The very name — yacht — evokes a Gatsby-esque image of wealth and elegance. If you don’t have one yourself, you may have daydreamed about flitting to and from exotic ports of call, sunlight glinting diamonds off the tops of gentle swells and dockside parties at night. If you do have one, your thoughts are likely more practical, like making sure that it doesn’t sink or run into anything — and that it’s properly insured in case it ever does.
From Stem to Stern
Pretty much anything that floats, from the most humble canoe to a cruise liner to an aircraft carrier, is a boat. All yachts are boats, yes, but not all boats are yachts. While there’s no universally agreed-upon definition, recreational (noncommercial) boats longer than about 35 feet with sleeping accommodations are generally considered yachts.
According to the U.S. Coast Guard, of the roughly 11 million boats registered in the U.S. in 2017, about 83,000 were longer than 40 feet. There are “ordinary” yachts, typically less than 100 feet; yachts over 100 feet; and “super” and “mega” yachts that can range up to 400 feet or more in length. In case you’re pricing one, a rule of thumb says superyachts will run you about $1 million per yard.
For those with less extravagant tastes (and budgets), a new 40-foot yacht can range from a bit over $500,000 to well over $1 million, depending on amenities, finishes and options. Used yachts, however, can be found in all price ranges varying by make, materials, age and condition. It’s not uncommon for a $150,000 used yacht to have a replacement value of $1 million or more. Along with the lower price, however, can come a higher level of difficulty in obtaining insurance.
All these things factor into the cost — and sometimes challenges — of obtaining appropriate insurance.
Find the Coverage That Floats Your Boat
There are three broad categories of marine policies. Generally, the least expensive will be liability only. These typically cover damage done by an owner to someone else’s property (collision with another boat, a dock or other property). Coverage for fines for an oil spill (which are considerable and can also include criminal charges in some cases) is often charged at an additional rate.
Next are actual cash value policies that will pay a yacht owner an amount equal to the “actual cash value” of a boat at the time of the loss. However, this amount may be far less than the owner paid for the boat due to depreciation.
Then there are agreed value policies. The owner and the insurer agree on the value of the boat, and that’s the amount paid out in the event of a total loss.
Within these broad categories are several options and add-ons. These include uninsured boater coverage, towing, coverage for the theft or loss of personal effects and so on. And for larger yachts registered in the U.S. that have part-time or full-time crew members, there are liabilities similar to workmen’s compensation created by the Jones Act, a federal maritime law.
These Factors Can Make Waves in Your Coverage Needs
Before you set sail, consider whether any of these factors will impact your yacht insurance needs.
· Navigation limits. Where you’re allowed to use your yacht is important. The least expensive is usually “inland waters,” meaning lakes, rivers and the Intracoastal Waterway. Next comes “coastal waters.” From there, the yacht’s navigation area is defined by region, such as the Caribbean, California and Mexico, Mediterranean and latitude/longitude.
· Hurricanes. Many yacht policies require their owners to move their yachts outside of the “hurricane belt” — generally north of Georgia and south of the Caribbean — during hurricane season.
· Charters. If you intend to charter your boat to guests, your policy will dictate whether or not you can charter and how many charters are allowed.
· Crews. If you employ crew members, you will need accident and injury coverage.
· Security. Yachts can and do get stolen and disappear. As with your car and home, a good security system can reduce insurance rates. Yachts that navigate in certain areas are also vulnerable to attack by criminals on the high seas.
A yacht is more than transportation — it’s a lifestyle. Our experienced agents can help you navigate the tricky waters of marine insurance to find the right coverage for your yacht and your situation at the best price. We Insure your caviar dreams.
The information contained in this page is provided for general informational purposes only and may not be applicable to all situations. WeInsure makes no guarantees of results from the use of this information.