Boating is a popular pastime that more and more people seem willing to try each year. Many boating enthusiasts become so enamored with the hobby they decide to own their own yacht. However, many boaters take the plunge into yacht ownership without performing all the research that is needed. This includes understanding why insurance for their yacht is an absolute necessity.
Limited Coverage with Homeowners Insurance
Many yacht owners mistakenly believe they do not need insurance designed specifically for their yacht. It is a common misconception that homeowners insurance will suffice. A homeowners insurance policy will offer limited coverage for any damage your yacht incurs while on your property. However, this coverage will likely be insufficient to restore your yacht and you will not be protected at all when your yacht is either in use or being stored at another location.
Personal and Property Protection
A good insurance policy for your yacht will provide you with the peace of mind from knowing you, your property, and guests on your vessel are covered in the event of a mishap. This coverage includes:
- Collision Damage – Your yacht will be repaired or replaced if it becomes involved in a collision.
- Liability for Bodily Injury – Provides you with coverage in the event another person is injured as a result of an accident involving your yacht
- Liability for Property Damage – Provides you with protection if another person’s property is damaged in an accident.
- Comprehensive – Provides protection for damage to your yacht from something other than a collision. Examples include theft and vandalism.
Mother nature is a threat to your boat even when it is in storage or not in use. Your boat can sustain damage from natural disasters like fires, flooding, and in some parts of the country, hurricanes. Purchasing an insurance policy that protects your yacht against natural disasters could save you tens of thousands of dollars in the long run.
It is Required
A yacht is a large investment. In most situations, this means you will need to obtain financing for the purchase. It is understandable that a lender will often require you to maintain insurance since they are taking a major risk also. Many marinas will also require you to maintain insurance if you wish to dock at their facilities.
The Bottom Line
Any boat lover will tell you there is nothing like the feeling of owning his or her own yacht. However, there is much due diligence involved with purchasing and maintaining a yacht. Before taking the plunge into yacht ownership, a prospective boat owner should understand the reasons it is a must they maintain insurance for their yacht.