Depending on your policy, many insurance companies will reimburse you for the full value of your vessel. They will also cover your costs to recover and restore it.
Boats can sink for a number of reasons, from wear and tear to poor maintenance. Occasionally, even with full insurance, the boat can be a total loss.
Damaged
If your yacht sinks gets damaged or is lost, the first thing you should do is make sure everyone is safe. Once that is done, it is time to notify your insurance company. It may take some time for them to assess the damage, depending on where your boat has sunk and how bad the wreckage is.
Even a small hole can cause a yacht to sink. The best way to avoid such an accident is to systematically check all the below waterline hull fittings, seacocks, log and echo sounder transducer ports, engine inlets & outlets, propeller shaft hoses, etc. before each trip.
It is also a good idea to incorporate such an inspection and shut-off of all these items into your pre-departure routine. That way, you will have a chance to catch the problem before it becomes an emergency.
Many boat sinkings happen due to lack of proper maintenance. Even a small nick or crack in the hull can allow water to pour into your boat at an alarming rate. A five cm hole below the waterline can leak three hundred litres per minute—enough to sink a 30 ft vessel in just 12 minutes!
Sailing yacht insurance companies expect their policyholders to perform regular upkeep on their vessels. That is why they have liability coverage in place. If they can see that you did not perform proper upkeep, they may not cover your claim for a sinking or loss.
Some boats sink due to a collision or grounding with another object, while others simply drift off course and hit rocks, debris, reefs, logs, buoys or other vessels. These incidents are not always preventable, but they can be mitigated by having a proper Vessel Damage Mitigation Plan in place.
It is also important to be aware that most boat insurance policies have distance, location or weather exclusions related to sinking. If you travel too far away from home or sail into a hurricane zone, your boat insurance may not cover you in the event of an accidental sinking. Likewise, if you are operating your vessel for commercial or charter purposes and the vessel sinks, your insurance may not cover you either.
Total Loss
Getting out on the water in your yacht should be a unique pleasure and joy for you. However, that enjoyment can quickly turn to a nightmare if your boat starts taking on water and you are faced with an uncontrollable loss of your beloved vessel. Assuming your vessel is not completely submerged, the best thing to do is check for damage and to try to salvage whatever you can. This is a good reason why most insurance policies have a provision for salvage and wreck removal to be included in the liability section of your policy.
Most insurers will pay for a new replacement boat for you if they deem your vessel as a total loss. It is a bit like having your house destroyed by a fire and being given a check for your losses – you will not get your old boat back but you will have money to buy a new one.
However, there are some instances where the insurer will not do that. Generally this occurs when the damage is due to a violation of maritime law and rules or where the sinking is done intentionally.
About half of all sinkings occur at the dock and most of those are caused by some small problem under or around the waterline that simply fails – for example, a rubber outdrive bellows failure. These are things that should be checked regularly and maintained. Insurers expect you to perform this sort of routine upkeep and if you don’t then it could be considered negligence and not covered by your insurance policy.
If you have an incident that results in a sinking or wreckage of your boat, it is important to report the event to the police as soon as possible. They will need to know where the boat is located as well as details about the incident. Also, it is a good idea to have the vessel towed to the nearest marina to allow professionals to take a look at it and provide an initial assessment.
Salvage
If your boat sinks, gets damaged or is lost the good news is that your insurance company will pay up to your policy limits for the hull value. However, you will have to pay for the cost of removing it from the water and cleaning up any environmental damage. Depending on your policy, this could be very expensive.
If you are able to salvage your vessel, you will need to work with a boatyard to get the best outcome. A professional repair company will be able to assess the damage and make sure all components are safe to operate before returning your yacht back into service. They will also be able to advise you of any additional damage that may be incurred in the future.
A successful salvage can be one of the most difficult, time-consuming and costly marine operations to perform. It requires a lot of ingenuity, talent and experience. Unlike most types of construction, there is no “standard blueprint” that can be followed. A salvage operation involves a large number of people and the use of complex machinery, many of which can be dangerous. This makes it vital that all personnel involved are fully trained and have the correct safety equipment.
Salvage is a complex business that can involve anything from removing oil rigs to recovering sunken ships. The cost can be astronomical: the Costa Concordia, for example, ran aground off the coast of Italy and ended up being one of the most expensive wreck removal projects ever undertaken. It cost over $1bn to salvage and clean up the ship and its cargo.
To be awarded a salvage reward, the following elements need to be met:
If your yacht takes on water or starts to sink you should call a professional immediately. A fast response will increase the chances of salvaging your boat and minimizing further damage. If you are unable to salvage your boat, contact your insurance company as soon as possible. Depending on where your boat is located, local authorities might require that it is removed as quickly as possible.
Insurance
A yacht’s hull insurance is one of the most important aspects of her protection. Some yacht policies include “agreed value” coverage, which means that the insurer and owner have agreed on the value of the vessel and this is the amount that will be paid in the event of a total loss. This is preferable to “actual cash value” coverage, which deducts the cost of depreciation from your payout.
It is also important to have liability coverage, often referred to as Protection and Indemnity (P&I). This covers your legal liabilities for bodily injury or damage to property of third parties that result from the ownership or operation of the boat. This is very important since maritime law is unique and a lawsuit can run into the millions of dollars.
Insurance premiums are based on many factors, including the location of the boat, type of boat, how it is used, and the number of claims. Kelly Klee can help you sort out all of the facts and choose the right insurance to meet your needs.
Another aspect to consider is whether your hull policy is tailored especially for the way that you mean to use your vessel. Many hull policies allow for a certain number of miles per year and may exclude boats that are used for commercial purposes, like charters or fishing. If these exceptions aren’t understood and accepted by the owner, then he or she could end up with a canceled policy if there is a claim that exceeds the limits allowed by the insurer.
In addition, it is important to understand the navigational limits of your policy. Most hull policies have limits describing how far from shore you can navigate your yacht. If you go outside these limits, then you will not be covered by the insurance. Similarly, most hull policies have layup periods that push a pause on your insurance during the colder months. If you take your boat out for a joy ride before this period is over, then you will not be insured.
Most insurance companies will only cover your yacht if you obey all the rules of the policy. This includes keeping up with maintenance, not going outside your navigational limits and staying out of the water during the winter. It is also important to stay current with all boating safety courses.
