yacht definition insurance

Yacht Insurance

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How Does Yacht Insurance Work?

What doesn’t yacht insurance cover, who needs yacht insurance.

Yacht insurance is designed to offer liability and physical damage coverage for boats of 27 feet or more in length. This coverage can apply to incidents resulting in bodily injury or damage to the property of others while the yacht is being operated, and it can also cover certain perils – like fire, theft, vandalism, or wind – that cause damage to the hull, engine, or other attached equipment.

You may also be able to obtain coverage for personal items on board the yacht and for towing after an accident occurs.

Much like car insurance , yacht insurance provides a means to submit claims for damage inflicted upon your boat and any injury or losses inflicted upon third parties. If your policy includes coverage for such incidents, your insurer will offer coverage up to the limitations and provisions stipulated in your policy.

There are two common types of yacht insurance policies, which each dictate how a total loss to the yacht will be settled after a covered peril occurs, subject to the applicable deductible :

• An agreed value policy costs more upfront, but if the yacht is declared a total loss, the insurance company will pay you the value as listed in the policy. This amount is agreed upon between you and the insurer when coverage is selected, and an appraisal or sales receipt may be required as verification. 
• An actual cash value policy considers depreciation and market value, so you'll only receive the worth of the yacht in a total loss settlement. This policy is typically cheaper, but it provides less coverage.

A typical yacht insurance policy's two primary sections are hull insurance and liability insurance .

The hull insurance section of your policy will cover any accidental, physical damage to or loss of your yacht, including its hull, the engine(s), sails, and other attached equipment needed for its operation. Personal property stored on the yacht may also be covered, depending on the specific policy. This coverage will protect both you and the lender if your yacht is financed.

The liability section covers any legal liability you may have to a third party due to the ownership or operation of the yacht, such as for bodily injury, loss of life, or damage to their property.

There may also be coverage for instances other than collision where you cause damage to another yacht. For example, if you fail to yield to a yacht that has the right of way and it subsequently runs into a channel marker to avoid hitting you, you could still be held liable for the damage.

Looking to insure a boat under 27 feet in length or a personal watercraft? Learn about boat owners insurance .

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.

When considering yacht insurance, you should speak to your agent and understand what is and isn't covered by the policy.

Obtaining yacht insurance is typically optional, but it may be advisable to protect your boat and other belongings, yourself, and the people sailing with and around you.

Additionally, many marinas require yacht insurance to use a slip or mooring, and you’ll need a policy if you’re financing your yacht purchase to protect your lender’s financial interest .

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Watercraft Insurance: What It is, How It Works

What Is Watercraft Insurance?

Watercraft insurance is an umbrella term for three types of insurance: boat insurance , yacht insurance , and personal watercraft insurance. It protects against damages to vessels powered by a motor that has a horsepower of at least 25 miles per hour (mph). Examples of the types of costs covered by watercraft insurance policies include physical loss or damage to the boat, theft of the boat, and towing.

Key Takeaways

• Watercraft insurance is an umbrella term for three types of insurance: boat insurance, yacht insurance, and personal watercraft insurance.
• The type of coverage you buy is dictated by the size of your vessel.
• Although watercraft insurance is not required in many states, many boat owners choose to purchase it anyway.
• Boat-loan providers and marinas often require boat owners to have watercraft insurance.

How Watercraft Insurance Works

Depending on the policy, there may also be watercraft liability coverage for bodily injury to people other than the boat’s owner and family, guest passengers using the boat by themselves, and medical payments for injury to the owner and their family. Some policies, however, require the purchase of additional liability coverage as an add-on. The specific type of insurance you buy is dictated by the size of your vessel.

Watercraft insurance is similar to other types of insurance products. In exchange for paying a series of insurance premiums, the policyholder receives protection from certain rare but potentially costly risks. Depending on factors such as the size of the craft, its age, and its intended uses, the premium costs may range from relatively inexpensive to pricey. When underwriting a policy, an insurance company will also consider the policyholder’s track record of previous claims.

Boat Insurance

Any vessel under 197 feet long is considered a boat, while ships are 197 feet or longer. The dividing line between boat and yacht is less settled. Some sources define a yacht as at least 30 feet long. Anything shorter is a pleasure boat. For insurance purposes, the National Boat Owners Association marks the dividing line at 27 feet.

Small craft, such as canoes, rowboats, small sailboats, and powerboats with less than 25 miles-per-hour horsepower may be covered under a standard homeowners or renter’s insurance policy. However, such coverage is unlikely to include liability insurance. Typical boat insurance covers theft; physical damage to the boat itself due to a collision or striking a submerged object; property damage to the boat caused by vandalism, a windstorm, or lightning; and medical payments for injured passengers and the owner and their family. For each coverage, there will be different deductibles, which is how much you must pay out of pocket before your insurance kicks in. Boat insurance will often provide better liability insurance than a homeowners policy, but it is often wise to purchase additional liability coverage as an add-on.

In the event of a total loss, it is important to know whether your policy pays actual cash value (ACV) or agreed value (AV). ACV is cheaper because it only pays for what the boat was worth at the time of the loss, factoring in depreciation and wear and tear on the vessel. AV pays a price that you and your insurer agree upon in advance, an amount that is likely to be closer to the amount you paid for the boat when new.

Other considerations for boat insurance can include:

• Lay-up period —This covers your boat for property damage during the off-season, when it isn’t in the water.
• Navigational territory —Your insurance will generally specify where you can go in your boat and still be covered.
• Property damage —This is for damage your boat inflicts on someone else’s property.
• Hurricane haul-out provisions —This covers your costs of getting the boat out of harm’s way before a windstorm. 
• On-water towing and assistance —This is for unexpected breakdowns or running aground.
• Fuel spill liability protection —Should there be an accidental discharge of fuel from your boat, this will cover the costs of a clean-up.
• Personal effects coverage —This will protect any expensive equipment you have on your boat, such as fishing gear
• Ice and freeze coverage —Should cold weather damage your boat’s engine and water systems, this will pay the bill.

Yacht Insurance

Most yacht coverage is broader and more specialized than pleasure boat coverage because larger vessels travel farther and are exposed to greater risks. It also generally costs more, in part because yachts cost more . In terms of a deductible, it is usually determined as a percentage of the insured value. With a 1% deductible, a boat insured for $175,000 would have a $1,750 deductible. Most lenders allow a maximum deductible of 2% of the insured value.

Generally, yacht insurance coverage does not include wear and tear, gradual deterioration, marine life, marring, denting, scratching, animal damage, osmosis, blistering, electrolysis, manufacturer’s defects, defects in design, and ice and freezing.

There are two main parts of a yacht insurance policy: hull insurance and protection and indemnity (P&I). The first is an all-risk, direct damage coverage that includes an AV for hull coverage, and in the case of a total loss, it will be paid out in full. Replacement cost  coverage on partial losses is also available. However, sails, canvas, batteries, outboards, and sometimes outdrives are usually subject to depreciation instead.

P&I insurance is the broadest of all liability coverages, and because maritime law is particular, you will need coverages that are designed for those exposures. Longshore and harbor workers’ coverage and  Jones Act  coverage (for the yacht’s crew) are included and are important because your losses in these areas could run into six figures. P&I will cover any judgments against you and also pay for your defense in  admiralty courts .

Personal Watercraft Insurance

Personal watercraft insurance is for recreational vehicles such as Jet Skis , Sea-Doos, and Yamaha Wave Runners. These surface-skimming craft can have engines with horsepower anywhere from 60 mph to 310 mph. They usually are not covered by homeowners insurance, and even when they are, the coverage limits are low.

Personal watercraft insurance covers the owner and anyone they allow to use the craft for risks such as:

• Bodily injury to another person
• Bodily injury to you that is caused by an uninsured watercraft operator
• Liability in the form of legal costs if you’re sued due to an accident (which can include water sports liability for things such as waterskiing risks)
• Property damage to another watercraft, a boat, or a dock
• Towing after an accident

Deductibles and liability limits will vary depending upon the policy and the company offering it. You can buy additional coverage for trailers and accessories and, if you own more than one craft, you may be able to bundle your insurance policies for a discount. These pleasure vehicles are easy to use but can also be dangerous, causing thousands of injuries every year, which makes personal watercraft insurance a wise investment.

Watercraft insurance policies may limit the geographic areas in which the boat or watercraft can be operated while maintaining coverage. These often include inland waterways, rivers, and lakes, as well as ocean waters within a certain number of miles from shore.  

Do I Need Watercraft Insurance?

Only a few states make it mandatory for boat owners to obtain watercraft insurance. However, many owners will opt to purchase it regardless, partly because doing so is required in order to obtain a boat loan . Marinas may also require owners to have watercraft insurance as a condition within their rental agreements.

Even if your craft isn’t worth much money, obtaining watercraft insurance is a good idea because of the risk of injury on the water, especially from a collision. Even if you aren’t at fault, you could spend a lot of money in legal fees defending yourself—much more than your insurance premiums. If you do decide to purchase this insurance, make a point of comparing policies from multiple companies before deciding on which is best for you. As with all insurance, the question is what price you put on having peace of mind.

Insurance Information Institute. " I.I.I.: Know Your Boat’s Insurance Coverage from Stem to Stern ." Accessed Feb. 6, 2022.

Westlawn Institute of Marine Technology. " Definitions of: Boat, Yacht, Small Craft, and Related Terms ." Accessed Feb. 6, 2022.

National Boat Owners Association (NBOA). " The Best Yacht Insurance Rates ." Accessed Feb. 6, 2022.

DiscoverBoating.com. " Boat Insurance Guide: Boat Insurance Coverage FAQs: What is a normal deductible? " Accessed Feb. 6, 2022.

National Marine Lenders Association. " Insurance: Large Boats: What’s Not Covered? " Accessed Feb. 6, 2022.

DiscoverBoating.com. " Boat Insurance Guide ." Accessed Feb. 6, 2022.

Boat Owners Association of the United States (BoatUS). " Do I Need Boat Insurance? " Accessed Feb. 6, 2022.

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Yacht Insurance: The Definitive Owner’s Guide

A sailing vessel’s indemnification liability coverage is provided through yacht insurance, and it covers any damage to the yacht’s body, property destruction of others, and private property damage aboard the vessel. This insurance may also cover gas supply, towing, and help if your boat gets stuck, depending on the insurance company.

Understanding The Two Parts of Yacht Insurance

Hull insurance.

Hull insurance is a direct and all-risk insurance policy that covers damage and includes an agreed amount of hull insurance. The amount settlement is done when the policy is drawn up, and the payment is in full in the event of a total loss. In addition, there’s the possibility of replacement costs insurance for partial losses. Still, sails, batteries, canvas outboards, and sometimes outdrives aren’t covered and are instead at risk of depreciation.

Indemnity and protection (P&I)

Protection and indemnity (P&I) insurance provides the most comprehensive insurance coverages for liability. Because maritime law is unique, you must have coverages specifically designed to protect you from risk-taking situations. P&I will cover any judgments against you and pay to defend you in admiralty courts.

What are the factors that can influence your yacht insurance?

Insurers consider many factors when deciding whether to offer a policy.

Almost any vessel can be insured – for a price. You should consider the following to make sure the policy you buy meets your needs:

• Age of the vessel
• Value (make sure you consider depreciation over the years of the value of your yacht)
• Speed/Power
• Type of vessel (Sailing, motor, Inboard, Outboard, utility, cruiser, offshore fishing boat)
• Custom built (boats without serial numbers can be tricky to insure)
• Location of use (which ocean are you planning to locate your boat. Make sure you let your insurance know whenever this changes over the months!)

What does yacht insurance usually cover?

Usually, the yacht insurance covers:

Liability protection: the bare minimum insurance

Property damage liability pays for damage to another person’s property caused by the accident you commit. You are covered if your yacht causes damage to individuals or damages other ships, docks, or buildings. Remember that harm or damage might occur due to direct contact with your boat or events induced by your yacht, such as during heavy wakes. In most cases, boat liability insurance covers you against covered claims and litigation involving settlements and legal expenses. To ensure that you have the right coverage, talk to your advisor regarding your needs and potential dangers.

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.

Uninsured boater coverage

Indemnifies bodily injured passengers of the insured watercraft who suffer injuries due to the uninsured owner of a different vessel.

Search and rescue

The maximum amount is $10,000 for costs that an insured incurs to a government entity like the United States Coast Guard (USCG), which provides emergency assistance and is covered at absolutely no cost.

