Yacht & Crew Insurance: Key Questions Answered

Yacht insurance is a specialized marine insurance policy designed to protect your yacht against risks such as physical damage, theft, liability, and certain emergencies while on the water or in storage.

Coverage varies by policy, but most yacht insurance plans include:

  • Hull & Machinery Coverage – Damage to the yacht itself
  • Liability Coverage (P&I)– Injury or property damage to others
  • Personal Effects Coverage – Belongings onboard
  • Medical Payments – Injuries to you or passengers
  • Uninsured Boater Coverage – Protection if another boater lacks insurance
  • Towing & Assistance – Emergency towing and breakdown support

It depends on your location and circumstances. While not always legally required, marinas, lenders, and charter companies often require proof of insurance before docking, financing, or chartering a yacht.

  • Premiums depend on several factors:
  • Yacht value and size
  • Type (sailing yacht, motor yacht, catamaran)
  • Age and condition
  • Navigation area
  • Claims history
  • Owner’s boating experience

Generally, annual premiums range from 1% to 5% of the yacht’s insured value.

Many policies cover storm damage, but some may:

  • Require higher deductibles for named storms
  • Exclude certain high-risk regions during hurricane season
  • Require a hurricane preparedness plan
  • Always review your policy details carefully.

If you hire professional crew, you may need:

  • Crew Medical Insurance (the yacht insurance may require it)
  • Crew Liability Insurance (usually included under the yacht’s liability insurance)

Yes, most comprehensive yacht insurance P&I policies include salvage and wreck removal costs, which can be substantial after a serious incident.

A wreck removal certificate is issued by the flag state after submission of the wreck removal coverage to the flag state.

Navigation limits define the specific geographic boundaries where the yacht is covered. Coverage may
be limited to:

  • Inland waters
  • Coastal waters
  • International cruising regions
  • Sailing outside your approved territory may void coverage unless pre-approved.

Key Aspects of Navigational Limits:

  • Seasonal Restrictions:
  • Coverage may be restricted or excluded during high-risk times, such as hurricane season.
  • Breach of Warranty:
  • Operating outside these limits is a breach of contract, which can lead to claims being denied.

Coverage Extensions:

If you plan to travel outside your coverage limits, you can often obtain a temporary endorsement from your insurer to maintain coverage.

Risk Management:

Limits are set based on the yacht’s size, type, and the risk level of the location

If you finance your yacht, the lender technically has a financial stake in the boat until it’s fully paid off. To protect that investment, lenders typically require:

  • Hull coverage for the full agreed value or loan amount
  • Liability coverage, often with a minimum limit.
  • The lender listed as a loss payee on the policy
  • Proof of insurance before releasing funds

Without meeting these requirements, the loan usually won’t be approved or finalized.

Marinas and yacht clubs require insurance mainly to reduce their own liability exposure. They commonly require:

  • Protection & Indemnity (liability) coverage
  • Minimum liability limits
  • Proof of coverage before issuing a slip agreement

This protects the marina if your yacht causes damage to docks, other
boats, or results in injury.

Even if yacht insurance isn’t legally required in your area, it is often
practically mandatory due to marina rules.

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Typically, insurers request:

  • Completed quote form/application
  • Vessel survey (especially for older yachts)
  • Proof of ownership
  • Captain’s CV
  • Prior claims history
  • Current registration
  • Shop the insurance
  • Choosing higher deductibles
  • Maintaining a clean claims history
  • Storing the yacht in secure marina

Common exclusions may include:

  • Normal wear and tear
  • Lack of maintenance
  • Marine life damage (sometimes excluded)
  • Intentional acts
  • War and nuclear risks
  • Always review exclusions carefully.

If an incident occurs:

  • Ensure safety of passengers and crew
  • Notify authorities if required
  • Document damage with photos
  • Contact your insurer immediately
  • Prompt reporting helps speed up the claims process.

Agreed Value: You and the insurer agree on the yacht’s value upfront. In
case of total loss, you receive that agreed amount.

Actual Cash Value (ACV): The payout is based on the yacht’s depreciated
market value at the time of loss.

Agreed value policies typically cost more but offer more predictable
payouts.