Wood Boat and Yacht Insurance

Brought to you by:

W.R. HODGENS
MARINE INSURANCE, Inc.

Wood Yacht Insurance

Wood Yacht Insurance Specialists

2015 SW 20th Street
Suite 100
Fort Lauderdale, FL 33315
(954) 523-6867
(800) 990-WAVE (9283)
(954) 523-6488 Fax
Professional Insurance Agent
 

Wood Boat and
Yacht Insurance
F.A.Q.

(Frequently Asked Questions)

Wood Boat and Yacht Insurance Questions
 
Wood Yacht Question Wood Yacht Insurance Coverage Question:
Does my wood yacht insurance policy cover everything? How can I avoid having a claim or total loss that would not be paid by the company?
Answer:
There is no such thing as a standard yacht insurance policy.
Due to the nature of this kind of insurance, where yachts are mobile and can travel between states and even between countries, there are many policy forms and many differences in the coverage. We strongly suggest you purchase a policy underwritten only with major A rated US or Surplus Lines Companies that are approved to write in the US and are well known companies.
Also it is a good idea to place this coverage with an agent that specializes in yacht insurance to make sure you have all the proper coverage you will need.
Read the policy and if needed, have your legal representation read the policy and advise you so you know exactly what is covered and what your responsibilities are. Pay special attention to the area in the policy that outlines exclusions to coverage that all polices have in the policy wording.
Call your agent with any questions or better still email any questions so you can have a written record of correspondence. No one ever made mistake contacting your agent with questions, that is what we are here for!
It is most important to maintain your vessel diligently and keep all records and receipts for haul outs and any work done aboard. Understand that your insurance company will expect your boat to be seaworthy and read the wear and tear and gradual deterioration sections of your policy. Losses that occur because of a lack of maintenance or no maintenance over a period of time, can result in a company declining to pay a claim.

 
Wood Yacht Question Wood Yacht Hardwood Endorsement Question:
What is a Hardwood Endorsement?
Answer:
A Hardwood Endorsement is an endorsement included in many policies that allows the company to replace any wood components that are involved in a loss or claim, with the best available wood product that is available on the market, when the wood the vessel was built from is no longer available in the current wood market.


Wood Yacht Insurance for Sailboats



 
Wood Yacht Question Wood Yacht Insurance Hull Value Question:
I just paid $450,000 for a yacht but the survey shows a current market value of $430,000. Can I insure for the amount I paid, $450,000?
Answer:
Probably not, as most companies will not insure a vessel for more than the current market value that is in a purchase survey.

 
Wood Yacht Question Yacht Insurance Hull Value Question 2:
Wood Motor Yacht Insurance I just paid $500,000 for my boat and want to insure her for $700,000 as that is what the survey shows as a current market value. I got a good deal! Can I do this?
Answer:
It depends on the company but almost all companies want to insure for the amount you paid for a vessel, at least for the first year. Discuss with your insurance agent at the beginning when you are seeking coverage and explain all the details.
Insurance companies are in the indemnity business, which means if you have a total loss, they will pay an amount to 'make you whole" or "even" from where your started. In the above situation, if you make $200,000 on a vessel after a loss, the companies see this as a "moral hazard" which is a polite way of saying they don't want you to be in a position to make money on a loss above your purchase price. In such a case you may be lax in making sure a loss doesn't not happen!

 
Wood Yacht Question Wood Yacht Insurance Survey Question:
I am buying a wood power boat. Does the yacht have to be surveyed out of the water?
Answer:
Depends on the age of the yacht. If fairly new, the company may accept an in-water survey. If older probably not. Also, if the boat was hauled and bottom maintenance was completed in the last 12 months, you may be able to provide receipts to the company and an in-water survey.

 
Wood Yacht Question Yacht Insurance Survey Question 2:
I am buying a wood sailboat. The seller has a survey that was done by the yard manager at the marina. Will the yacht insurance company accept this survey?
Answer:
The survey must be done by an accredited marine surveyor. If in the US, by a Nams or Sams surveyor (both on the internet with lists of surveyors in your area) or if outside the US by a Lloyds or other accredited surveyor. Any question, send the surveyors credentials to us, the insurance agent and get them approved by the company prior to hiring the surveyor.

Wood Yacht Question Wood Sailboat Yacht Insurance Question:
I am buying a wood sailboat and have been told you cannot get yacht insurance on a wood boat. Is this correct?
Answer:
Not at all. We have many older wood yachts insured. As long as you have a good survey on the vessel the fact she is wood does not preclude you from getting good insurance on your wood vessel. We actually have a 1930 wood motoryacht insured!


Wooden Sail Yacht Insurance

Wood Yacht Question Wood Sailboat Toredo Worm Question:
I am sailing my wood 60 foot Rhodes Ketch to Panama and my friends are telling me to beware of the Toredos. Are they kidding me? Is there such thing as a Toredo?
Answer:
Yes, indeed and you do have to be careful to avoid them!
Toredos are a marine form of worm that eats wood, and the are not particular if that wood is a floating log, or your garboard keel plank!

For centuries wood commercial vessels and warships have been covering their bottom with copper sheathing to avoid the damage. Your bottom antifouling paint will keep them out of you hull, but if you have worn or spot or other bare wood exposed under water, you can expect Toredo wood borers to get into this wood and eventually they will grow from a microscopic organism to a full blown marine wood borer as they eat and mature. They will honeycomb a plank, eating up to the bottom paint and changing course back and forth so that if you sound it with a hammer or even poke your finger into it, the plank will collapse. Make sure you keep your bottom paint up to standard and sound your hull with a hammer when you haul.