Marine environmental damage and pollution coverage

This protection is available up to $10,000 in penalties and fines in the event of marine environmental damage as per the policy’s conditions. This coverage is added to the insurance company’s liability and OPA limit.

Agreed value coverage or actual cash value coverage

A cash value policy offers lower coverage than an agreed value insurance policy, however, generally with a lower cost. ACV policies provide coverage up to the value of the vessel. ACV policy would protect up to the price of the market for the boat if there was a complete loss, including depreciation and conditions of the vessel when it suffered the loss.

Crew medical and personal coverage

Reasonable medical and related costs are covered for all onboard passengers leaving or boarding the vessel. These benefits are granted per person instead of per event.

If your vessel gets damaged by accident, collision insurance is an optional insurance policy that covers the cost of fixing and replacing the damaged part with less deductible.

Sinking and wreck removal

Insurance for boats generally can cover sinking. However, there are some critical policy limitations. In general, insurance for boats should protect your boat if it sinks due to any covered risk. The policy could reimburse you for the cost of salvage or removal.

What is usually excluded from yacht insurance policies or comes as an extra?

War coverage

Damages caused by acts of war can turn out to be too great to insure, making the repayment too astronomical to be true.

Hurricane insurance

Your boat insurance provider may be able to pay for damages to your vessel caused by wind and hail from a storm in the event of a hurricane unless stated explicitly in the policy. Contact your boat insurance provider to find out what coverage you have during a storm.

Marine life encounters

Most insurance for boats doesn’t provide coverage for marine-related damage such as sharks, whales, and many other species. If you frequently sail in water full of marine creatures, it is possible to discuss a supplemental insurance policy with your insurance provider.

Insects and mold

The majority of yacht insurance policies do not cover insects and mold. It is essential to take the necessary steps to safeguard yourself against any pests on your vessel. So, this means that you must wash, drain, and dry your boat’s equipment after use.

Toys and PWC onboard

The PWC onboard may need to have a separate insurance policy as it is an expensive purchase.

Negligence or criminal acts

No insurance company is accountable for paying for the illegal actions of other people. Damage or loss due to reckless negligence and incompetence is also not acceptable.

Most insurance coverage for boats won’t cover certain events, such as racing on a yacht. Suppose you plan to use your boat to compete. In that case, you might want to consult your insurance representative about supplemental insurance, precisely the possibility of additional liability insurance if there’s a crash in the course.

Kidnapping and ransom

Because of the high stakes involved – human life and assets such as vessels and cargo — as well as the criminal character and challenging legal context, resolving a hijacking or abduction for ransom is a difficult task. Hence, kidnapping and ransom are not included in yacht insurance.

What do you need to know before picking a yacht insurance policy?

When evaluating physical damage cover, the most significant question is whether the insurance is focused on “agreed value” or “actual cash value” damage payout. If there is a complete loss, most agreed value coverage covers the amount shown on the insurance contract. After depreciation, you will receive compensation.

The actual cash value coverage offers protection up to the vessel’s present market worth at the moment of complete loss, after depreciation and the deductibles.

Although the coverage is smaller in an actual cash value insurance than in agreed value insurance, the policy is generally inexpensive.

The next thing you want to consider while choosing your insurance is the deductible and premium.

The amount you self-insure in the case of a loss is your yacht insurance deductibles. Put another way, it is the amount you spend on claims before your insurance comes in.

The next is premium. Choose insurance that can fit your budget to pay your premium on time without fail. 

Another thing to consider is the Intended cruising area. Some policies put restrictions or have a defined area while cruising. So, choose an insurance policy that suits your cruising area so that in case of mishaps, you can get coverage.

Yacht Insurance Requirements

Is yacht insurance mandatory?

While it’s not usually a legal necessity, it is always a good idea. It’s unlikely to cost much, but it might save you a lot of money in a disaster. Even if you or your captain are the finest sailor on the planet, you must consider what would happen if someone else collides with your yacht.

Changing weather may damage your boat, yet you usually have little control over it. Fortunately, most yacht insurance policies aren’t too costly, and the modest additional cost may provide comfort while cruising on the sea.

Does the bank require insurance while you finance the yacht?

Yes, your bank may require proof of yacht insurance if you want to finance the yacht.

Do ports and marinas need your yacht insurance?

For utilizing their facilities, numerous ports and marinas will need you to have boat insurance.

Does renting the yacht require insurance?

If you intend to rent out your yacht, you must have coverage to safeguard your asset, and yacht insurance can be highly beneficial. If you want to rent your yacht, you must get boat insurance to protect yourself from liability hazards, and the insurance covers the majority of liability concerns.

Read also : The yacht charter experience ladder

How much does a yacht insurance cost?

Usually, yacht insurance costs between 1% and 5% percent of the yacht’s value. For instance, you may spend around $2,500 annually to insure a boat worth $100,000.

However, similar to other types of insurance, the cost of your boat insurance depends on you and your vessel. The higher the value of a boat, the greater the insurance cost. Yacht insurance is often costlier than floating insurance since yachts are more expensive. High-powered boats are riskier. Thus, insurance companies consider the kind of engine (inboard or outboard, amount of horsepower, and so on).

How can I lower my yacht insurance cost?

Here are a few steps that you can take to lower your insurance cost.

Limit the cruising area of your yacht

There are navigational restrictions in marine rules, meaning you may only sail inside a specified region. The premiums will be less the smaller and securer the area is.

Have good training and driving records

Insurance companies are interested in your expertise on the water. The completion of a boating course demonstrates proficiency, which reduces your risk. Most insurance companies would consider boating lessons, but they may even provide a rate reduction. Contact your agent to determine whether safety-related boating classes impact your premium rates.

Lower the liability limits

Most insurance companies will require your credit score to establish suitable premiums. Maintaining a good credit score has several advantages, including cheaper insurance prices. To lower your liability limits, consider working on your credit score.

Pick a higher deductible to reduce the premium of your insurance

A greater deductible implies that the policyholder will be responsible for a percentage of the claim, hence decreasing the occurrence of claims. You choose to pay a part of the claim by raising your deductibles out of your cash, and the company will eagerly reduce your premium.

Choose seasonal insurance during the offseason

Fire, theft, vandalism, and winter storms can all cause significant damage and financial burden. You won’t be insured for any winter tragedy that strikes your yacht during the off-season if you don’t have insurance. You’ll be responsible for possibly astronomical expenditures.

Pick a modern boat rather than an old one

A new yacht will cost less to insure than an older one. This is because older ones are susceptible to acquiring defects, while newer ones are not. Further, you can take several steps to improve your yacht’s safety, contributing to lowering your cost. Like, installing an autonomous fire control system may decrease the danger of fire damage and make you eligible for a premium reduction. Additionally, safety devices like radar, depth finders, first aid kits, GPS, emergency kits, and EPIRBs may reduce the danger.

Our advice to find the best insurance broker at the best cost for a yacht

Avoid using your home and car insurer for yachts above 27”.

Usually, boat insurance is meant for vessels less than 26 feet long. Yachts are generally longer than 27 feet, have far more powerful engines, and cost more than smaller vessels.

Yachts typically go greater distances and deeper seas, transport more passengers, need a crew and have several equipment and personal possessions. These variables result in distinct risk exposures and need particular insurance policies, coverage choices, and deductibles.

Maritime law governs rather than state or federal law in deeper seas, which may be more complex. If your boat has a crew, you might be obliged to have Harbor workers and Longshoreman’s covers.

Partnering with an advisor who knows the worth of your boat and how you intend to use your boat can assist you in getting the necessary coverage for any potential catastrophes. You will also need specific insurance coverage if you own a high-performance boat due to the increased risk.

Pick a trustable company with expertise in marine insurance

You can choose your regular insurance provider to get your marine insurance. There are several maritime governing rules when you decide to sail on the sea or plan to sail overseas. Additionally, it is essential to engage with a provider that has a deep understanding of boat and yacht coverage. This is vital at the time of insurance application and in the severe case of a claim.

Special needs might require custom policies

If you have any special needs, additional coverage choices are available for medical costs, private possessions, the boat’s transportation equipment, and more that may be added to any plan. However, that relies on the type of insurance provider you choose.

Optional coverage extensions:

• Trip disruption
• Private property
• Trailer Coverage
• Towing and Emergency Roadside Service
• Uninsured Watercraft
• Individual Liability

Get an experienced yacht broker to help you navigate policies.

You may have 100 policies in front of you and many lucrative offers claiming several things. Yet, making the right insurance takes time and a better understanding of all the coverage. So, an experienced broker can help you navigate all these policies and select one that fits your budget and particular situation.

The best companies for yacht insurance

Many insurance firms provide boat insurance at affordable prices. Shop around to ensure that you receive the necessary information to make an educated selection. Also, there are several websites that offer evaluations of various insurance providers and are excellent starting points for your study.

Communicate with other sailors; determine which aspects they value and why. You would be in a position to make the most excellent option for your requirements when you analyze the services of various companies.

Being on the ocean is a feeling of serenity, tranquility, and impending new experiences. So, this is an encounter you want to go on forever. Further, your sailing boat is a significant investment. Hence, consider having your luxury boat insured to cherish the best of life and keep your investment safe.

Don’t take chances with your yacht, act now and ensure a safe and worry-free sailing experience

Now that you understand the importance of yacht insurance, don’t wait any longer to protect your valuable asset. Contact us today to get a quote and secure peace of mind on the water. Our team of experts will guide you through the process and help you choose the best coverage for your needs.

Frequently Asked Questions

All ship and yacht owners are obliged to have marine insurance, mainly when the vessels will be utilized for commercial or transit reasons and move people, labor, or goods overseas.

our yacht insurance usually protects your yacht against frequent dangers such as drowning, storm, fire, collisions, and theft. You may also be protected by boat insurance if you accidentally harm somebody or destroy their property. Your coverage may cover the following boat components: machinery, attached equipment, hull.

The exclusions from yacht insurance policies include: criminal actions of others, insect infestations, lack of due diligence on the part of the assured or managers, common wear and tear, loss resulting from delay, and intentional wrongdoing by the captain or crew.

The typical cost of boat coverage is between $200 and $500 per year. However, insurance may cost between 1 and 5 percent of the boat’s worth for a yacht or sailboat. For instance, you may spend around $2,500 annually to insure a boat worth $100,000.

Sailboat owners often spend between $250 and $1,500 annually to protect their yachts. This price varies depending on various criteria, including insurance type and insurance amounts, and sailboats usually are less costly to cover than powerboats.

Annual insurance on the yacht will range at roughly 1.5 percent of the boat’s value. The cost to insure a catamaran depends on hull valuation, location, and the boat’s operation.

The insurance coverage of a mega yacht or a super yacht can be around $240,000.

To reduce the cost of yacht insurance, you can take the following steps: installing safety equipment, demonstrating better boat riding skills by undertaking a boating course, considering your deductibles, limiting your sailing area or working on credit scores.

Hull relates to the vessel’s body. The insurance will cover unexpected damage or loss to the boat anywhere inside the policy’s specified maritime boundaries.

Usually, classic boat insurance is provided by specialized insurance firms who specialize or have experience in protecting classic and antique vessels. For covering your old boat, get a quotation from a specialized insurer and verify that your policy provides the protection you want for a sense of security.

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Yacht Insurance

What does yacht insurance mean.

Yacht insurance is a type of insurance policy that indemnifies the cost of accidental loss or damage to yachts or pleasure boat owners. Yacht insurance policies provide comprehensive and third party liability insurance protection.

Insuranceopedia Explains Yacht Insurance

Typical yacht insurance policies cover the boat, machinery, theft, and damage. One unique aspect of yacht insurance is that coverage covers damages that occur at sea, while the yacht is moored, while it is kept on land, or while it is in transit.

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What is Marine Insurance?

A simple definition of insurance would be “Protection against future loss.” Marine insurance is another variant of the general term ‘insurance’ and, as the name suggests, is provided to ships, shipyards, marinas, offshore installations and floating equipment.

Independent owners can avail of insurance facilities for their watercraft (PWC), megayachts, yachts, and pleasure craft. Some boat insurance coverages include wreck removal and salvage without additional hull coverage costs.

Most importantly, cargo insurance provides coverage to cargo loaded onto ships or vessels during the transportation process.

Different types of coverage options offer protection to various kinds and sizes of ships, depending on the shipping routes taken.

Insurance policies are well-laid-out contracts that both parties must abide by. A policy ensures the vessel is against common risks, such as property damage, theft, collision, explosion, capsizing, etc.

