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Yacht insurance

First of all why do you need boat insurance?

It’s a fair enough question and whilst it is not a legal requirement on many waters, having appropriate cover does make sound financial sense. Marine mortgage companies for instance insist on compulsory insurance as part of their money lending process. However, there are two stand-out reasons why boat insurance is not a ‘would like to have’ but a ‘must have’:

  1. Firstly you have to protect your capital investment against loss or damage which ultimately could result in a large and costly repair bill if the worst were to happen!


  1. Secondly having adequate boat insurance can help to protect you against any third party liability for injury or damage caused by you or your vessel.

Boat Insurance premium considerations

Many factors are used to set the cost of a policy, and they vary among insurers. Here are some items to consider:

  • Cruising Area: Where your yacht is based, and where you will cruise
  • Boating Safety Education: If you have been formally trained or certified.
  • Good Driving Records: Both boating and driving.
  • Liability Limits: The higher the limit the higher the cost.
  • Deductible: The higher the deductible the lower the premium.

Understanding Yacht Insurance

  • Some companies specialize in providing coverage for antique and classic boats. You can choose between an actual cash value or agreed value policy. The former is cheaper but factors in depreciation and market value, so your payout will be less. Some policies include discounts based on your boating education, safety features, and whether you have a hybrid or electric boat. Some companies also offer a package deal that decreases the rate on a yacht insurance policy if you purchase additional policies, such as for your home or car.
  • Boats are defined as vessels under 197 feet long, while ships are 197 feet long or longer. While there is no agreed upon length for a yacht, generally they are considered to be at least 20 feet long. A vessel under that size is a pleasure boat. For its own purposes, the National Boat Owners Association marks the dividing line at 27 feet. Most yacht coverage is broader and more specialized than pleasure boat coverage, because larger vessels travel farther and are exposed to greater risks