The D.C. area is a haven for yacht owners, from the boat-friendly waters of the Chesapeake Bay to the striking scenery and presidential landmarks along the Potomac River. With spring here, yacht owners in the D.C., Maryland and Virginia region are preparing to take their vessels out of winter storage.
Before you launch your vessel, take the time to review your yacht insurance policy. Doing so is just as important as ensuring your vessel is seaworthy. Make sure the policy’s layup period, navigation territory, liability limits and deductibles align with your needs to prevent costly surprises if an incident occurs.
The Layup Period and Early Launch Risks
Yacht insurance policies typically include a layup period during which coverage is reduced while the vessel is in storage. This period typically spans the winter months when the yacht is not in use. If you launch earlier than the date specified in your policy, notify your insurer to update your policy to prevent a potentially denied claim, reduced coverage or even policy renewal.
For example, let’s say the policy specifies that your yacht will remain in storage until April 1, but you decide to launch it on March 1. If an accident results in damage to the vessel before the official layup period ends, you may not be covered.
Speak with your insurance advisor before moving your vessel out of storage to verify the policy times or change the layup period. Not all yacht policies are the same and vary depending on the insurance company. Be sure you understand the policy terms and conditions and any changes you can make.
Understand Navigation Territory Restrictions
The areas around Annapolis, the Potomac and the Chesapeake Bay are popular yachting regions, but many yacht owners also travel south to Florida and the Caribbean or north to New England and Canada. If your policy has a defined navigation territory and you operate outside of it without notifying your insurance company, you may face coverage gaps in the event of an accident.
Some insurance providers offer broader navigation territories, while others may limit coverage to the Chesapeake Bay and its tributaries. If your upcoming voyages extend beyond your current policy’s navigation territory, speak with your insurance professional to update it before you set sail.
Are You Covered If You Hire a Captain or Crew?
You may decide to hire a licensed captain and crew for a long voyage down the East Coast to Florida. Be sure your policy provides proper coverage if you employ staff for your yacht. If an incident occurs while a hired captain is at the helm, coverage could be denied depending on your policy terms and conditions.
Extending Coverage with an Umbrella Insurance
The financial consequences can be significant if you’re involved in a serious yachting accident or a legal dispute stemming from an injury on your vessel. This is particularly true when legal fees or medical costs exceed your standard liability policy. That’s why having an umbrella insurance policy is so important. If you don’t already have one, it’s worth a serious look.
An umbrella policy provides an extra layer of liability protection that kicks in when the limits of your yacht policy are exhausted. While standard yacht insurance includes liability coverage for property damage or injury caused by you, the limits may not be enough in a worst-case scenario. If you own a high-value yacht or frequently host guests, an umbrella policy is a wise investment to protect against large liability claims.
Know How Your Deductibles Work
In addition to the overall limits on a yacht policy, it’s essential to understand the policy deductible. This is the amount of money you’re expected to pay for a loss before your insurance steps in. Some include percentage-based deductibles for specific events, such as hurricane damage. For example, if your yacht is insured for $1 million and your hurricane deductible is 5%, you could be responsible for $50,000 in repairs before the policy kicks in.
Before You Head Out on the Water
Bringing your yacht out of storage signifies months of adventures and enjoyment, but failing to review your insurance policy can lead to unexpected losses. By reviewing your policy with an insurance advisor, you can confidently enjoy the upcoming yachting season, knowing that your vessel is protected on the waters of the Chesapeake Bay and beyond.
Contact HWP Insurance to review your yacht insurance to protect your vessel.
About HWP Insurance
HWP Insurance is a leading insurance agency specializing in offering customized solutions for successful individuals and families.. With a strong presence in Washington, D.C., Annapolis and Southern Maryland, we offer guidance to protect what matters most. Learn more at hwphillips.com.
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