Marine Liability Insurance/P&I, or protection and indemnity, protects third-party liabilities that shipowners and companies are exposed to during their operations. It is indemnity and not liability coverage. It includes coverage for injuries, illnesses, and loss of life caused by operating the vessel. Medical expenditures, damage to other vessels, collision and related expenses are also covered.

Many types of marine insurance and marine insurance companies with years of experience and expertise offer different coverage plans.

Some inland marine insurance providers provide coverage for goods in transit, even when they have reached land and are taken to storage and logistics facilities.

Marine insurance coverage is essential because, through marine insurance, ship owners and transporters can be sure of claiming damages, especially considering the mode of transportation used.

Of the four modes of transport—road, rail, air, and water—the latter most worries the transporters. Not only do natural occurrences have the potential to harm the cargo and the vessel, but other incidents and attributes could cause a huge loss in the financial casket of the transporter and the shipping corporation.

Incidents like piracy and possibilities like cross-border shoot-outs also pose a significant threat to water shipments. Therefore, to avoid any loss because of such events and happenings, it is always beneficial to have a backup, such as marine insurance, in the interest of the corporation and the transporter.

Another important aspect of having marine insurance is that a transporter can choose the insurance plan according to the size of his ship, the routes that his ship takes to transport the cargo, and many other minor points that could significantly affect the transporter.

Also, since various plans and policies indicate covering not just the cargo but also the vessel, the transporter can choose and avail of the best policy that suits his business.

However, as much as marine insurance provides a fair claim to transporters and corporations, it has to be understood that the trickiest and strictest insurance areas when the insurance commenced – i.e. from the 17th century onwards.

While dealing with the scope and range of marine insurance , a ship’s captain must follow a rigid protocol regarding the route and time taken for the cargo and the vessel to reach the intended destination port.

If there is any discrepancy or violation in terms of the route taken, i.e. if the captain varies or digresses in his route from the one originally intended as a part of the ship’s course, then even if there is any mishap occurring to the vessel or the cargo, the insurance claim will be rejected entirely without any possibility of the claim being reimbursed to the claimant at some future date after a few tough negotiations.

Therefore, it becomes essential that a ship’s captain consider the prescribed routes to avoid a failed insurance contract due to an accidental loss caused by a deviation in the path. This would encourage caution on the captain’s part and reduce the possibility of losing essential insurance claims due to inadvertence and negligence.

Marine insurance is a haven for shipping corporations and transporters because it helps to reduce financial loss due to the loss of critical cargo. Also, it helps to establish the duty, dedication, and straightforwardness of the insurance companies toward the transporting companies and the receiving parties.

You might also like to read

• Different Types of Marine Insurance & Marine Insurance Policies
• Marine Insurance for Piracy Attacks: Necessities and Benefits
• The Importance of Marine Insurance Brokers
• What is Marine Cargo Insurance and How to Get One?

Disclaimer:  The author’s views expressed in this article do not necessarily reflect the views of Marine Insight. Data and charts, if used, in the article have been sourced from available information and have not been authenticated by any statutory authority. The author and Marine Insight do not claim it to be accurate nor accept any responsibility for the same. The views constitute only the opinions and do not constitute any guidelines or recommendations on any course of action to be followed by the reader.

The article or images cannot be reproduced, copied, shared, or used in any form without the permission of the author and Marine Insight.

About Author

Raunek Kantharia is a marine engineer turned maritime writer and entrepreneur. After a brief stint at the sea, he founded Marine Insight in 2010. Apart from managing Marine Insight, he also writes for a number of maritime magazines and websites.

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i like the information you give on media

A very informative post. Marine insurance is important in case of import and export of goods which is an integral part of the economy. By compensating against the loss of goods and ship, the policy helps exporters and importers bear any losses incurred during transit.

i liked it so mush but can you write about it is polices ,please!!

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Yacht Insurance [Complete Guide]

March 11, 2020 11:55 am

For the yacht owner , insurance is a necessity. Superyachts present a unique risk, as the yacht itself is highly valuable, and additionally, the nature of operations onboard requires the crew to be protected. This class of risk is serviced by specialized underwriters, who use contract forms that have been developed explicitly for this market. Previous papers in this series have provided insight into the yacht purchase and charter processes , maritime compliance , and costs of ownership . This next article will outline some of the principle types of insurance for yachts as well as some other “things to think about” for owners considering their options for insurance. 

Property Insurance (Hull & Machinery)

The property value risk is known in maritime insurance parlance as “Hull and Machinery”, often reduced simply to “hull”. 

Hull Insurance – Hull insurance is provided to the value of the yacht and underwriters will look for proof of that value before providing the insurance. Other operational provisions will be expected by the underwriter to be in place as conditions of the policy. Such provisions may include items such as a tender-towing plan, severe weather (hurricane) plan, or a yacht management contract.   

Yacht Insurance Premiums – In years past, there was a parametric relationship between premium and value, which made it easy to estimate premium based on the value and little other information. With the recent spate of heavy losses, however, insurance providers are now taking a much more actuarial view of the risk, reviewing operational and cruising plans prior to providing a premium quote. 

Learn More About:

• • Getting Underwriter Approval
• • Determining Yacht Insurance Premiums
• • Insuring Valuable Items Onboard
• • Warranties + Conditions Precedent

Liability Insurance (Protection & Indemnity)

Liability insurance in marine terms is known as “Protection & Indemnity”, shortened to “P&I”. 

P&I Insurance – P&I insurance in merchant maritime trade is often provided by “mutual” clubs which aggregate risk and provide extremely high (typically $500 million) limits for limited premium. Mutual members are advised that additional “calls” may be required if there is a heavy loss.  For yacht owners, however, P&I club level of coverage (that $500 million) is available on non-mutual, fixed-premium terms and with very small deductibles. 

• • Statutory Insurance Requirements
• • P&I Club Benefits
• • What Liability Insurance Covers

Crew Medical Insurance

Insurance policies are available to provide medical insurance to crew.  Policies may be tailored to the requirements of internationally domiciled crew on yachts that travel internationally or may be specifically designed to meet the needs of a U.S. national crew which stay predominantly in the U.S., meeting the requirements of the Affordable Care Act. 

• • Standards for Crew Employment
• • Yacht Owner Obligations to the MLC

Additional Insurances for Yacht Owners

The hull, P&I and crew medical insurance elements discussed above comprise a basic level of cover which may satisfy most yacht owners.  Additional cover extensions which are specific to certain risks are also available:

Charter Insurance – Owners that offer their yacht to the charter market will want to insure themselves against the contractual risks that arise from the use of the yacht by the charterer. Most underwriters will allow such use up to a limit, but owners are advised to check the terms of their policy.

Freight, Demurrage and Defense (FD&D) –  This coverage responds to approved legal costs of the vessel owner arising out of contract disputes. This is for disputes that fall outside of P&I* (P&I responds to bodily injury and property damage caused by the legal liability of the vessel owner).

Kidnap & Ransom (K&R) –  Widely available and known to persons of high net worth, K&R policies are available as extensions to yacht insurance.

Cyber-Extortion – The new frontier of yacht insurance, cyber-management operational policies and insurance policies are provided to protect owners from associated risks.

• • Legal Expenses Coverage
• • Cyber-Extortion
• • Employment Practices Insurance
• • Yacht Repair + Maintenance Considerations

Insurance Claims

Yacht owners place insurance and pay premiums for a reason, to be made whole in the case of an incident that causes loss. Yacht owners should not be afraid of informing their insurer of a potential claim; the involvement of the insurer’s legal and survey team will very often result in no claim being needed, or at the least will forestall a long and difficult battle of technical repair and ongoing legal involvement. 

In the case of any incident which may become an insurance claim, yacht owners and their representatives will be well-advised to ensure that the insurance is informed, that they are familiar with any loss adjusting surveyor appointed by their insurance, and that, if necessary, they also appoint an independent adjuster who will work alongside the insurance-appointed surveyor to represent the owner’s interests. 

Looking for more details?

Receive the complete Yacht Insurance Guide including:

• • Premiums + Deductibles
• • Underwriter Roles
• • Additional Yacht Insurances

This should not be considered a complete guide. For a better understanding of superyacht services, contact Ben Farnborough . 1

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Yacht Insurance

Finding the perfect coverage has never been easier.

Insurance doesn’t have to be boring. That’s why we hired Sara East to be our BA insurance writer. Maggie specializes in making mundane subjects hella-entertaining.

Yachts are a luxurious way to be on the water, but owning a yacht means having the right insurance in the event of damage or being destroyed. Because of their price, repair or replacement is likely to be very expensive making the proper coverage crucial for boat owners.

Before using your yacht, an independent agent can work with you to create a customized yacht insurance policy to your specific watercraft, its value, and how you use it. 

Boating Statistics

No one likes to think about the dangers of boating, but accidents can happen and it's best to be prepared in the event that you face unexpected hardship. Whether you hit another boater, have an incident with a passenger, or your boat is damaged while being transported or docked, lots of things can lead to a financial headache for you.

Here are some statistics about boating accidents.

• Cabin motorboats, which include yachts, accounted for 14% of all boating accidents
• Only about 20% of all boaters who drowned were on vessels larger than 21 feet
• Operator inattention was cited as the leading cause of accidents involving cabin motorboats

What Is Yacht Insurance and What Does It Cover?

Yacht insurance is a specialized type of boat insurance for luxury boats. Yachts can be used for personal as well as commercial use, so insurance policies must be created to accommodate each of those needs. 

While yachts, like most boats, depreciate over time, they still generally have a much higher than average value. Because of their high values, a standard boat insurance policy may not provide enough coverage for your vessel.

The components of yacht insurance are similar to standard boat insurance coverage.

• Bodily injury and property damage liability: Covers the costs associated with injuries or property damage you cause to another person, as well as legal fees. If the liability limits in your yacht insurance policy are not adequate to protect your assets from a lawsuit, you may want to consider buying an umbrella liability policy , which provides a much higher liability limit.
• Collision coverage: Pays for damage to your boat after a collision with another boat or object.
• Comprehensive coverage: Covers non-collision damage or loss, including theft, fire, vandalism, or damage caused by an object other than another boat.

Additional yacht insurance options to consider

• Uninsured/underinsured boaters insurance:  Covers any damage or injuries from an accident with an uninsured or underinsured boater. Since boat insurance is rarely required by law, if you have a significant amount invested in a vessel, this is a good insurance option to discuss with your agent. 
• Medical payments coverage: Covers medical expenses and funeral expenses for anyone on that is injured, entering, leaving or while on your boat.
• Equipment and personal effects coverage: Pay to repair or replace damaged or lost items such as gear, fishing equipment, cameras, and other personal belongings.

An independent agent can work with you to determine the appropriate coverage for your needs. Because these agents work with multiple insurance companies, they can help protect all of your interests with a broad range of insurance coverage, all from one agency office.

Is Yacht Insurance Different from Standard Boat Insurance?

Yacht insurance provides similar types of coverage as standard boat insurance . However, yachts have some specific differences from standard boats, and yacht owners generally need certain protection that regular boat insurance does not provide.

For example, a yacht policy tends to restrict hauling on a trailer to only a few hundred miles, while boat insurance tends to provide coverage for trailering over longer distances. 

Also, deductibles for yacht policies are very flexible, instead of having set amounts like $250, $500 or $1,000. In addition, yacht policies can include coverage for raising and removing a sunken yacht, while boat policies generally do not include this coverage.

Is Yacht Insurance Required?

Yacht insurance is not typically required by state law. However, sailboats often do have insurance requirements. So, if you have a sailing yacht, insurance may be required by law. 

Yacht club membership statistics

You will also need to buy insurance to protect your investment in your vessel if you finance the purchase of your yacht through a lender.

Many marinas require that you have insurance in order to slip your boat at the marina. Check your local marina's guidelines, and be sure to learn about your state’s laws and regulations. 

Do I Need Yacht Insurance?

A yacht can range in price from $300,000 to several million dollars. Purchasing one is a big investment and having the ability to insure your investment can ease your mind if there's an accident or your yacht needs repairs or replacement.

Insuring your yacht is also not just about the boat. In the event that an injured party files a liability claim against you, you will want to have enough coverage in place to protect your boat, home, savings, investments, and future income.

Assessing your financial situation will help you to determine how much yacht insurance you need.

Save on Boat Insurance

Our independent agents shop around to find you the best coverage.

