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A yacht or boat owner always has to insure the vessel. It is not only one of the basic requirements by the financer, but is also advisable so that the yacht or boat owner doesn’t have to foot huge financial losses owing to boat accident. Hence, as a yacht or boat owner, you should subscribe to a yacht/boat insurance policy that covers most common boating/yachting accident related losses. However yacht or boat insurance policies generally don’t cover wear and tear owing to time and usage, scratches, minor dents and like.
If you own a boat, you might want to opt for an ‘all-risk’ insurance cover as it covers losses occurring owing to most common boating accidents. If you own a larger vessel like a yacht, then a Hull Insurance, True Yacht Policy or Protection and Indemnity insurance is recommended.
In case of Hull Insurance, an amount of coverage is pre-decided and the insured gets the amount in the even of a total loss of the yacht. A True Yacht Policy provides the insured with the replacement cost in the event of partial losses. However a true yacht policy exempts a few parts. Most 3rd party liability falls under the umbrella of Protection and Indemnity insurance.
The insurance amount can very from person to person and policy to policy. The yardstick to determine the insurance cover amount would be the price you’ll have to shell out to replace the current vessel with one that’s similar in terms of size, features and quality. Some insurance policies cover damages amounting to replacement cost minus the depreciation. Such policies should be steered clear of, since they will not fund you in replacing your boat or yacht in the event it’s totaled. Some insurance policies, especially for larger yachts even cover yachting equipment and tax. Insurance policies may also cover medical payments, personal injury, towing charges, equipment and 3rd party liability for different amounts.
Some insurance companies offer a ‘lay-up discount’, which means you pay a lesser premium when your boat’s in dry-storage owing to weather conditions prevailing in your area of residence. Also check if your policy dictates who can operate your boat. Sometimes, the policy specifically only covers accidents when the policy holder’s at wheel.
Always check the fine print in the yacht/boat insurance policy so that you know the terms and conditions very well. This is important to ensure that you don’t unknowingly breach them, because in the event of breach the insured stands to lose as the loss would not fall under the scope of the insurance policy. Here’s a list of yacht insurers who are members of the National Marine Bankers Association, to help you get started.
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