Yacht Insurance Buying Guide – Common Questions Answered


A yacht is an investment worth protecting. There are many considerations when selecting a yacht insurance company or plan. Exploring answers to common questions can give yacht owners valuable insight into yacht insurance. 

Yacht insurance is a changing market, and with so many extreme weather events in the last several years, finding appropriate coverage is important. A thorough understanding of factors that influence the current yacht insurance market can help ensure your success in finding the perfect policy for your needs. 

What Does Insurance Cover?

Coverage for yachts can vary. With no regulations or governing bodies to guide insurance plans, and there is no baseline expectation or absolute. At the base level, there are two types of must-have coverage for your yacht: Hull insurance and Protection and Indemnity. Underwriters customize protection and Indemnity plans to cover maritime risks associated with your particular vessel. Generally, the Protection and Indemnity plans are your liability insurance. Endorsements that can be customized for your yacht include international waters, lay-up insurance, piracy, and more. 

What Factors Influence Insurance?

Factors such as the length of your boat, location, and ownership experience will influence your yacht insurance. Vessels less than 27 feet are generally referred to as a pleasure craft. Over that is a yacht. Being located on the coast or inland can affect your insurance policy. Storage is a significant factor; underwriters often want frequent communication when a yacht is onshore and about plans to return it to water.

You can ensure your yacht for the actual cash value or the agreed-upon value. Actual cash value will pay out the replacement cost of your yacht minus any depreciation. Adding an agreed-upon value clause is done by submitting a signed statement. Once accepted and agreed upon, the payout for your policy is then the amount within the statement. Actual cash value generally lowers the premiums. With the increasing number of extreme weather events has yacht insurance companies very cautious. Insurance brokers are becoming more diligent and active in reviewing applications. The location of your yacht, captain resume, and management company can influence your ability to be insured. 

In short,each yacht insurance company will offer unique yacht policies. Be sure to thoroughly review each policy to make sure it addresses your needs. New yacht owners may want to explore yacht insurance before purchasing a yacht to ensure policies provide the necessary coverage.