How an Independent Insurance Agent Can Help with Yacht Insurance

A local independent agent will talk with you, free of charge, to learn about your yacht and insurance needs. They'll gather multiple quotes for you from several different companies and help you compare options and rates. Your agent can assist you with every aspect of your insurance and will be your point of contact if you need to file a claim.

An independent agent can help to prevent gaps in coverage that leave you exposed to risk. You will know you are getting the right coverage for your needs, and that you are not paying for any unnecessary coverage. 

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Financial Tips, Guides & Know-Hows

Home > Finance > Yacht Insurance Definition

Yacht Insurance Definition

Published: February 19, 2024

Understand the finance aspect of yacht insurance with our comprehensive definition and guide. Protect your investment with the right coverage.

• Definition starting with Y

(Many of the links in this article redirect to a specific reviewed product. Your purchase of these products through affiliate links helps to generate commission for LiveWell, at no extra cost. Learn more )

Understanding Yacht Insurance: Coverage, Benefits, and Importance in the Maritime World

When it comes to your prized yacht, protecting your investment is of utmost importance. Yacht insurance provides the financial safety net and peace of mind that every yacht owner needs. In this blog post, we will explore the definition of yacht insurance, its coverage, benefits, and why it is crucial in the maritime world.

Key Takeaways:

• Yacht insurance covers damages to the yacht, liability protection, and personal property coverage.
• Comprehensive yacht insurance policies can provide coverage for a wide range of risks, including accidents, theft, natural disasters, and personal injury liability.

What is Yacht Insurance?

Yacht insurance is a specialized type of coverage designed to protect yacht owners from financial loss due to damages, theft, accidents, and other unfortunate events related to their vessel. It provides financial assistance for repairs, replacement, or legal expenses, ensuring that yacht owners can continue enjoying their maritime adventures without worrying about significant financial setbacks.

What Does Yacht Insurance Cover?

Yacht insurance typically includes three main areas of coverage:

• 1. Hull Coverage: This part of the policy covers physical damage to the yacht itself, including repairs or replacement costs arising from accidents, collisions, storms, sinking, or even fire and explosion risks.
• 2. Liability Protection: Yacht owners can be held liable for accidents, injuries, or property damage caused by their vessel. Liability protection within yacht insurance covers legal expenses, medical bills, and compensation payments for third-party claims.
• 3. Personal Property Coverage: Yacht insurance also extends coverage to personal belongings onboard, such as electronics, furniture, jewelry, and other valuables, safeguarding them against loss, theft, or damage.

Why is Yacht Insurance Important?

Yacht insurance is vital for several reasons:

• 1. Financial Protection: Yacht ownership involves significant financial investment, and unexpected damages or accidents can lead to substantial financial loss. Yacht insurance provides the necessary financial safety net, ensuring that owners can recover from such losses without facing financial turmoil.
• 2. Compliance with Marina and Lender Requirements: Many marinas and lenders require yacht owners to have insurance coverage in order to dock their vessels or secure financing. Having yacht insurance not only protects your investment but also allows you to comply with these requirements.
• 3. Peace of Mind: Knowing that your yacht is protected provides peace of mind, allowing you to fully enjoy your time on the water without worrying about potential risks or incidents.

In conclusion, yacht insurance is a crucial aspect of yacht ownership, providing comprehensive coverage and financial protection for yacht owners. Whether you own a small pleasure yacht or a luxurious vessel, having yacht insurance in place ensures that you can navigate the seas with confidence and security.

If you’re looking to sail stress-free and protect your prized possession, consider exploring yacht insurance options and find a policy that suits your needs.

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Understanding boat insurance

A comprehensive guide to finding the right boat insurance coverage. Insurance coverage is the same from company to company, right? While that may be true for many kinds of insurance, it is not necessarily true for boat and yacht insurance. Marine insurers providing boat and yacht insurance offer a wide range of coverage suited to that company's level of expertise, underwriting appetite, and type of client they wish to attract. This article attempts to describe the basic coverage that is available under boat and yacht insurance policies, and the items that should be considered before selecting a policy*. We will also point out the factors that the marine underwriter contemplates when determining the rate to charge a client. We hope that this will assist in making a more informed decision when purchasing insurance for your boat. Only you can decide on the right combination of coverage and price that suits your needs.

Start with the basics

Let's start by describing the two basic sections of a typical boat or yacht insurance policy: physical damage and liability. The physical damage section covers accidental loss or damage to the boat and its machinery. This not only covers the hull and the engine(s), but also the sails, personal property, and other equipment on board that are required to operate the boat. The liability section, sometimes referred to as Protection & Indemnity, covers your legal obligations to third parties. This legal liability can arise from bodily injury or loss of life, or damage to someone else's property, as a result of the ownership or operation of your boat. Liability coverage also helps pay for your legal defense if you are sued for an occurrence that may be covered under your boat insurance policy.

Physical damage — What losses are covered?

Physical damage coverage generally pays for repairs to your boat that are necessary as a result of damage caused by a wide range of perils. The best policies provide "all risk" coverage, which means that if the cause of loss is not specifically excluded, it is covered. Typical causes of loss that are covered include: weather-related perils such as wind, rain, hail, lightning and wave action; fire; loss or damage caused by theft or vandalism; and collisions with docks, submerged or floating objects or other boats. It is wise to select a policy that continues to cover your boat while it is stored on land, or while you transport your boat over land by trailer. The boat owner has the responsibility to maintain their boat, and so normal wear and tear is often excluded under a boat or yacht policy. The number and type of physical damage exclusions vary from company to company, so take the time to compare to avoid surprises later.

Loss settlement - Agreed Value vs. Actual Cash Value

When comparing physical damage coverage, the most significant difference that can be found among boat or yacht insurance policies is whether the coverage is based upon "Agreed Value" or "Actual Cash Value" (ACV) loss settlement. Agreed value policies normally pay the amount shown on the policy if the boat is considered to be a total loss. Under such a policy, damage resulting from a partial loss is generally paid for on a replacement cost (new for old) basis, less your deductible; that is, physical depreciation will not be factored into determining the value of the lost or damaged items. However, some items that are subject to higher amounts of normal wear and tear, such as canvas, sails, trailers and some machinery, may be subject to allowance for depreciation in the event of a covered loss. An Actual Cash Value policy provides less coverage than an Agreed Value policy, but generally at a lower cost. An ACV policy provides coverage up to the current market value of the vessel in the event of a total loss, taking into account depreciation and potentially other factors. Payments made for partial losses are usually reduced based upon physical depreciation of the lost or damaged items, and the policy deductible is also applied.  Your insurance professional can help you determine which type of policy is right for you.

Personal Property and Emergency Towing & Assistance

Two additional coverages often found in boat and yacht insurance policies are: Personal Property coverage, and Emergency Towing & Assistance coverage. Personal Property coverage includes such items as clothing, personal effects, and sports and fishing equipment while those items are being loaded/unloaded and while aboard your boat. Similar to physical damage coverage, there are exclusions that vary from company to company, so it pays to compare. Emergency Towing & Assistance coverage reimburses you for the costs that you incur when you need emergency assistance for your boat, and you and your boat are not in immediate danger. Some examples of emergency services that you may need which may be covered include: towing to a place where repairs can be made; delivery of fuel, oil or parts; or emergency labor while underway. Check beforehand to determine whether a deductible applies to this coverage or if there is a maximum annual limit for multiple towing claims.

Liability - Other important coverages

The liability section of a comprehensive boat insurance policy provides many coverages that are important to boat owners. Coverage for the removal or disposal of the wreck of your boat is important to have, especially if the wreck is deemed to be a hazard to navigation. Boat owners may also be responsible for any containment and clean-up expenses resulting from oil pollution or contamination caused by their vessel. It's important that your boat or yacht insurance policy covers your liability for those clean-up expenses because vessel owners are liable under the Oil Pollution Act of 1990 up to the statutory limit (currently $939,800). If you ever intend to borrow someone else's boat, confirm that your liability coverage extends to the other boat. This is called "non-owned" or operating other watercraft boat liability coverage. Finally, boat owners who employ paid crew members should ensure that their policy covers their liability to the crew under the Jones Act and General Maritime Law. A good policy will also provide a separate coverage for your liability under the Federal Longshore and Harbor Workers' Compensation Act. This will cover your statutory liability to temporary shore-based workers, such as a mechanic or marina employee, if they become injured aboard your boat.  Most boat and yacht policies exclude coverage while your boat is chartered to someone else, or used to carry passengers for a fee. Under the right circumstances, a good marine insurance company may extend your coverage to include those situations. So ask first to ensure that you will be properly protected.

Medical Payments coverage

You should verify that your policy has an adequate limit of coverage for Medical Payments. Medical Payment coverage will pay for first aid treatment, ambulance, hospital and other costs that result from someone being injured on your boat, even if you are not legally responsible. It is important to ascertain whether the coverage also applies while someone is boarding or leaving boat, and while being towed behind your boat, such as while water skiing. Check to make sure that injuries to you and your family are also included in this coverage. Given equal amounts of insurance, coverage on a "per person" basis may be preferable to coverage on a "per accident" basis.

Uninsured/Underinsured Boater coverage

Since boat liability insurance is not mandatory, there are many boaters operating without liability coverage. Uninsured Boater coverage is designed to compensate you for injuries sustained aboard your boat that are caused by an operator of another boat who has no liability insurance.

Factors impacting the cost of insurance

The underwriter must consider many factors when determining the rate (or premium) to charge for a boat policy. The most common determinants are: value, length, and age of boat; type of boat (i.e. power, sail); type of engine(s); mooring location; intended area of navigation; previous boating experience and claim history of the owner; and deductible amount. Sometimes the underwriter will also consider the automobile driving record of the owner(s), and whether they have taken any safe boating courses. There are several ways that you can reduce the cost of your boat insurance. The most common way is to select the highest deductible amount that you are comfortable with. In general, physical damage deductibles start at around 1% of the insured value of the boat, and can be increased to sometimes as much as 5%. Each higher deductible amount reduces your insurance premium. Think about how much you could affordably pay out of pocket if a loss occurred. Many yacht policies include a lay-up period, which is a time that the yacht is normally laid up and out of commission, such as during the winter months in colder climates. The underwriter will normally allow a discount for each month that the yacht is decommissioned. You can usually reduce your premium by requesting the longest possible lay-up period that would be reasonable for your part of the country.  Think about where you will actually be operating your boat. If you consistently navigate close to your home port, you should inquire whether a more limited navigational area on your policy can save you money. In other words, you may not need coverage for the entire east coast of the U.S. when you only operate your boat in Maine. The condition of your boat was also mentioned as a rating factor. If you own an older boat, the underwriter may request a recent marine survey of your boat before quoting or insuring it. Lastly, installing certain safety devices on your boat can sometimes reduce the premium that you will pay. Some marine insurers will give credits for such safety items as: an automatic fire extinguishing system in the engine compartment, a fume or vapor detector in the bilge, or certain anti-theft alarm or tracking devices.

Seek out marine insurance specialists

Now that we've described some of the key elements of boat and yacht insurance policies, we hope that you are in a better position to ask the right questions when buying marine insurance. It is also wise to work with a company that thoroughly understands boat and yacht insurance. This is important not just at the time that you apply for insurance, but also in the unfortunate event that you have a claim. Chubb Recreational Marine Insurance has the expertise to help you at every step along the way.

This document is advisory in nature and is offered as a resource to be used together with your professional insurance advisors in maintaining a loss prevention program. It is an overview only, and is not intended as a substitute for consultation with your insurance broker, or for legal, engineering or other professional advice. Chubb is the marketing name used to refer to subsidiaries of Chubb Limited providing insurance and related services. For a list of these subsidiaries, please visit our website at www.chubb.com . Insurance provided by ACE American Insurance Company and its U.S. based Chubb underwriting company affiliates. All products may not be available in all states. This communication contains product summaries only. Coverage is subject to the language of the policies as actually issued. Surplus lines insurance sold only through licensed surplus lines producers. Chubb, 202 Hall's Mill Road, Whitehouse Station, NJ 08889-1600.

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Table of Contents

Yacht insurance.

Yacht insurance is a specialized type of insurance policy designed to protect yacht owners from potential financial losses associated with their vessel. It typically covers damages to the yacht caused by accidents, theft, or natural disasters, as well as liability coverage for injuries or property damage to third parties. Additional options may be included for coverage of personal belongings, emergency assistance, and towing.

