PRE-OWNED: FACTOR IN SURVEYS
If you are buying a pre-owned yacht the lender will generally, depending on age of the yacht, require a survey and will base coverage on the value and replacement value reported on the survey.
As a very general rule, the annual premium for "private use" coverage (vs. charter coverage) is 1.5% of the declared hull value. So, a $100,000 yacht will cost $1,500/year to cover for Florida-Bahamas use. Insurance for a charter yacht will be more expensive as you will need higher liability coverage. Rates will range from 1.6% to 1.9% of declared value.
Tip: Most yacht policies are for an "agreed upon" value. That is, if there is a total loss, then you are paid the "agreed upon value" with no deductions. Beware of the "actual cash value" policies wherein the underwriter can deduct substantially for depreciation and other reasons. Beware of "Exclusions" ("weasel clauses" that allow the insurer to disallow payment) and always buy an "All Risk" policy (vs. a "Named Peril" policy).
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INSURANCE RATES WILL FLUCTUATE
Insurance rates will vary depending on use. If you plan on crossing the Atlantic in the distant future and/or possibly living on-board, don't tell your insurance company now, because your rates will reflect this additional coverage now… Wait until your plans are 100% confirmed. Often with a simple phone call, your insurer will make those changes for you just prior to your trip or lifestyle changes. You may owe an additional up charge to cover the increased coverage.
WATCH THE NON-SPECIALIST INSURERS
Often an insurer that does not specialize in yachts will offer lower priced coverage with fewer restrictions.
If you already have automobile or homeowner's coverage through Allstate or State Farm then they can add your boat at a very low rate. The drawback to these insurers is that they generally do not offer navigation coverage outside of the U.S./Canada and the Bahamas and some of them have a large list of "Exclusions" or are "Actual Cash Value" policies.
After Hurricane Andrew devastated many yachts in Miami, We were surprised to see the Allstate adjusters walking the docks and writing settlement checks three days after the hurricane!
Right there on the dock! No haggling, they just paid whatever the policy called for.
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