Yachts are synonymous with luxury and adventure. But along with the freedom comes plenty of responsibilities. One of those is protecting your investment by having your yacht insured from a wide number of risks and liabilities.
While it’s crucial to have financial protection, it’s only natural to wonder what factors affect the cost of yacht insurance in Canada. Thankfully you have to wonder no more. Read on as we look at what these factors are and how to find the best yacht insurance quote.
Yacht Size and Value
The size and value of the yacht is one of the biggest factors when determining yacht insurance premiums. That’s not just because the cost of repair would be higher, as there are other reasons why a large yacht can be at risk.
For example, larger yachts have a higher potential for theft, have better features, and have a greater liability with more passengers/crew. All of this adds up to a bigger risk for the insurer and so bigger premiums go hand in hand with a bigger yacht.
Type of Yacht
Yachts come in many different shapes and sizes. The likes of motor yachts, sailboats, and catamarans all have different risk profiles. For example, motor yachts are faster and more expensive to repair than sailboats.
There are also specialized yachts which can be used for the likes of racing. These have a higher risk of damage and accidents. When creating a quote, insurers will take into account all of the unique features that may affect its risk exposure. It’s also best to double-check whether you may need boat insurance instead.
Related Article: https://bucklerins.com/what-is-the-difference-between-yacht-insurance-and-boat-insurance/
Geographical Location and Navigational Limits
Insurers will also ask how the yacht is going to be used. It’s important to be honest about this, as lying to lower costs can invalidate your policy. These are called navigational limits, which are the areas in which the yacht will operate.
For example, a vessel being used solely in the Great Lakes will have a much lower risk profile than one that is used in coastal areas and crossing into international waters. Some areas have a much greater threat of severe weather, piracy, and other long-distance challenges.
The location also extends to where the yacht is stored during the off-season. If it’s moored in a hurricane-prone area, then it’ll be at more of a risk than one that is stored within indoor facilities. This type of storage can lead to discounts from some insurers.
Usage of the Yacht
The usage of your yacht is also important. Those who just use their yacht for personal and recreational purposes will receive the lowest quotes. If you use the yacht for commercial activities or rent it out, additional insurance may be required for this.
Added to this, it’s also considered a higher risk to be involved with competitive racing or participate in organized regattas. This is because the risk of accidents, liabilities, and wear and tear all go up compared to purely personal use.
Owner’s Experience and Claims History
One of the big factors which is often overlooked is the experience and history of the owner. As with auto insurance, insurers will be happier if the yacht is going to be operated by someone with expertise and extensive maritime knowledge.
They’ll also want to know about your claim’s history. If you have a history of accidents, then your premiums are going to be higher. You’ll also need proof of competency, such as a Pleasure Craft Operator Card (PCOC) to be able to operate a boat and get insurance.
Insurance Coverage and Policy Types
When it comes to yacht insurance, there are many different types of coverage you can get. This includes hull and machinery, liability, personal property, medical payments, and uninsured coverage. There is also liability coverage, which gives you protection from a wide range of risks.
Adding coverage will be more expensive than a basic liability-only policy. However, it’s often better to pay more for wider protection. The deductible will also impact your premium as the higher it is, the less you’ll pay.
Related Article: https://bucklerins.com/yacht-insurance-for-first-time-owners-what-you-need-to-know/
Safety Features and Security Measures
It’s not always the case, but many insurers will reward you for taking steps to minimize your risk profile. Security features which can make a difference include fire extinguishers, life rafts, GPS tracking systems, and anti-theft devices.
We mentioned that yachts stored in safe locations can have lower premiums, but that’s even truer if there are robust security measures. Finally, yachts equipped with modern navigational and safety systems will also be seen as less risky.
Insurance Provider
Finally, the cost of yacht insurance can vary greatly between providers. This is mainly because they all use a variety of information to judge risk, and this can change from one insurer to the next. This is why you should never settle for your first quote.
Shopping around will allow you to find more competitive rates. One great way to do this is by using an insurance broker. They work closely with multiple providers and will do the hard work to find you the best quote for your circumstances and budget.
Final Thoughts
If you own a yacht, insurance is vital for protecting your investment and financial harm. Finding the right policy is important, and as we’ve seen, there are many factors which affect the cost of yacht insurance in Canada.
It’s a great idea to take time to consider exactly what coverage you need and shop around to find the best quote. If you’re looking for yacht insurance, then contact Buckler Insurance today and we’ll work hard to find you the right policy.
