Imagine this: You are finally nearing retirement, and you are financially secure. You and your spouse decide to get that bigger yacht you've always talked about so that you can spend more time on the water and do some extended cruising in the Caribbean. It would be nice to have the space to invite another couple or your grandkids to join you occasionally. You currently own a 40-foot trawler which you keep at a marina near your home in Florida. You plan to trade her in and upgrade to a 55- to 65-foot yacht. You give your insurance broker a call and he says, “It can be really hard to get insurance these days, especially if you plan to keep your boat in Florida for extended periods of time and during hurricane season. Also, some insurance companies may not insure you without a captain if you step up to such a big boat.” You get off the phone wondering how this could possibly be true!
The yacht and marine insurance landscape is complex and dynamic. While the reality of today’s insurance marketplace can feel overwhelming to boat owners and buyers, there are smart ways to navigate your options and secure the yacht insurance coverage you need.
The dramatic increase in boat purchases back in 2020 and 2021, during the height of the pandemic, significantly impacted not only the marine supply chain but also the insurance market and underwriting parameters. Many of these impacts and changes to the marine industry and insurance market are still a reality as we enter the 2024 boating season. Most of these market shifts are here to stay.
The increase in demand for yacht policies, along with year after year of record-breaking climate-related disasters and frequent severe weather events, have put substantial pressure on an already competitive, restricted marine insurance market.
Advanced technologies that are integrated into marine construction, materials, rigging systems, and onboard electronics have created new and ongoing challenges and complexities for underwriters. Marine insurance capacity from the carriers, which means the availability of yacht insurance policies, continues to be limited across the nation, especially in areas vulnerable to increased hurricane and severe weather activity such as Florida, Texas, the Gulf States, and California.
The two key factors to securing yacht insurance in this competitive, complex insurance market are:
It is helpful to have a clear understanding of what makes a risk most attractive to an underwriter. In nearly all cases, the underwriting company wants to know that you and your boat are a good, safe risk. Underwriters scrutinize each risk and expect detailed background information to accompany each application. Boat owners should work with their insurance broker to determine which of the following supplemental materials are needed to make for a strong, attractive submission for marine insurance.
An experienced marine insurance broker can help a boat owner or prospective owner work through most challenges to secure adequate, comprehensive insurance for their boat and other assets. The marine insurance broker will advise the boat owner on which supplemental materials are needed to support their insurance application and can often provide templates to facilitate the creation of these materials. Boat owners and buyers should seek out a broker who is active in today’s dynamic marine insurance marketplace, has strong relationships with marine insurance companies and underwriters, and has access to a wide range of marine insurance solutions.
The broker should be well versed not only in risk management and insurance placements, but also knowledgeable about a wide range of boat types, marine electronics and technologies, marine construction, cruising plans, racing schedules, safety equipment, navigation areas, and hurricane zones. Timing also matters. Boat owners and prospective boat owners should connect with a specialized insurance broker very early in the boat-buying process to allow for ample time to secure the best insurance solution possible.
The marine specialty division at Risk Strategies includes deeply experienced marine insurance advisors, including experts who joined the team through the acquisition of long-time marine specialty brokerages Gowrie Group and Atlas Insurance. Our marine specialists are uniquely able to help boat owners and prospective owners navigate the process of securing yacht insurance in today’s complex, competitive market.