The phonetics of the keyword “Yacht Insurance” is: ˈjɑt ɪnˈʃʊrəns

Key Takeaways

• Yacht insurance provides coverage for various risks associated with owning and operating a yacht, such as accidents, theft, and damage caused by natural disasters.
• Insurance policies can be tailored to fit the unique needs of each yacht owner, with options for additional coverage like personal belongings, liability, and towing assistance.
• It is essential to research and compare insurance providers, coverage options, and premiums to ensure you’re getting the best yacht insurance policy for your specific needs and budget.

Yacht insurance is important in the business and finance realm because it provides comprehensive coverage to yacht owners for potential damages or losses related to their valuable marine asset. Due to the high cost of yachts and the potential risks associated with water-based activities, such as accidents, theft, or natural disasters, yacht insurance serves as a crucial financial safety net. Not only does it safeguard the substantial investment made by the owner, but it also offers liability protection, ensuring a more secure boating experience. Additionally, yacht insurance helps maintain the overall stability of the maritime industry, as it encourages responsible yacht ownership and management, ultimately contributing to a healthy and prosperous sector.

Explanation

Yacht insurance is designed to provide protection and assurance to yacht owners against various unexpected events that can occur while owning or using a luxury vessel. The purpose of obtaining yacht insurance is to safeguard yacht owners from potential financial loss due to unforeseen damages, liability issues, or accidents. As yachts are high-value assets, owners invest in insurance policies to protect their investments and ensure their peace of mind while enjoying their time out at sea.

Yacht insurance is commonly used to cover a variety of potential risks associated with owning and operating a yacht. These may include physical damages to the yacht itself caused by events like fire, theft, sinking, collisions, or weather-related incidents. Additionally, yacht insurance often encompasses liability coverage, which protects the owner against claims from third parties for incidents like personal injury or property damage that may occur due to the operation or ownership of the yacht. Some policies may also offer extended coverage for situations such as personal effects replacement, emergency towing expenses, and crew member welfare.

Ultimately, yacht insurance is a valuable tool for yacht owners to mitigate risks associated with their prized possession and foster a sense of financial security when they take to the open waters.

Example 1: A privately-owned luxury yacht: In this real-world example, a successful entrepreneur owns a high-value 100-foot luxury yacht which is used for hosting exclusive events and private vacations with friends and family. To protect their substantial investment, the yacht owner consults with an insurance broker specializing in marine insurance and obtains a yacht insurance policy. This policy would typically cover potential damages and loss due to accidents, theft, weather-related incidents, or liability in case of injury to guests or crew while onboard.

Example 2: A yacht charter business: A yacht charter business provides fleets of yachts for customers to rent for various events, holidays, or sailing adventures. The company’s livelihood depends on keeping their yachts available, safe, and well-maintained, so they purchase yacht insurance policies for each vessel in their fleet. These policies may include hull and machinery coverage, protection and indemnity (P&I) coverage, and business interruption insurance. By having yacht insurance, the company ensures they can continue operating and generating revenue, even in the event of damage, loss, or other unforeseen incidents involving the yachts.

Example 3: A member of a yacht club: An individual who is a member of a yacht club owns a vessel they regularly use for leisure or competitive sailing events. In this case, the yacht club may require members to carry yacht insurance as a condition of their membership. This is to protect the club, its members, and guests from any potential financial risks, especially from damages to club property or other members’ boats that might occur during club events or when using club facilities. By obtaining yacht insurance, the yacht owner can participate in the yacht club activities with peace of mind, knowing they have the necessary coverage in case of accidents, theft, or other damages.

Frequently Asked Questions(FAQ)

Yacht insurance is a specialized type of insurance policy that provides coverage to yacht owners to protect them against potential losses or damages to their yacht or boat, as well as liability for incidents occurring on or around their watercraft.

Yacht insurance is generally required by yacht and boat owners who want to protect their valuable investment and themselves against potential risks such as accidents or other unforeseen events, like theft, storms, or fires. It may also be a requirement by marinas or lenders if you have a loan or need to dock the yacht.

Yacht insurance usually includes multiple types of coverage, such as hull coverage (physical damage to the yacht itself), liability coverage (for injury or property damage caused by the yacht owner), personal property coverage (for personal belongings on the yacht), medical payments coverage (for injuries to the yacht’s occupants), and uninsured/underinsured boater coverage (protection against uninsured or underinsured boaters).

Yacht insurance typically covers larger and more luxurious watercraft, generally over 27 feet in length. Boats smaller than that may be covered under different types of marine insurance policies like boat insurance or personal watercraft insurance.

The cost of yacht insurance will depend on several factors, such as the yacht’s value, size, age, type, and location, as well as the coverage and deductible chosen. Yacht insurance typically costs more than boat insurance for smaller vessels.

Yes, there are several ways to potentially reduce the cost of your yacht insurance. These may include opting for a higher deductible, taking boating safety courses, choosing yacht insurance policies with limited coverage, or bundling your yacht insurance with other insurance policies like home or auto insurance.

When selecting a yacht insurance provider, consider factors such as the company’s financial stability, reputation, customer service, and claims handling process. Additionally, compare quotes from multiple providers and ensure that the coverage options meet your specific needs.

If you plan to take your yacht outside your home country’s waters, you should consider adding international coverage to your yacht insurance policy. This type of coverage usually protects you against risks and liabilities that may arise when navigating international waters.

Most yacht insurance policies will provide liability coverage for injuries or damages incurred by your guests while on board your yacht. However, for paid crew members, you might need to purchase additional coverage such as “crew coverage” or workers’ compensation insurance.

If you need to file a claim for your yacht, it’s essential to contact your insurance provider as soon as possible to report the incident. They will guide you through the claims process, which will usually require documentation, photos, or other relevant information about the event that led to the claim.

Related Finance Terms

• Marine liability coverage
• Hull and machinery insurance
• Personal property protection
• Emergency towing and assistance
• Crew welfare insurance

Sources for More Information

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Yacht insurance

The marine insurance leader for over 45 years.

Find a Markel marine agent and get a free, no-obligation quote today.

If you love your yacht, you’ll love our insurance.

We’ve been the yacht insurance leader for over 45 years because we provide coverages that fit your yacht and your lifestyle. Markel yacht insurance can offer distinct advantages in coverage features, options, knowledge and experience.

Why do you need yacht insurance?

Whether you own a yacht or a houseboat, we understand it’s not a typical boat and shouldn’t be covered by a typical boat insurance policy. That’s where we come in—each Markel yacht insurance policy can be customized to fit your yacht, your needs, your budget and your style.

Still not sure?

Here’s a few of the potential advantages to insuring your yacht with us:.

More complete coverage than any other carrier at no additional cost.

Experienced yacht underwriters and marine claims specialists who provide prompt, responsive service.

Discounts and cost-effective coverage options to save you money.

Flexible payment options.

Save money by customizing your yacht insurance

Actual cash value coverage (ACV) Reduce your coverage to ACV, which factors in depreciation of your yacht should you have to file a claim.

Lay-up option We’ll discount your yacht insurance premium during the winter months when your yacht is not in use.

Higher deductibles If you can manage minor repairs to your boat on your own, selecting a higher deductible will reduce your premium.

Windstorm exclusion Live in an area that isn’t at risk for a hurricane? You may consider removing windstorm coverage from your policy.

Liability only Coverage in case you damage another yacht and/or person (doesn’t require a survey—even for older boats).

What we offer

We offer coverage for a variety of watercrafts over 26 feet in length, including:.

• Sport fishing boat

Our coverages can include:

• Coverage for your yacht
• Coverage for you
• Optional coverages

Hull and equipment insurance protection including:

• Protect and recover can cover reasonable costs incurred when trying to protect your yacht from further damage after an accident
• Consequential damage for non-wood yachts–normal wear and tear and deterioration is not typically covered under a yacht insurance policy. However, if your yacht suffers damage from fire, explosion, sinking or collision because of one of these conditions, you may be protected
• Ice and freezing damage coverage if you contracted with a commercial marina or repair facility
• Agreed value for total loss
• Deductible waived on most total losses
• No depreciation on most partial losses
• Automatic tender coverage

Windstorm extra expense If there is a named storm, watch or warning, we will share the expense with you to help protect your yacht before the storm makes landfall.

Personal effects coverage For all the “extras” you physically bring onto your yacht. (i.e., smart phone, camera, etc.)

Emergency towing and assistance Coverage for towing expenses if your yacht happens to get stuck in or out of the water, including the delivery of gas, oil and parts.

Rental reimbursement coverage Coverage for when your yacht is being repaired from a covered loss.

Uninsured boater Unfortunately, not all boaters on the water have insurance. This coverage helps protect you and your family members if you are injured in an accident caused by an uninsured boater. Coverage is automatically included if watercraft liability is purchased.

Pollution liability Pollution coverage helps protects you if you are held legally liable due to an oil pollution leak or spill.

Medical payments Coverage for injuries suffered during an accident on your yacht.

Paid crew (Jones Act) Protection for you if you are legally responsible for injuries to a paid captain or crew member while on your yacht.

Protection and indemnity Coverage in the event that you are responsible for injuries to another person, or damage to their boat or property. Wreck removal is included with purchase of hull coverage.

• Boat trailer coverage
• Boat lift and boat house coverage
• Fishing tournament reimbursement for fishing boats
• Fishing equipment protection
• Transit and storage coverage
• Trip coverage
• Trip interruption reimbursement
• Personal liability coverage if you live aboard your yacht

Frequently asked questions about yacht insurance

General questions.

How much coverage do I need? Each boat, person, location and situation is different. There isn't a good way to give a "ballpark" figure for how much coverage you need. It’s best to evaluate your comfortable level of risk when protecting your boat, assets and passengers. Your best option is to call our boat specialists at +1.800.236.2453 to discuss the best coverage for you.

Can I insure my yacht for liability only? Yes, we offer protection and indemnity (liability only) coverage to help protect you in case you are responsible for injuries to another person or damage to another boat or property. Many carriers do not offer liability-only policies for yachts, or if they do, require a survey. However, Markel’s protection and indemnity coverage does not require a survey, so you’re able to do what you love without worries out on the water.

Will my policy cover normal wear and tear of my yacht? Most insurance policies will not cover normal wear and tear of your yacht and the deterioration or the resulting damage. However, if your yacht is damaged from fire, explosion, sinking, collision or stranding, you may be protected under our consequential damage coverage.

Can I use my yacht for chartering? We know that sometimes yacht owners charter their yacht for sightseeing tours or even sport fishing to help offset some of the costs of owning a yacht. Markel offers an optional limited charter coverage for these situations provided the captain of the watercraft has a minimum of 2 years loss-free experience of yachting. Additional restrictions may apply.

I live on my yacht. Am I covered? Markel provides live aboard coverage. Be sure to disclose that you live aboard to your agent.

My yacht is in a corporation's name. Can I still insure it with Markel? Our yacht insurance policy can cover corporately titled boats for both personal use and client entertainment. We do require all corporately titled boats designate a designee of the watercraft. Contact your agent to learn more.

Do I need to insure my yacht in the winter? It may seem that since you don't use your yacht in the winter you don't need to insure it. This is a risky way of looking at insurance and one that we have seen cost far too many people far too much money. Your yacht is at risk for damages at all times of the year, not only when it's on the water. For example, if your yacht is placed in storage for the winter and is damaged, you will not have any assistance in paying for those repairs without an active insurance policy.

Do you cover unique boats? We offer coverage for various kinds of boats that other insurers may shy away from, including: high performance boats, airboats, hovercraft, etc. Not sure if your watercraft will be covered? Give us a call at +1.800.236.2453 to speak with one of our marine insurance specialists.

What kind of fishing equipment is covered? Your rods, reels and tackle are automatically covered under your personal effects coverage up to the limit purchased. If that coverage isn't sufficient, our fishing equipment coverage provides insurance protection at replacement cost. Please contact one of our marine insurance specialists at +1.800.236.2453 to find out more.

Claims questions

How do I file a claim? We understand that no one wants to file a claim. That's why we do everything we can to make the process as painless as possible. You can report your yacht insurance claim by calling our office at +1.800.236.2453 or submit your claim online and we'll take it from there.

How long will it take for my claim to be processed? We are committed to investigating, evaluating and resolving marine insurance claims in a timely manner.

Is there anything I can do to help speed up the claim process? Yes, you can help streamline the claims and settlement process and avoid delays by providing the following information when you file your claim:

• Policy number
• Date, time and location of loss or damage
• Description of loss or damage
• Digital photos (if possible)
• Phone number to reach you

Additional resources

Related articles.

