Yacht Insurance FAQ
Most people understand the importance of having insurance – to ensure that you are covered in the event of a loss. Homeowners and auto insurance policies are very common and several insurance companies have similar coverage. However, boat and yacht insurance coverage varies and has different requirements than what most people are used to with their homeowner’s or auto policy. That’s why we have come up with some helpful information to introduce you to Yacht andBoat Insurance.
Please note that this list is intended to provide general information and not to provide or interpret the actual terms and conditions of any insurance policy. Each policy is different, so be sure to check your policy to determine what coverage you have or give us a call at Oversea Insurance Agency at 619.222.1111.
What are the basic sections of a boat or yacht insurance policy?
What is the difference between Agreed Value and Actual Cash Value?
What are some other standard yacht insurance coverages?
Are there any additional coverages on my policy?
What may NOT be covered in a yacht/boat insurance policy?
A boat or yacht insurance policy has two main sections: the Physical Damage and the Liability section.
1.) The Physical Damage section covers accidental losses or damages to the boat and its machinery. This will usually also include the sails and equipment necessary to operate the boat.
2.) The Liability Section covers your legal obligations to third parties. This section may be called Protection and Indemnity on your policy. Liability coverage covers third party bodily injuries, loss of life, or property damage to third party property resulting from the ownership or operation of the boat. Liability may also help cover legal defense costs if you are sued as a result of your negligence.
These two types of physical damage coverage are very different; thus, it is crucial to understand and to identify what type of coverage you have on your yacht/boat policy. In the unfortunate event of a total loss, the insurance company will review your policy and determine how you should be compensated based on your coverage.
1.) If you have an Agree Value policy, then you are normally compensated the amount listed on your policy for Physical Damage (the boat value, which is usually the purchase price of the vessel). This is the value that you and the insurance both agreed to have covered. Hence, Agreed Value.
2.) The Actual Cash Value is the replacement costs less any depreciation. In the event of a loss, the insurance company will take into consideration the depreciation of the vessel as well as its condition at the time of loss. Thus, an ACV policy provides less coverage than an Agreed Value Policy. However, the ACV policy could be more economically appealing to an owner, so it is important to discuss this option.
Some standard coverage that many yacht/boat insurance companies include in their policies include medical payments and uninsured boater coverage.
1.) Medical Payments will usually cover first aid treatment, ambulance, costs resulting a person injured on the boat (even if you are found not at fault). The medical coverage could cover accidents occurred while boarding and exiting of the boat as well. The named insured and his/her family can also be covered in some policies.
2.) Uninsured Boater Coverage is similar to uninsured motorists coverage in an auto policy, as it can help protect you from losses boaters who do not have insurance. This also can include hit and run boaters who cause damage to you or your property, since the owner is unknown. Remember that yacht/boat insurance is not always required, so it is a good idea to check if you have Uninsured Boater Coverage on your policy to protect you.
Several policies include the Personal Property and Towing/Assistance coverages. These coverages vary on every policy, so check your policy to see if it includes them and what exactly is covered.
1.) Personal Property will most likely cover items not attached to the boat-or anything you can load or unload. Examples of Personal property (also referred to as Personal Effects) may be clothing, sports equipment, or any personal items.
2.) Towing/Assistance coverage may reimburse you for costs incurred during emergency assistance (and you are and/or your boat are not in immediate danger). Examples of emergency assistance can include: being towed to a location for repairs, fuel delivery, emergency labor. Check your policy or give us a call to determine if Towing/Assistance is included in your policy and your deductible for it.
Most policies list specific exclusions that will not be covered. Some standard exclusions that can be found in many policies include: wear and tear, marine life, manufacturer’s defects, gradual deterioration, and ice and freezing. Not sure what exclusions are listed on your policy? Your policy should address each exclusion or you can give us a call and we’d be happy to explain them to you (619.222.1111).
Have more questions? Please give us call at 619.222.1111 or email us at firstname.lastname@example.org
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