, make sure your P & I includes Jones Act coverage. Jones Act coverage is a form of maritime worker’s compensation coverage that protects you in the event one of your crew members is injured.

Medical Payments

Medical payments coverage provides protection for reasonable medical, ambulance, and hospital costs should someone be injured while in, on, boarding or leaving your boat.

Uninsured Boat Owners Coverage

Uninsured Boat Owners coverage on your boat insurance policy provides coverage for injuries suffered as a result of an accident with an uninsured boat or a “hit-and-run” boat.

Towing

Commercial Towing and Assistance provides reimbursement for reasonable costs of towing if your boat breaks down at sea.

These are just some examples of basic coverage that you should look for when purchasing boat insurance. United Marine Underwriters offers broad coverage at great rates for virtually any type of vessel. Get an instant quote now!

This overview provides general information on boat insurance coverage and is not intended to offer advice on your particular insurance needs or coverage. For specific policy and coverage information contact UMU.

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