From boat safety tips to breaking down yacht insurance, find the information, advice, and resources you’ll need all in one place.

Warrior Sailing

Markel is a proud supporter of Warrior Sailing, an organization dedicated to healing and strengthening the lives of veterans through sailing. Visit warriorsailing.org to learn about Warrior Sailing and how you can donate to the program so they can continue to help the lives of wounded veterans.

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Yacht Insurance

Let gallagher charter lakes navigate the insurance process for you..

Yachts are valuable assets worthy of the best insurance protection. And while yachts differ by construction, size and value they also differ in the way they are used and how they are navigated. Understanding the risks inherent with yacht ownership is critically important to being able to properly insure the yacht. That is why working with a Yacht Insurance Specialist is so important to procure the broadest protection available at the most affordable price. That is the definition of true value and that is what we are passionate about here at Charter Lakes.  Our account executives will help you design a policy that precisely fits your needs.  We have 24/7 claims service, so you will have support available when you need it in the unfortunate event that you have a mishap on the water.

Please note: Every yacht insurance policy is written differently and can vary greatly in the amount of coverage it provides. Charter Lakes represents the largest, most financially sound yacht insurance underwriters in the country. We understand the strengths and weaknesses of each underwriter’s policy form, including those of our competitors. Our Account Executives will help you find the right policy to precisely fit your needs and your budget.

Basic Yacht Policy Features Include:

• All Risk policy form written on an occurrence basis
• Physical Damage is written on an Agreed Value basis
• Protection and Indemnity Liability
• Pollution Liability
• Medical Payments
• Personal Property Coverage
• Uninsured Boaters Liability
• Towing and Emergency Assistance

Did you know that many yacht insurance policies specifically exclude loss caused by mechanical breakdown? That may not be surprising to you since your automobile policy excludes mechanical breakdown as well. However, we sell several policies that do not exclude mechanical breakdown loss. This could mean the difference between having a $ 50,000 engine failure covered or not.

The yacht Insurance marketplace can be challenging. Working with a Yacht Insurance Specialist is the best way to procure the broadest insurance protection at the most affordable price.

Putting our team behind you is a winning combination.

• Yachting World
• Digital Edition

Bluewater cruising insurance – what you need to know

• April 13, 2022

Janneke Kuysters looks at bluewater cruising insurance and explains what you need to know and why it's become increasingly difficult to insure your yacht for long distance cruising

There’s no getting around the fact it has become a lot harder to get boat insurance, particularly bluewater cruising insurance. However, there are still ways to secure good coverage – you just need to know what makes insurers tick.

If you want to ruin any cruising sailors’ potluck party on a tropical beach, just drop in a question about boat insurance. Many boat owners have stories to tell. Just about every aspect of the process has become more complicated for bluewater cruising insurance, it takes a bigger chunk out of the cruising budget every year and the rising deductibles make it more and more tempting to go uninsured. So, what is going on in the market and how do you get proper insurance to match your cruising plans?

How bluewater cruising insurance works

First, let’s look at who you are dealing with when you try to get your yacht insured for a trip to the Med, the Caribbean or a circumnavigation.

The insurance company covers your yacht: they write the cheque when there are damages to it or when you’ve caused damage. All this depends on the conditions that you agreed to when taking the policy, but in general, you don’t deal with the insurance company directly when you try to get insurance for a bluewater itinerary. Unlike car insurance, boat insurance is a very specific product and it requires a tailor made approach. Most likely you’ll do business with a broker or an underwriting agent.

Uninsured yacht owners could face enormous salvage, repair and environmental damage costs if the worst should happen. Photo: Ben Welsh Premium/Alamy

The broker considers you, your boat and your plans and presents this ‘package’ to several insurance companies. A single insurance company may want to insure you, but it could also be a syndicate of insurers: each insurer accepting a certain percentage of the risk presented by your package.

There are different kinds of brokers; the difference lies in the amount of work they take off the hands of the insurance companies. If the broker is just helping you to get cover for your beautiful blue water itinerary, you’ll get a policy with the header of the insurance company. If the broker does a lot more work, for instance manning phone lines for 24/7 assistance and handling of claims, you may find their company name at the top of your policy. Brokers that take the most work off the hands of the insurers are called managing general agents (MGAs).

What has changed?

Why has it become more complicated to get yacht insurance for blue water voyages? Mike Wimbridge, managing director of Pantaenius UK, explains: “Yacht insurance for offshore itineraries has always been a tailor made market. And we see that, in recent years, there has been less appetite from the insurance companies when it comes to yacht insurance in general. For coastal cruising in UK waters, things are still fairly easy to insure. But for more bespoke risks like insuring a bluewater cruise, we see that the market is nervous.”

There are several reasons behind this change, Wimbridge says. “Up until 2017 this was a highly competitive market, so prices were as low as possible. It then became untenable for many insurers, especially when a few big windstorms tore through areas where lots of yachts were stored.

“Insurance companies and their reinsurance companies pulled out of the market, leaving a few behind who needed to safeguard their financial situation. So the premiums and deductibles rose. Things are stabilising now, but we still see slight increases annually.”

There are other factors at play. The effects of climate change mean extreme weather events happen more often.

Sailing off the beaten track can be challenging to insure. Photo: Janneke Kuysters

The typical consumer profile has also changed. In the past, yacht owners usually set off on passage armed with sextants, paper charts and a wealth of experience. Nowadays it has become a lot easier to get started – thanks to everything from computer-based navigation systems to powered sail handling – so owners can set off on a bluewater cruise with less experience.

At the same time, boats have become larger and potential claims more expensive: a single lightning strike can destroy tens of thousands of pounds worth of electronics, so it’s perhaps understandable insurers can be nervous to write bespoke policies.

However, there are signs that the market is rebalancing. Ric De Cristofano, director of underwriting with Topsail Insurance, says: “The good news is that the insurance market is cyclical: it will bounce back. I think we have the worst time behind us and we’ll see that insurers become more open to write policies for bluewater cruising yachts.”

How to get bluewater cruising insurance

If you are looking for insurance for a bluewater itinerary, Wimbridge says, “Getting a quote is getting harder and harder. You have to ‘pitch’ yourself, your boat and your plans to the insurer. The broker can help you to do this or you can select a carrier that has staff on hand who are experienced in this area. Things like your sailing CV, diplomas and those of your crew, previous long passages that you have successfully undertaken, and technical or managerial skills that will benefit your sailing, are very important to mention.

“When it comes to the boat: the more seaworthy, the better. There is no real threshold when it comes to boat value, but a well found yacht that is suitable for offshore cruising is paramount to get insurance.”

“We have added a maintenance log to our ‘pitch’ to get insurance,” say American cruisers Jason and Nicky Wynn (see gonewiththewynns.com). “This has added to the success of securing insurance for our boat.” Keep receipts and take photographs as proof of upgrades and repairs, and record a log of routine maintenance.

“The third element in your ‘pitch’ is your itinerary,” continues Wimbridge. “The Atlantic and Pacific are well-cruised areas where insurers can assess the risk they are writing. But if you’re heading around Cape Horn or further afield in the Indian Ocean, premiums will rise. So with your choice of itinerary you can influence the height of your premium and insurance conditions.”

Hurricane damaged yacht. Photo: Pantaenius

In general, insurers are not keen to cover your yacht if you sail in areas with a cyclone/hurricane risk. They have predefined areas and dates which are important to adhere to if you want to stay insured. You will also have a very hard time finding insurance to sail in areas with political instability, war or threats of terrorism. War Risk zones are internationally acknowledged areas where even large commercial ships pay breathtaking insurance premiums.

De Cristofano adds: “Start looking for an insurer at least six months before you plan to leave. Have a chat with your broker to see if they will be able to find insurers that will cover your itinerary. Give yourself ample time to put your ‘pitch’ together and to discuss possible alternatives with your insurer that will lead to a policy that fits your budget.

“It pays to negotiate about the deductible: if you are willing to accept a higher deductible, this may make a significant difference in the premium you will be paying, because it signals to the insurer that you have confidence in your yacht and your skills to maintain it properly.”

However, Wimbridge warns: “Price is not all; think of insurance as a partnership with the insurer. The cheapest policy may not do what you need it to do when you are in trouble on the other side of the planet. You need an insurer who has the knowledge and the capacity to get help to you where you are: spare parts, technical assistance or even worst case, salvage. A lot of the cheaper insurance options will require hiring a third party provider locally, which may present all sorts of cultural and language barriers. So look at the quality of the policy.”

Real world solutions

Bill Garlick is a well known name in the cruising community: many boat owners who have sailed to the other side of the world and run into trouble with their insurance get help from Bill at The Marina Shop in Opua, New Zealand.

“The marine insurance market had a monumental dislocation at the end of 2018 when many Lloyds pleasure craft syndicates closed their books,” Garlick explains. “The lost capacity created a worldwide shortage of marine insurance for pleasure craft. Cover was difficult to find and premiums started rising. Around 95% of our clients were insured with Lloyds at the end of 2018 and those now with Lloyds can be counted on one hand. A number of insurers stepped in to fill the abyss which meant brokers and clients had to deal with new policy wordings and cruising parameters. By the end of 2019 most clients were placed with new insurers.

Keeping a log of regular maintenance can be helpful. Photo: Janneke Kuysters

“A consequence of the contracting market is that marine insurers have tighter criteria and marine insurance is more difficult to secure. Older (30 years-plus), smaller (under 40ft) and low value boats (less than US$100,000) are difficult and sometimes impossible to insure. Standing rigging must be no more than 10 years old (a rig inspection and report is no longer acceptable), surveys are generally required when an insurer takes on a new risk unless the vessel is a relatively new factory production model.”

He adds: “Registration is now the key factor in securing marine insurance. Many insurers are not registered in all countries/jurisdictions so they can only offer cover to certain flags. Choosing a flag is now the decision that determines which – if any – insurers can offer terms.”

Claudia Masson, CEO of the specialised German yacht insurance broker Preuss, says Brexit has also had an impact on European brokers: “Since Brexit, it is no longer possible for us to insure a UK registered yacht with a UK owner. We’ve had to cancel all the policies of our UK clients; this has limited the amount of alternatives there are for UK boat owners.”

“Lightning, windstorm and saltwater damage to electronics and electrical systems are problematic,” adds Garlick. “Many marine insurers simply refuse to offer cover for these risks and others mitigate their exposure by offering high excesses/deductibles.”

Go uninsured?

Every year a number of cruising yacht owners decide to sail uninsured. There are several reasons for this, but usually it’s because of budget constraints or simply because they cannot find an insurer.

But there are considerable risks to going uninsured. First of all, some countries will not let you enter or leave without at least liability insurance – Panama being one example. The same applies to most harbours or marinas.

But the most important thing to consider when you sail uninsured is whether you can afford to lose your boat and equipment. Would being uninsured likely change your behaviour – would it make you less likely to issue a Mayday? In the case that you hit a reef, could you finance the cost of salvage and repairing environmental damage? Or the liability if you accidentally hit another yacht or a swimmer in the water?

“If you are considering sailing uninsured, there are insurers in the UK that will accept yachts for just the liability insurance,” says Ric De Cristofano of Topsail Insurance.

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Establish Risk Location

To identify the territory of regulation and tax of a marine risk consider:

• The nature of the cover provided;
• The jurisdiction in which the vessel is registered;,
• The physical location of the property; and
• The location of the insured’s residence(s) or business establishment(s).

Ship’s hull and ship’s liability Yacht hull and liability Marine cargo Charterer’s insurance Bareboat charters Vessels under construction Mortgagees’ insurance Mortgagees’ interest insurance (MII) Mortgagee additional perils (MAP) Mortgagee’s financial loss Kidnap and ransom (vessels and ship’s crew) Carrier’s liability Ship’s crew personal accident cover

Ship’s hull and ship’s liability

Ship’s hull insurance covers physical damage to a ship’s hull and machinery. Ship’s liability insurance covers risks associated with the operation and use of ships, e.g. carrier’s liability and other associated third party liability.

The risk location may be determined by one or more of the following factors:

• Physical location of the vessel (place of operation)
• Jurisdiction in which the vessel is registered
• Location of the insured’s residence or business establishment

Please see the territory specific guidance on Crystal for specific risk location rules.

