All Yacht Policies Are the Same Right?
Wrong! These are two party contracts that are largely unregulated by state insurance departments. In other words yacht insurance companies have a free hand to write exclusionary wording as they see fit. The coverages, and more importantly, exclusions vary greatly from policy to policy. Is vessel damage due to hitting a whale covered? If my boat sinks at the dock due to a through hull failure am I covered? Can I can loan my boat to a friend and still have coverage? Is my boat covered for the Agreed Value on the policy or a depreciated amount?
The answer to all of these questions and many others is the same – maybe yes, maybe no. It all depends on the policy contract wording. Call a Novamar Insurance representative to find out. Before the loss occurs!
Who cares where my boat is moored?
Why do insurance agents ask me for the mooring location of my boat? They don't ask me to tell them when I park my car in a different parking lot. Yacht insurance policies have navigation limits and rates based on areas of navigation. Premiums vary greatly depending on weather conditions, navigational hazards, and availability of repair facilities in various areas around the U.S. and around the world. It is important for insurance companies to know how many boats they insure in a given marina and harbor so that they can monitor their exposure in the event of a catastophe i.e. marina fire or hurricane. If an insurance company and your agent know where their insured boats are located, they can contact their clients to take precautions prior to an impending storm making landfall AND dispatch catastrophe teams to the site after the storm or fire hits to immediately start settling claims.
Am I chartering my boat and didn't know it?
Will taking friends sailing void the "Private Pleasure Warranty" of my policy?
The answer is a definite maybe. One of the warranties or provisions in a standard yacht policy is what is commonly referred to as the "Private Pleasure Warranty". If a vessel owner accepts remuneration in exchange for being aboard the yacht, it can constitute a violation of the Private Pleasure Warranty resulting in a policy that is null and void. If a friend brings along snacks, and drinks am I at risk of losing my coverage? It is best to check with your agent, but generally speaking if a guest brings food, drinks, pays money, or provides any other compensation as a requirement to be aboard your vessel, then your policy is in jeopardy. Ask a Novamar Insurance Group representative or your current agent BEFORE a loss occurs.
Why do I need to purchase Liability Coverage while cruising in Mexican Waters?
The Mexican government requires boat liability coverage to be purchased through a Mexican domiciled insurance company. Because it has become so easy to cruise between the U.S. and Mexico, we sometimes forget each country has its own laws and customs to follow. Mexico's Napoleonic civil liability laws view liability much differently than in the U.S. When a liability loss occurs, it is important to have an insurance company appointed adjuster communicate on your behalf with the authorities immediately. Without it, you are subject to fines, arrest and your yacht maybe detained indefinitely until the situation is remedied.
How important is it for me to provide accurate information on my Yacht Insurance application?
Very important! Insurance policies are contracts between the client/insured and the Insurance company. Rates and conditions are base don information on the application plus additional documents required by underwriters. You never want top ut yourself in a position in which an Insurance company can deny a claim due to misrepresentation. Always be honest and complete in your answers.
One of the most important assets of a yacht is the crew. To have the right protection for them in a yacht insurance policy is a must. If a yacht owner pays a person to act as captain or help crew the vessel then the vessel owner will have legal obligations under the Jones Act and other benefits under Maritime law protecting paid crew.
Some policies include incidental crew liability coverage, many do not. A crew member compensated with airline tickets, hotel rooms,or money, may be considered paid crew entitling him/her to federal benefits under the law. In admiralty law, a vessel can be sued in rem (in place of) the vessel owner. Creating ownership entities, charter agreements between parties, etc. does not eliminate or transfer this exposure. Lack of crew liability coverage can be costly. Call a Novamar Insurance representative or your current agent and find out if you are properly covered BEFORE a crew injury occurs.