Yacht Insurance

Yacht insurance protects owners of larger recreational vessels from financial loss caused by damage to the vessel, liability to others, and certain maritime-specific exposures. Policies are broader and more specialized than standard boat insurance because yachts typically travel farther and face greater risks.

Key takeaways
* Yacht insurance covers hull damage and liability exposures unique to maritime operations.
* Policies are usually split into hull insurance and protection & indemnity (P&I) insurance.
* Coverage choices include actual cash value or agreed value; deductibles are commonly expressed as a percentage of insured value.
* Standard exclusions include wear-and-tear, gradual deterioration, and many forms of animal or weather-related damage.

What yacht insurance covers
* Liability for bodily injury or property damage to others.
* Damage to personal property on board.
* Assistance services such as towing, fuel delivery, or on-water salvage (depending on insurer).
* Legal defense and judgments in maritime/admiralty courts when covered under P&I.

Vessel classification and who needs yacht coverage
* Boats under roughly 27–30 feet are often classified as pleasure boats and carry more limited coverage.
* Yachts generally start in the 27–30 foot range and typically require broader coverage due to longer voyages, additional crew, and higher values.
* Boats are technically defined as vessels under 197 feet; ships are 197 feet and longer.

Policy types and valuation
* Agreed value: Insurer and owner agree on the vessel’s value when the policy is written. In the event of a total loss, that amount is paid in full.
* Actual cash value: Pays current market value after depreciation. Premiums are usually lower, but payouts are reduced by depreciation.

Common discounts and bundling
* Discounts may be available for formal boating education, safety equipment, and environmentally friendly propulsion (hybrid/electric).
* Insurers sometimes offer reduced rates if you bundle yacht coverage with other policies (home, auto, etc.).

Deductibles and lender requirements
* Yacht deductibles are often percentage-based. Example: a 1% deductible on a $100,000 insured value equals $1,000.
* Lenders commonly allow deductibles up to 2% of the insured value.

Typical exclusions
Most yacht policies do not cover:
* Wear and tear or gradual deterioration
* Marring, denting, or scratching
* Animal damage and marine life
* Osmosis, blistering, electrolysis
* Manufacturer’s defects or design flaws
* Ice and freezing damage

Two main parts of a yacht policy
1. Hull insurance
* All-risk, direct damage coverage for the vessel’s hull and equipment.
* Agreed amount usually set at policy inception; total loss triggers full agreed payout.
* Partial losses may be covered on a replacement-cost basis, though some items (sails, batteries, outboards, outdrives) may be subject to depreciation.
2. Protection & Indemnity (P&I)
* Broad liability coverage tailored to maritime law and exposures.
* Covers legal defense and judgments, including admiralty court proceedings.
* May include coverage for longshore and harbor worker claims and Jones Act exposures for crew, which can lead to large losses if not covered.

What to look for when shopping
* Clear definition of covered uses and cruising area limits.
* Agreed value vs actual cash value choice and how partial losses are handled.
* Specifics on crew coverage, Jones Act protections, and legal defense limits.
* Inclusions for towing, fuel delivery, and salvage assistance.
* Deductible structure (percentage vs flat dollar) and lender requirements.
* Policy exclusions and maintenance-related obligations.

Conclusion
Yacht insurance is specialized and more comprehensive than typical boat insurance. Choose coverage that matches your vessel’s size, cruising range, crew arrangements, and replacement expectations. Compare agreed-value and actual-cash-value options, confirm P&I limits for crew and legal defense, and review exclusions carefully to avoid coverage gaps.