It is possible for a contract to have more than one risk location, if, for example, it covers more than one vessel, and the insured vessels are registered in more than one jurisdiction. It is also possible for the risk location rules of different territories to overlap, i.e. where one territory determines risk location by insured’s business establishment and another territory determines it by vessel registration. Therefore a single vessel can have multiple risk locations. 

Yacht hull and liability

Yacht insurance covers losses arising from physical damage to the yacht’s hull. Yacht liability insurance covers owners and operators of yachts for third party liability.

The risk location can be determined by any one or more of the following factors.

• Location of the insured’s residence or business establishment Please see the territory specific guidance on Crystal for specific risk location rules.

Marine cargo

Marine cargo insurance covers losses arising from physical damage to cargo and related liabilities whilst it is in transit by sea and for up to 60 days whilst in storage. (After 60 days it will be seen as Property - Standalone storage.)

The risk location is usually the territory in which the insured is resident or its business establishment is situated. However, in a few instances, where the goods are physically situated or being transported to and from will also create a regulatory and tax location of risk.

If the contract covers more than one business establishment, and the establishments are located in different territories, the contract will have more than one risk location.

Charterer’s insurance

Charterer’s insurance covers an insured for risks associated with the charter of a vessel.  The charterer does not have an insurable interest in the vessel but their risks associated with the use of the vessel fall under the ship’s liability insurance classification.

• Charterer’s liability insurance covers the charterer for liabilities to the ship owner (hull damage) and to third parties.
• Charterer’s interest insurance covers the charterer for loss of future income if the vessel becomes a total loss during the voyage.
• Charterer’s loss of hire insurance covers loss of earnings if the vessel is sub-chartered and the voyage is restricted due to hull damage.

Where the policy is written in relation to a specified vessel the risk location is determined in the same manner as ship’s hull and liability (see above).

Where the vessel is not specified or is unknown the risk location is the territory in which the insured is resident or its business establishment is located.

Bareboat charters

Bareboat charters insurance covers the interest of a charterer when he has complete control of a vessel. Under a bareboat charter the charterer has an insurable interest in the hull.

The risk location is determined in the same manner as ship’s hull and liability (see above).

Vessels under construction

Vessels construction insurance covers physical damage to a vessel during the course of its construction and includes third party liability. The insured is normally the ship builder but can be anyone with an insurable in the vessel, including the party that commissioned the vessel. Until launch a partly-constructed vessel is classified as moveable property.

Post launch

Mortgagees’ insurance, mortgagees’ interest insurance (mii).

MII covers the lender’s interest in the underlying asset i.e. the hull. The policy will respond where the owner’s hull insurance fails.

Where the policy is written in relation to a specified vessel the risk location is determined in the same manner as ship’s hull (see above).

Where the vessel is not specified the risk location is the territory in which the insured’s business establishment is located.

Mortgagee additional perils (MAP)

MAP insurance covers mortgagees against the risk of loss arising when a vessel is responsible for pollution and the vessel owner’s liability exceeds the limits of their liability insurance. In such circumstances the vessel may be seized by the claimant to satisfy the liabilities for the event.

Mortgagee’s financial loss

Mortgagee’s financial loss covers a mortgagor’s inability to repay their loan. This is a financial interest rather than a hull interest.

The risk location is the territory in which the insured’s business establishment is located.

Kidnap and ransom (vessels and ship’s crew)

Kidnap and ransom insurance provides cover in the event that a ship is seized and /or its crew are kidnapped. The insured is normally the ship owner or operator.

Where the vessel is not specified or is unknown the risk location is the territory in which the insured is resident or its business is established.

Carrier’s liability

Carrier’s liability insurance covers a ship owner’s or operator’s liability in respect of losses arising from damage to cargo or related liabilities while the cargo is in their care and in transit.

Ship’s crew personal accident cover

Ship’s crew accident insurance provides cover in the event of death or injury to a member of a ship’s crew. The insured is normally the ship owner or operator.

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Lloyd’s International Trading Advice are the primary point of contact for advice and information on Lloyd’s trading status worldwide.

California Sees Two More Property Insurers Withdraw From Market

By Nadia Lopez

California’s already strained property insurance market is facing a new challenge as two more insurers, Tokio Marine America Insurance Co. and Trans Pacific Insurance Co., plan to withdraw from the wildfire-prone state entirely starting in July.

The two companies, units of Japan-based Tokio Marine Holdings Inc., disclosed their plans in filings submitted to the California Department of Insurance . They said the decision will affect 12,556 policies with premiums of $11.3 million.

The companies didn’t cite a reason for pulling out of the market, but major insurers across California are ending or reducing coverage as the state grapples with risks ...

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What is a long-term care insurance cash policy?

By Joshua Rodriguez

Edited By Matt Richardson , Angelica Leicht

April 16, 2024 / 12:46 PM EDT / CBS News

Have you thought about purchasing  long-term care insurance ? With  most American retirees needing long-term care  at some point in their retirement, it's important to plan for the cost of that care. And that  care isn't cheap . Though long-term care insurance can help cover that cost , different policy types may do so in different ways. 

With more than one type of long-term care insurance to choose from, it's important that you purchase a policy that meets your needs . And, if you're looking for a policy that gives you the most flexibility in the types of care you receive and how your benefits are used, a long-term care insurance cash policy may be what you're looking for. But what exactly is a long-term care insurance cash policy and how does this policy differ from traditional long-term care insurance options?

Compare your long-term care insurance coverage options now . 

Long-term care insurance cash policies, also commonly called cash benefit policies, cash indemnity policies or cash disability policies, are a form of long-term care insurance that provides a predetermined daily or monthly cash benefit while the insured party is in need of care (up to the policy's coverage cap).

Traditional policies typically either pay qualified care providers (like nursing homes or home health aides) directly or reimburse you for the money you pay to those providers. Since long-term care insurance cash policies pay a set amount of cash per day or per month when you need long-term care, you have more flexibility in determining the type of care you'll use your benefits to pay for.  

Find out how affordable a long-term care insurance cash benefit policy can be now . 

How does a long-term care insurance cash policy work?

Long-term care insurance cash policies work just like traditional long-term care insurance policies in many ways. When you purchase either type, your premiums and ability to qualify will be affected by your age, health status and other factors relating to the risk the insurance company accepts when writing your policy. Both of these policies also help pay for the high cost of long-term care if you need it. 

However, there are also significant differences to think about. 

Most traditional long-term care insurance policies either reimburse you for the cost of your long-term care or pay your care providers directly. However, long-term care insurance policies with cash benefits usually pay the policyholder a preset cash amount for each day they meet the benefit trigger (whether they receive paid care or not on those days). That's an important difference for a few reasons. 

"Cash indemnity benefits in LTC insurance policies provide a tremendous amount of flexibility and simplicity at claim time versus reimbursement benefits," explains Kelly Augspurger, CLTC, CSA, and trainer for Certification for Long-Term Care, a firm that provides certifications for long-term care insurance agents. 

That flexibility is especially important for those who want to age at home and depend on informal caregivers  (like family members or friends). "With cash benefits, you can pay whoever you want: family members, friends, neighbors, professionals, etc. Heck, you can even pay robots in the future, if they provide care! This means you have the flexibility to pay formal and informal caregivers," says Augspurger. 

Long-term care insurance policies with cash benefits may make it easier to receive your benefits, too. "Cash benefits also simplify receiving benefits because they send you your full monthly benefit, regardless of care expenses, and don't ask for evidence of your care expenses," Augspurger says. 

Also, a cash benefit policy could provide supplemental retirement income beyond the cost of your long-term care. For example, say your monthly insurance benefit is $6,000, but you only need $5,000 per month in care. "With cash benefits, the insurance company will send you the full $6k," says Augspurger. "However, reimbursement policies will only reimburse up to your monthly benefit. In the example above, the insurance company will only reimburse you $5k."

So, in the above example, a cash benefit long-term care insurance policy could add $1,000 in supplemental income to your monthly budget once a long-term care event takes place. 

Then again, there are a couple of caveats to consider before you choose a cash benefit long-term care insurance policy: 

• Policies with cash benefits may have higher premiums than reimbursement policies. 
• You may have to pay income tax  on any cash benefit you receive that you don't use to pay for qualified long-term care services. 

The bottom line

Choosing between a cash benefit and traditional long-term care insurance policy can be difficult. While cash benefit policies may be more expensive and can come with tax implications, they usually give you far more flexibility in how your benefits can be used than traditional policies. If you're not sure which policy type is right for you, reach out to a long-term care insurance professional now to discuss your options .

Joshua Rodriguez is a personal finance and investing writer with a passion for his craft. When he's not working, he enjoys time with his wife, two kids, two dogs and two ducks.

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Globe Life Insurance Review

Globe life controversy, globe life insurance plans available, how much does globe life insurance cost, how to file a claims with globe life insurance, globe life insurance faqs.

• Why You Should Trust Us

Globe Life Insurance Review 2024

Affiliate links for the products on this page are from partners that compensate us (see our advertiser disclosure with our list of partners for more details). However, our opinions are our own. See how we rate insurance products to write unbiased product reviews.

Planning for the future is the foundation that continues to draw customers to life insurance companies like Globe Life. Since 1900, Globe Life has helped individuals to face the unexpected and ensure a secure financial future for loved ones.

• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Affordable pricing on whole and term life insurance products
• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Available in all states except Massachusetts, Minnesota, New Jersey, and New York
• con icon Two crossed lines that form an 'X'. Whole life insurance death benefits are limited
• con icon Two crossed lines that form an 'X'. No options for investment or accelerated death benefits
• con icon Two crossed lines that form an 'X'. No claims filing options online

Life insurance is more diverse than ever before. Its foundation remains supporting families after the passing of a loved one. Globe Life issues 16.8 million policies, more than any of the nation's leading life insurance companies. But volume is only part of the picture.

Globe Life's zero-risk, money-back guarantee makes its policies an excellent fit for middle-income individuals looking to purchase directly from the company with no medical exam and short wait times. In addition, with benefits topping out at just $100,000, life insurance coverage from Globe Life is a good choice for individuals looking to supplement existing or employer-provided life insurance and those seeking coverage for additional family members.

However, even the best no medical exam life insurance doesn't always mean guaranteed acceptance. Buyers should expect medical questions, and the company may request medical records. Its underwriting decisions, especially for more comprehensive policies, will factor in this medical data.

Globe Life's forte is low-cost funeral plans, and customer reviews indicate it delivers on its promises. Kathy of Londonderry, OH, left a review on ConsumerAffairs after losing her 19-year-old grandson, saying, "I am so thankful to Globe Life. We could not have taken care of him without the policy. The funeral cost were paid very quickly with no stress of me handling anything and I could stay focused on what needed done."

Globe Life has been under pressure due to a series of investigations and lawsuits alleging a toxic work environment, deceptive consumer practices, and fraud. Its stock plunged about 50% in mid-April 2024 after a short-seller issued a scathing report describing, among other things, a work culture, "permissive of sexual assault, rape, racism, and widespread illicit drug activity" within American Income Life, a subsidiary of Globe Life. Globe Life denied the allegations, saying in a statement  that the short-seller "mischaracterizes facts and uses unsubstantiated claims and conjecture to present an overall picture of Globe Life that is deliberately false, misleading, and defamatory."

In March 2024, the Department of Justice subpoenaed AIL and Globe Life for documents related to Arias Organization, an affiliate insurance agency. The DOJ investigation, as well as two open investigations conducted by the Equal Employment Opportunity Commission, appear to be ongoing. 

Globe Term Life Insurance

Globe Life offers term life insurance coverage ranging from $5,000 to $100,000. Policies are purchased directly from the company with no medical exam and quick underwriting. Once your application is approved, Globe Life benefits and monthly premiums remain fixed when policyholders make payments on time.

Like any other term policy, Globe Life's policies expire after the set term. Globe Life mentions converting term policies to whole life insurance policies to make coverage permanent. But the website is light on details, focusing on extremely low premiums for specific customers. Globe Life's term life policies are available for adults and children. All applications are subject to underwriting approval. So the pricing listed online (and your acceptance) may vary when you secure the policy.

Globe Whole Life Insurance

Globe Life offers whole life policies with benefits from $5,000 to $50,000. You can purchase policies directly from the company with no medical exam and no long wait times. Rates remain constant for life, as does coverage (when premiums are paid on time), which means you can rest assured in your chosen coverage.

