THE BASICS OF YACHT INSURANCE
There are two sections on a typical Yacht insurance policy – physical damage and liability!
Physical Damage generally pays for repairs to your yacht as a result of a covered loss, The best coverage is “all risk” coverage. Which means if the cause of loss is not specifically excluded – it’s covered!
Loss Settlement – Agreed Value vs. Actual Cash Value
This is the most significant difference in yacht policies.
Agreed Value normally pays the amount shown on the policy if the yacht is a total loss. Partial losses are paid for on a replacement cost (new for old) basis.
Actual Cash Value provides less coverage, 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. Partial losses are usually reduced based upon. Based upon depreciation of the lost or damaged items.
Liability
Protects the yacht owner for claims of bodily injury and property damage to third parties caused by the operation of your yacht. You may also be responsible for any containment and clean-up expenses resulting from oil pollution or contamination caused by your vessel. Yacht owners are liable under the Oil Pollution Act of 1990 up to the statutory limit (current $939,800)