Need to Know

Understand your insurance policy-and your insurer-before a claim arises.


Like seemingly everyone in the marine industry, insurance brokers and underwriters are navigating a market of shifting yacht values. The key to protecting yourself is making sure your yacht is covered the way you want it to be. Reading your policy is one way to do that, but if you're setting up new coverage or considering your existing coverage, you should ask pointed questions of your insurance provider. The answers you get in return will let you know if you're headed in the right direction.

So where does one begin? First things first: Figure out if you're talking to the right company. "Consider the financial strength and solvency of the insurance carrier and how long they have been in the yacht insurance marketplace," says Mark Zadrick, assistant director of Travelers Boat and Yacht Division ( "Find out if the insurance provider specializes in yacht insurance or just dabbles in it." A company that understands the needs of yacht owners can set up coverage tailored to the value and use of each specific yacht.

As we've all seen, yacht values are subject to market changes, and that has an impact on what kind of insurance you should carry. "Just as the value of a boat today may have dropped maybe 30 percent, in another year the boat may increase in value," says Cary Wiener, president of Pantaenius America Ltd. ( "The result is that the owner may find himself not able to replace the boat [with the replacement value outlined in his insurance policy] in a market on the upswing. Underwriters don't like to increase the value of a boat once they're insuring it, unless there have been monetary improvements made." A combination of survey reports of the condition of the yacht, market research of online pricing of similar vessels, and sales history should be able to establish a replacement value upon which all parties can agree. But be careful not to revise the value downward to cut costs now, only to be underinsured later.

The point is to have enough coverage when push comes to shove. So if you are going to manage your yacht differently than you have in the past-and that has been happening quite a bit in this economy-you should make sure your insurer knows about it.

"The more you communicate, the more you disclose, the better chance you have of having coverage when you need it," says David F. Allen, senior vice president of Allied Marine Risk Managers Inc. in Ft. Lauderdale [(800) 441-7755]. "It is easy to tell a company too little; it is impossible to tell an insurance company too much. Never give an insurance company the opportunity to avoid paying a claim. And the way they can avoid paying a claim is by you making changes to manning, mooring, or use [of your yacht] without discussing this with the insurance company."

And when you tell your insurer about the changes to the way you use or manage your yacht, don't be surprised if the company representative has some feedback. While you may be trying to cut costs, your insurer will make certain stipulations to keep you covered.

"It's the best way to maintain coverage in a difficult market," says Allen. "But if you make these changes in a vacuum without talking to your agent, and clearing it with the company, when you need [your insurer] the most, you may not have them."

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Additional Yacht Insurance Resources AIG Private Client Group; Allied Marine Risk Managers, (800) 441-7755 Atlass Marine Insurance; Pantaenius; Progressive; Travelers;