Remember, Globe Life's underwriting will not approve every application, especially with higher limits. No medical exam does not translate into no medical information required. Buyers will need to answer some medical questions, and the company can pull electronic medical records to make its decision. No medical policies are typically sold to select groups like seniors looking for funeral policies or young, healthy buyers willing to pay higher premiums for lower coverage to avoid a medical exam.

Globe Children's Life Insurance

Whole life insurance for kids (or grandkids) is available from Globe Life in numbers ranging from $5,000-$30,000. Full coverage and benefits begin on day one. Available with no medical exam and zero waiting, a hassle-free policy from Globe Life might be the easiest part of welcoming a new member to your family. Benefits remain constant for life, despite age, health status, or occupation when premiums are paid on time.

As with its adult policies, Globe Life offers children whole and term life insurance options. Applicants who get approval for children's policies can also buy more comprehensive policies as adults. However, these smaller policies offer a gateway into life insurance and its financial benefits early in life. Children's life insurance can be a wealth-building tool, particularly with its whole life policies. It's never too early for financial planning.

It's easy to find comparable adult policies through other companies. However, Globe Life's life insurance for children faces less competition overall.

Globe Final Expense Life Insurance

Many of Globe Life's policies could be considered "final expense" policies. By this, we mean the limits are low and only meant to cover funeral costs and a small amount of debt. However, it provides a specific product for seniors comfortable with lower coverage amounts. As a result, approval is often more straightforward.

This policy type comes with obvious limits (the death benefit). However, buyers should also be aware of other limitations, like the inability to build cash value over time. So no matter how long you live, the value will remain the same.

Additional Coverage Options Offered by Globe Life

Accidental Benefits Insurance

You can prepare for the unexpected and the financial strain that can accompany it with an extra layer of protection. Accidental death insurance from Globe Life provides up to $250,000 worth of coverage in the case of accidental death for just $1 to start. In addition, acceptance is guaranteed regardless of health for individuals aged 18-69. Additional benefits, furnished at no extra cost, include coverage for myriad issues from inflation and education to dismemberment and paralysis.

Accidental death coverage only pays out if you're killed in an accident. Causes could include travel-related accidents, trips and falls, poisonings, etc. It would not cover terminal illnesses, extended injuries after an accident, or dying from old age. Globe life also has a supplemental accidental insurance product. Accidental death coverage helps buyers with ambulance riders, ICU stays, and other medical costs of accidents that don't result in death.

Mortgage Protection Insurance

You can protect your family's biggest asset and a potential source of stress in the event of your accidental death. For just a fraction of your monthly mortgage payment, this type of accidental death and dismemberment policy provides between $50,000-$350,000 to pay off your home mortgage. If the payout doesn't pay off your mortgage, loved ones could then look into options to refinance the smaller debt to lower monthly payments.

Rates start at just $5.50 per month, and acceptance is guaranteed for individuals ages 18-69. Additional benefits, furnished at no extra cost, include coverage in the case of a common disaster or commercially scheduled airline accident, among others.

One important thing to note is this is an accidental death and dismemberment policy. In short, it's not a comprehensive plan for every cause of death. Benefits would only apply after a covered accident. The limits are part of what makes this policy so cheap. It's excellent for a policyholder's prime working years but may not be as beneficial for retirees.

Globe Life's advertised rates are affordable, with types of life insurance  for adults and children starting at $1 for the first month, after which the rate is based on the individual's current age and guaranteed for the policy terms. Unlike some competitors, Globe Life also offers a limited money-back guarantee. If unsatisfied, return your policy within 30 days for a full refund.

Globe Life offers many cheap plans with low payouts. These are great for buyers on a tight budget or those seeking easy approval for a funeral cost plan. However, buyers looking for large plans for retirement or other financial planning would find better products with other companies.

Anyone can file a claim with Globe Life, including a spouse, child, another beneficiary, or a family spokesperson (including a representative from a funeral home). Providing the following information will expedite the claims process:

• Life insurance policy number
• Contact info for the beneficiary
• Official death certificate
• Copy of obituary
• Coroner's and/or police report (in the case of accident, homicide, or suicide)

Once gathered, mail all documents to the following:

Globe Life Inc.

PO Box 8076

Attn: Life Claims Department

McKinney, TX 75070

On average, it takes Globe Life 10-15 days to receive, log and process the information included in the above documents. Please bear in mind processing times can vary. Globe Life representatives will notify you should additional information be needed.

It only takes a few minutes to complete its easy online application. Once approved, Globe Life will send a copy of your policy via mail.

Obtaining additional life insurance coverage for family members is easy with Globe Life's e-ServiceCenter. New applications for adults and children are accessible with your current login information if you have an existing plan. New customers can also apply online or over the phone.

Once you've begun the claims process, Globe Life offers phone and online-based customer service. Call Customer Service at 1-888-650-4081 or visit the company's eServiceCenter to check the status of a claim you've filed.

Globe Life Insurance Competitors

Learn more about Globe Life Insurance and whether it is the right life insurance company for you.

Globe Life vs. State Farm Life Insurance

Globe Life prides itself on simple, standard coverage delivering death benefits topping out at $100,000 compared to more robust options from State Farm . Globe Life focuses mainly on small funeral policies or accident coverage. State Farm offers larger payouts and options like its Survivorship Universal Life Insurance, which covers two individuals. So, for example, a husband and wife could buy a policy, and the value would be based on the couple's combined lifespan and qualifications.

Globe Life scored 798 on the latest JD Power US Individual Life Insurance Study. In short, the company earns consistently high marks from customers. Still, State Farm outranks Globe Life with a score of 843. With State Farm, applicants may have to submit to a medical exam. But the company offers more comprehensive policies to pay out in more flexible circumstances. It also has more permanent life insurance options to meet diverse needs. Most importantly, buyers can bundle State Farm life insurance with homeowners, auto, and other State Farm plans.

As you might expect from its JD Power rankings, State Farm customers have a lot to say about the package it provides. Mb of Palm Springs, CA, left a review on ConsumerAffairs , saying, "State Farm may or may not be the cheapest. However, their customer service is outstanding. They proactively contact me to review my insurance once a year. They always answer my questions quickly and clearly. If they don't know immediately, they are willing to admit they don't know and always follow-up ASAP."

State Farm Life Insurance Review

Globe Life vs. Mutual of Omaha Life Insurance

Globe Life has become known for its quick and flexible whole and term life policies. Especially with its accidental death policies, Globe Life offers no medical exam options with fast approvals. Mutual of Omaha is not quite as cheap. Term Life Express is the company's only option for life insurance with no medical exam. But it comes with significantly higher limits than any of Globe Life's policies for all causes of death (not just approved accidents) up to $300,000. The company's strong financial backing means building cash value is easy, as evidenced by options including Universal Life Insurance (boasting coverage over $1 million) and Indexed Universal Life Insurance (a flexible albeit risky way to build cash value).

Both companies have whole life policies. Again, Mutual of Omaha offers a diverse range of policies with higher benefits. Mutual of Omaha customers can enjoy accelerated death benefits in the event of a terminal disease and other riders. Its underwriting may take longer than Globe Life's, but the higher benefits will pay off in the long run for approved customers. At this time, both companies enjoy high customer satisfaction rankings with JD Power.

Most importantly, Mutual of Omaha will likely never offer the bargain policies Globe Life does. But customers still find pricing reasonable. Wendy of Enola, PA, reviewed Mutual of Omaha on ConsumerAffairs , saying, "I have a practical and effective insurance policy with great and affordable rates. Company has an excellent and easy to use website."

Mutual of Omaha Life Insurance

Globe Life vs. SBLI 

SBLI offers Cherish Life final expense insurance up to $35,000 in coverage with two significant benefits. SBLI customers can apply until age 80, and beneficiaries can use benefits to pay for any of the insured's expenses. Globe Life has a cut-off age of 75 to apply. Both companies offer whole and term life insurance policies. Both companies also have no medical exam life insurance options.

At this time, Globe Life's listed policy limits are low. Most policies cover funeral costs. Plans with higher benefits are mostly accident policies (it only pays out if you die due to a covered accident). SBLI doesn't list its limits on its site. However, it focuses on whole and term life insurance for any cause of death.

The customer reviews tell a great story about SBLI. Trustpilot reviewer Matthew says, "SBLI has always been a notch above all others in the insurance industry. We have had policies with them for about 8 years, and have never experienced anything but great service, honest and candid feedback, and they deliver exactly what they communicate!"

SBLI Review

Why You Should Trust Us: How We Reviewed Globe Life Insurance

Life insurance companies are compared based on product quality, insurance riders, net performance scores, pricing, and customer service. A diverse array of life insurance products is used to compare death benefit plans with life insurance designed for long-term financial planning. Opinions expressed here are wholly based on facts gathered.

Ratings are not decided based solely on marketing or single online reviews. Instead, we gather a broad mix of information to rank all insurance products consistently and fairly. Therefore, the best way to ensure you find the right policy is to utilize a qualified agent when shopping for life insurance.

You can read more about our rating system here .

What Does "No Medical Exam" Mean With Globe Life?

None of the life insurance products at Globe Life require a medical or physical exam. Instead, the insurer uses a series of health-related questions (part of the company's online application) to determine eligibility. Full transparency, especially with preexisting conditions, is essential. Dishonesty of any kind puts the insured at risk of policy cancellation or unpaid death benefits. You may be eligible for a small funeral costs policy even if you're denied a more comprehensive life insurance policy.

Editorial Note: Any opinions, analyses, reviews, or recommendations expressed in this article are the author’s alone, and have not been reviewed, approved, or otherwise endorsed by any card issuer. Read our editorial standards .

Please note: While the offers mentioned above are accurate at the time of publication, they're subject to change at any time and may have changed, or may no longer be available.

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Veterans sentenced for role in $65 million insurance fraud scheme

Two veterans convicted for helping bilk more than $65 million from the military health care program Tricare received prison sentences and orders to pay back millions of dollars they assisted in stealing, the Department of Justice announced Friday.

Marine veteran Joshua Morgan, 31, earned a sentence of 21 months while Navy veteran Kyle Adams, 36, secured a sentence of 15 months for their roles in the multilevel scheme to recruit service members and their dependents to carry out prescription drug fraud, the release said.

The pair convinced troops to receive pricey medications, like prescription creams and erectile dysfunction supplements, in return for a monthly kickback, while others involved in the massive scheme wrote bogus prescriptions and falsified paperwork to process the fraudulent insurance reimbursements.

Court documents said the scam, along with other fraud schemes , put the health care program at risk of insolvency in mid-2015.

“Today’s sentencing closes the last chapter on this outrageous fraud scheme that almost put TRICARE into bankruptcy,” United States Attorney for the Southern District of California Tara McGrath said in the statement.

The former sailor, Adams, brought approximately 88 people into the scheme, according to court documents. Another roughly 28 individuals were directly recruited by Morgan — who was a sergeant in Marine Aviation Logistics Squadron 11, based at Miramar Air Station, California, the documents show.

“It took very little work to sign people up to receive free money,” Morgan said, according to a sentencing court document, in which he also described himself as having been at the bottom of the Marine pay scale, with a large car payment, and badly in need of extra funds.

Morgan netted at least $2.6 million in illegal kickbacks while Adams took home at least $1 million, according to the court documents.

With his cut of the proceeds, Morgan lavishly spent his funds on nightclubs and top-shelf alcohol, the sentencing document continues. He also bought two luxury cars, which were seized by the government.

Fellow recruiter Adams ultimately conceded he “turned a blind eye” to the illegality of the scheme, contending that with the influx of so much money “he was not thinking clearly.”

The pair worked for Jimmy and Ashley Collins, a married couple in Tennessee, who the Justice Department said quarterbacked the scheme. In addition to the millions they were ordered to pay in restitution , Jimmy received a 10-year prison sentence while his wife earned 18 months in home confinement.

Authorities seized numerous items and properties purchased by the husband-and-wife team, and by others, with the proceeds of the fraud. That included an 82-foot yacht; luxury vehicles like Aston Martins; gold and silver bars; and three pieces of Tennessee real estate.

Other patient recruiters were previously sentenced to custody , the release said, as were the medical professionals who wrote the fake prescriptions and dishonestly handled other paperwork. The pharmacy that filled the fraudulent prescriptions, CFK, Inc., also previously pleaded guilty, the release said.

Attorneys listed in court records for Morgan and Adams did not immediately respond to Military Times’ request for comment.

Jonathan is a staff writer and editor of the Early Bird Brief newsletter for Military Times. Follow him on Twitter @lehrfeld_media

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