Yacht Insurance 101: What Coverage Owners Actually Need

Boat insurance looks simple until you file a claim. Then the gap between the policy you bought and the policy you needed shows up all at once. Here’s what actually matters when you insure a yacht — and where owners most often come up short.

The coverage that matters

Hull & machinery is the core: physical damage to the boat itself — grounding, fire, storm, collision. Two things to check. Is it agreed value or actual cash value? Agreed value pays a set figure; actual cash value depreciates you at claim time. And what are the named-storm and lay-up warranties — where, and when, are you actually covered during hurricane season?

Protection & indemnity (P&I) is your liability on the water — injury to crew or guests, damage to other vessels or docks, wreck removal, pollution. This is the cover that turns a catastrophe into something survivable. Don’t under-buy the limit; marine liability claims run large.

Crew cover matters the moment you pay anyone to work aboard. Jones Act exposure — and USL&H for larger operations — is real, and a standard pleasure-craft policy may not touch it. Run charters or employ crew? Get this looked at specifically.

Tenders, toys and personal effects are easy to forget and easy to lose. Confirm the tender is scheduled, and that watercraft, dive gear and electronics are covered both on and off the boat.

The gaps owners hit most

How to shop it

Insurance is one of the fixed lines in your cost of owning a yacht, so size it to your actual risk rather than a generic quote. Decide how and where you actually use the boat first — coastal, offshore, chartered, hauled out for winter — then match cover to that. A specialist marine broker will spot the gaps a generalist misses.