Wood Yacht Question Charter Yacht Insurance Question:
Wooden yacht sailing insurance We have owned a 48 Hatteras LRC for several years, and want to charter the boat when we are not using her, to provide some additional income. Can we do this?
Answer:
Yes, we can offer Quotes for Charter Insurance from several A rated companies.
The two types of charters often used for non Coast Guard inspected vessels, like most yachts, are bareboat and/ or captained charter policies, the latter of which are often called 6-pack charters because the Coast Guard regulations usually allow up to 6 guests aboard a non inspected vessel.
Bareboat charters agreements and insurance policies are most often used for sailing vessels as with this type of charter the vessel is actually turned over to the charter and there is no captain aboard. With your 48 Hatteras LRC you can offer your vessel as a bareboat but it would be prudent to consider the potential for damage or abuse to your engines if an operator does not care or know how to keep the engines in the proper RPM's zone.
Captained or 6-Pack charters require a licensed captain to be aboard at all times during the charters, and most companies require approval of the captain's resume prior to operation. This assumes that you, the owner, do not have a 6 Pack license. If you do have a 6 –Pack US Coast Guard license, and are approved to operate the vessel while under charter by the company, you do not need any other licensed captain.
One important factor to remember is that if you have any paid crew aboard the boat, as captain, mate or deckhand, you must advise us so we can add the proper coverage for them. Due to the Jones Act, paid crew are employees and you have some exposure if they become injured or sick aboard the vessel. We add paid crew liability coverage to cover this area of your liability.

Wood Yacht Question ACV Yacht Insurance Question:
An agent sent me an ACV or Actual Cash Value quote for my yacht. It is less premium than the agreed value policy I have now with your agency. Should I take the ACV policy?
Answer:
You can save money on the premium with an ACV policy but you get what you pay for!
In a total loss, you and the company with the ACV policy will have to agree on what your vessel is really worth and how much they are going to pay you. Not a great position to be in I am sure you will agree. An agreed value policy always pays the full amount of the hull value as listed on the Declaration page less any applicable deductions. So, you are sure of your insured amount.

Wood Yacht Question Hauling a Wood Boat Question:
What is the best method for hauling a wood boat?
Answer:
It is important to take extra precautions when hauling a wood boat for survey or bottom maintenance. A yard with a railway should be used so the hull will not be stressed when using the usual slings and travel lift equipment. The railway will provide even pressure along the hull to avoid this.

Wood Yacht Question Storing Wood Yacht Question:
What is the best method for storing a wood yacht?
Answer:
On larger yachts especially it is preferred to store in the water rather than ashore for long periods of time, like October to May in cold climates. This is due to the fact the vessel is evenly supported while in the water, and the hull will not dry or shrink which may happen for prolonged out of water layups.


Wood Sail Yacht Insurance

Wood Yacht Question Trans-Ocean Crossing Yacht Insurance Question:
We would like to sail our Morgan 6o Ketch to the Mediterranean next year from Newport Rhode Island. What do we need to do?
Answer:
We have several yacht insurance companies that will provide an annual policy that will include Transatlantic and Transpacific navigation. They require up to date surveys including an up to date rigging inspection for sailing vessels. Crew requirements are a minimum of three experienced sailors aboard that have prior blue water experience.

Wood Yacht Question Breach of Warranty Yacht Insurance Question:
My bank wants a breach of warranty clause on my yacht insurance policy, what is this?
Answer:
A breach of warranty clause provides payment to the bank for a mortgage amount that is placed on the boat, in the event that the owner voids or breaches the policy through an action or non action.
For instance, you have a boat with a hull value of $2,000,000 and a mortgage of $1,700,000 held by the bank. Your policy states your navigation limit is Florida and Bahamas only. You forget this and take the boat to Cuba, where you have an engine failure and wind up on the beach in Cuba and the boat is a total loss. In this case, the breach of warranty clause would provide for the bank to be paid the $1,700,000 outstanding mortgage. There would probably be no coverage for you for the balance of the hull amount as you voided the policy navigation limits.

Wood Yacht Question Letter of Compliance Yacht Insurance Question:
I sent my insurance company a new survey and they now need a letter of compliance. What is this?
Answer:
A survey letter of compliance is a form that you sign and provide the yacht insurance company that confirms that any survey recommendations on the survey have been repaired or replaced. This is a very important document as if you have a loss or claim from a survey item that has not been addressed, the claim could be denied by the insurance company. If you are not going to do a survey item, you must note it on the compliance form and make sure the company approves non repair of this item.

Wood Yacht Question Minimum Earned Premium Yacht Insurance Question:
I got a quote to insure my Marlow motor yacht that includes a 25% minimum earned premium. What is this?
Answer:
Some companies will quote with a certain minimum amount of premium that is due for a policy that is cancelled early. Most of the time the minimum earned premium is 25% of the total premium or, three months of coverage.

Wood Yacht Question Custom Trimiran Yacht Insurance Question:
We are thinking of buying a 58 Custom Trimiran, can you insure this for us?
Answer:
Trimirans are very difficult to insure. We have one or two companies that may offer a quote for them. On the other hand we have many companies that are happy to offer insurance for Catamarans and we have many insured.

Wood Yacht Question Surplus Lines Company Yacht Insurance Question:
What is a Surplus Lines Company and why do you add taxes and fees on these quotes when I don't see these added fees to other companies like Progressive or Chubb?
Answer:
Surplus Lines Companies are approved but non admitted companies that are allowed by the Florida Insurance Department to offer insurance in the state of Florida. Many surplus lines companies are very large world wide companies like Lloyds of London or Great Lakes UK. They are A rated and offer very competitive quotes in areas of insurance that US or non surplus lines companies do not want to write. We as agents add Florida taxes and fees to these quotes as these must be sent in to the state by law. Admitted carriers like Progressive and Chubb already pay fees to the state directly and nothing is added to these quotes.


Wood Sail Yacht Insurance