/ YACHT INSURANCE
Homeowners policy provides only limited coverage for watercraft.
Property coverage is subject to a special limit of $1,000,
and coverage may be totally excluded for certain perils. Liability
coverage is excluded for boats with motors of more than specified
horsepower or boats of more than a specified length.
typically need more coverage for this exposure than that provided
by the Homeowners policy, particularly those who own larger
or more powerful boats. This coverage can be provided through
Inland Marine forms, Ocean Marine policies or specialized
of the type of coverage purchased, certain conditions
and exclusions are almost always part of a Personal Watercraft
policy. They stipulate that the craft must be used solely
for private pleasure purposes, and that coverage will not
apply if the boat is hired out, chartered or used to transport
people or property for a fee. Coverage is usually excluded
when the watercraft is being used in an official race or speed
contest (unofficial events are not excluded).
Package policies, developed by individual insurance
companies, combine Property, Liability and Medical Payments
insurance on an open peril basis. They are used to insure
boats under a specified length - such as 30 feet - or under
a maximum dollar value, such as $25,000. Losses are usually
paid on an actual cash value basis.
Motor And Boat insurance can be written to cover the physical
damage exposure of boats. This insurance is commonly provided
under open peril Inland Marine floaters. Outboard policies
typically cover motors, motor boats, accessories, and trailers.
Losses are usually paid on an actual cash value basis. Many
provide a limited amount of coverage for collision damage
to another vessel. When these policies are written, it is
customary for the insured to have Liability coverage under
a Homeowners policy or separate Liability policy.
Yacht policies are Ocean Marine forms that provide a package
of auxiliary power, and large pleasure boats are insured under
Personal Yacht policies. Smaller boats that are in good condition
and have some value may also be covered under these policies.
smaller vessels are insured on a Personal Yacht form, coverage
is usually limited to Property coverage on the hull, with
or without coverage for a trailer. The Liability exposure
is usually covered under a Homeowners or separate Liability
policy. Owners of larger vessels are more likely to purchase
the complete package of Yacht coverages, which includes:
Hull insurance (pays replacement cost for partial losses and
on a valued basis for total losses)
Boat trailer insurance (pays on actual cash value basis)
Protection And Indemnity (a form of bodily injury and property
damage Liability insurance)
Medical Payments coverage
Federal Longshore And Harbor Workers Compensation insurance
(provides benefits for maritime workers)
is usually provided on an open peril basis.
coverage on a Yacht policy contains a collision clause, which
covers the insured’s liability for collision damage
to other vessels. This is an additional amount of insurance,
and it is equal to the amount of coverage written on the hull.
P & I coverage for collision damage to another vessel
begins after the insurance provided by the collision clause
water skiing clause commonly excludes coverage for any person
skiing or otherwise being towed by the vessel until they are
back on board or have landed safely somewhere.
layup warranty applies when the yacht is located in a safe
berth for storage and is not being used, such as during the
winter months. It provides for a return of premium because
of the reduced risk of loss.
Yacht policy has navigational limits, a clause that defines
an area in which the yacht is permitted to operate. Losses
that occur outside these limits are not covered unless the
insurer has granted permission for the insured to do so.
note that the precise coverage afforded is subject to the
terms, conditions, and exclusions of the policy as issued.
This explanation is intended only as a guideline. This information
is not intended to be considered investment, tax or legal
advice. It is provided, for your education only. This is not
an insurance contract. All terms and coverages are defined
solely by your policy.
more details, please call a PaulBalep representative toll-free
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quote. Like so many satisfied clients, we think you’ll
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