Is Yacht Insurance Really Necessary? (2024)

FAQs

Is Yacht Insurance Really Necessary? ›

Boats are a significant investment. Without a good insurance policy, it can be expensive to deal with the damages in the event of an unexpected repair or accident. The right insurance also protects you if someone gets injured while riding in or operating your boat.

Without enough liability coverage, you put your passengers' and your own life savings at risk. Although forgoing boat insurance may not be illegal in your state, it may be required by your bank or lending institution (if you lease or finance your boat) or your marina (if you rent a dock or boat slip).

Boat insurance isn't legally required in Florida, but that doesn't make it ok for Florida boaters to skip coverage. If it would be painful to replace your boat out-of-pocket, you should probably insure it. Homeowners insurance probably doesn't cover your boat or the resulting medical bills if anyone is injured.

Hull value loss (physical loss or damage) coverage provides protection from direct, accidental physical loss or damage from external causes while your watercraft is afloat, ashore and in transit. Although subject to certain exclusions, hull value coverage ranges from $5,000 to $750,000.

More recent estimates in 2023 and 2024 put average costs of boat insurance somewhere between $300-$600/year for most boaters. However, real world costs can vary, and it is not uncommon for larger yachts to cost upwards of 5-6% of the total valuation of the vessel for the year.

Typically, a yacht insurance policy will not cover regular wear and tear, mold damage, animal or insect damage, or malfunctioning or broken machinery. Coverage for personal property and unattached equipment like fishing gear may also be limited or excluded completely.

The disadvantages of marine insurance include: Cost: premiums for marine insurance can be relatively high, especially if the insured vessels or cargo operate in high-risk areas, or if there's a history of claims. Complexity of policies: may include various conditions, exclusions, and deductibles.

On average, boat insurance in Florida amounts to approximately $652 per year, which is higher than the average annual policy cost of $344 in medium-cost states and $263 in low-cost states.

Boats can be covered under a homeowners policy, but there are often limitations on the size and value, typically no more than $1,000 or $2,000. While this coverage is ideal for small, nonmotorized boats, such as canoes and kayaks, it's not enough for larger or motorized boats.

Progressive is our top boat insurance recommendation for its low average prices and a wide variety of coverage options. Markel offers the best boat insurance coverage options out of the providers we've reviewed.

What is the deductible for yacht insurance? ›

1% of the boat value or $250 is generally the minimum deductible available. Insurance companies give a discount in premium if you agree to a deductible higher than the minimum. The savings in premium varies per company. Normally the largest percentage of savings comes between the $250 and $500 (1% and 2%) deductibles.

Boat insurance policies cover smaller vessels under 26 feet in length, and they offer more basic coverages than yacht insurance policies. Because yachts are large, valuable vessels that tend to travel further than boats, yacht coverage typically contains higher limits and more specialized coverages.

What does boat insurance not cover? Boat insurance generally won't cover maintenance or general wear and tear, including gradual weathering and deterioration, insect damage, mold, or damage from animals or marine life.

Hull and machinery coverage

Hull insurance will cover any physical injury to your boat, including motors, trailers and equipment, and even accessories in many instances. Damage from wind and fire are typical claim types.

Please understand everything is variable based on those decisions plus the age of your yacht. Owners can expect to spend about 10-15% of the purchase price annually on operating and maintaining a yacht. That's $1-1.5 million a year for a $10 million yacht.

The depreciation of a yacht depends entirely on the maintenance it receives. If a yacht is kept in pristine condition from the moment of purchase, it probably won't go down too much in price if you resell it in five years. This doesn't mean that your yacht will always be worth nearly what you paid for it.

It provides essential financial protection, ensuring ship owners can navigate unforeseen events without incurring significant financial losses. Marine Cargo Insurance: Essential for cargo owners, marine cargo insurance protects against mishandling risks during handling or voyages.

Comprehensive coverage protects your watercraft against damages from events outside of your control, including theft and vandalism, explosions, and fire, falling trees and objects, hurricanes, lightning, and other weather-related issues.

The number crunchers know that boats over 20, 30, maybe 40 years old, depending on who you ask, are prime loss centers—so many insurers won't cover them. You'll have to look harder for coverage.