Yacht Insurance - Why Bother With It?

It's not cheap, yacht insurance. Is it worth taking the risk yourself, and doing without it? After all, in some countries it's not even a legal requirement.

But it makes a great deal of sense to have it, and here's four good reasons why...

1. Even though your boat may be small and relatively low in value, in the event of a collision it can do a great deal of damage to a much larger and more expensive vessel. If you're blamed for the collision, then you'll be responsible for the costs of repairs to the third-party boat and be similarly liable for other claims related to the incident.

2. You need to protect your investment. Lose it or damage it and, without insurance, you may not be able to replace or repair it.

3. Not being insured will restrict your use of the boat in other ways. You certainly won't be able to keep her in a marina or boatyard without a reasonable level of 3rd Party Insurance. It will also be a requirement if you want to keep her on a local authority or commercial mooring.

4. Take your boat overseas and one of the first things the Customs & Immigration officials will want to see is a valid Insurance Certificate. If you don't have one you'll find yourself in a spot of bother.

So yes, whatever the size and value of your boat or the extent of your cruising ambitions, you do need yacht insurance in one form or another.

What Risks Should You Want Covered?

Standard Risks

You'll certainly want accidental damage to equipment such as the hull, sails, spars, rigging, machinery, furnishings, on-board systems and personal effects.

Similarly, loss or damage resulting from fire, frost, theft and malicious damage, sinking, stranding, collisions and salvage costs should be covered under the policy.

Hauling out and launching is another activity you'll want to be covered for - and if you have a tender and outboard motor you may want to insure those too.

Trailer-sailors will also need trailer insurance and cover for transit risks.

That should be fine for sailboats that don't stray from far from their local cruising area, but many of us can't resist a peep over the horizon from time to time...

Special Risks

Another set of risks apply to long distance sailors, relating in particular to the areas in which they intend to sail and the seasons in which they'll have their boats in those locations.

For example, if you're basing your boat in the Caribbean - either in commission or laid-up ashore - you'll need hurricane insurance unless you're prepared to carry this substantial risk yourself.

And if you persist in sailing where there is a proven risk of piracy, you may have difficulty in getting any kind of yacht insurance cover at all.

Finding a Yacht Insurance Company

Damage caused to boats ashore in Grenada (West Indies) by Hurricane Ivan in 2004

When you really need to know that your Yacht Insurance Company will meet its contractual obligations!

Most of us choose to get our sailboat insurance through a specialist insurance broker rather than going direct to the insurance provider.

An internet search will find you a number to choose from. Getting a quote is a quick and easy process; just fill out their form and submit it online. It's tempting to accept the cheapest quotation you get - and that could be a very expensive mistake.

It's absolutely essential to review:-

Those risks you are covered for, and

Those that you're not covered for - the exclusions.

And read the small print - the terms and conditions.

It's now time for a chat with the broker to make sure you know exactly what you're getting - and what you're not.

Ask a number of 'what if' questions for scenarios that either aren't clear in the policy or you want reassurance on, eg:

What if I have to abandon the boat in mid-ocean?

What if my boat is eaten from the inside out by an infestation of termites?

What if the boat falls off her props while stored in a boatyard?

What if the boat gets damaged during a race?

What if the boat gets damaged or broken into while on a mooring?

What if a latent defect in her construction causes a failure resulting in loss or damage?

What if I lend or charter my boat to a third party who collides with another vessel, or puts her on the rocks etc, etc?

What if the boat is dismasted at sea and I have to cut the rig away?

What if the anchor drags and the boat ends up on the shore?

What if .....?

You might not like the answer in every case, but it's always better to know where you stand.

And finally...

There's just one more thing to do before you sign up, and it's probably the most important step of all.

How will the broker/insurer perform in the event of a claim?

Some years ago our boat 'Alacazam' was badly damaged by hurricane Ivan while stored ashore in Grenada, West Indies. Upwards of 100 boats were knocked over when this category 5 monster swept through the boatyard.

Fortunately we were insured through a reputable broker who provided an outstanding service in getting her properly repaired and back in commission.

Other boat owners were not so lucky, having to fight for every dollar from their insurers, who were seemingly intent on wriggling out of their contractual obligations wherever they could.

Ask around. Past history and reputation is everything.

Next - Sailing Travel Insurance...