Watercraft

If you own a marine vessel that is longer than 26 feet, you need yacht insurance. (If it is less than 26 feet, you need boat insurance.)

Yacht insurance will protect your investment from theft, damage, and other things that can cause partial or complete loss.

What do you need to look for when you choose an insurance policy for your yacht?

1. Comprehensive cover. Some policies cover your yacht only for accidents and damage. Others protect against fire. Still others provide only against theft or vandalism.

Naturally, just getting one sort of protection will cost you less. If you keep your yacht in a boat house, this will further lower the cost for your policy.

But how do you which of these dangers is likely to befall your yacht? In the end, it is best to get a policy that protects your yacht for all three risks.

2. Third-party liability. Third-party injury is the biggest headache you can get with your yacht. After all, should your yacht get stolen or damaged or completely burned down, you always have the option to do nothing and just swallow your loss.

On the other hand, if you and your yacht cause damage to others' property or injury on another person, you do not have the option of doing nothing. You will have to pay up.

Third-party cover will prevent you from having to cough up a huge amount of cash at one time just to keep yourself from getting sued. In any case, in the UK, you are required to have at least £2 million third-party liability before you sail in your yacht.

Incidentally, third-party insurance only applies when your yacht is in the water. Should your yacht cause damage to anyone or anything while your yacht is being transported from your boat house to the water, this should be covered by your vehicle insurance, not your yacht insurance.

3. New-for-old cover. Will your insurance pay for the cost needed to purchase a brand-new yacht should something happen to the old one? Or will your policy only cover the value of the yacht when the damage or loss occurred?

A new-for-old cover will ensure that you will have enough money to replace your old yacht with a new one. However, be aware that some companies set a maximum yacht age for your yacht - often three years - to receive this coverage.

4. Laid-up period. Some insurance companies will not cover you if you sail your yacht within a certain period during the year, when the boat yards are at peak season, or during bad weather. Check your policy to confirm the laid-up period requirement of your policy

5. Ease of claim. An insurance policy is only as good as your ability to claim it. The best way to find an insurance company that makes claim submission easy is by talking to your fellow sailors and getting referrals.