The A to Z of yacht insurance: How to read the small print

Deduction new for old

If a ship is repaired at the insurer's expense, new parts are often inevitably installed. These should be paid for in full by the insurer, even if the customer may be better off afterwards than before the loss event thanks to the new parts.

Outsourcing

Maritime equipment is not covered by standard household contents insurance. If, for example, navigation devices or the outboard motor are taken home for storage or maintenance, they should also be covered by the boat hull insurance there.

Salvage/wreck removal costs

Immense claims are incurred by owners whose ships run aground or sink and have to be salvaged at the instigation of the authorities or third parties. The policy should therefore definitely include all salvage costs, or even better, wreck removal costs. In particular, these should include not only the scrapping of the yacht, but also the necessary removal of environmental damage.

Travelling area/area exceeded

Defines the area in which insurance cover exists. Short-term transgressions - important for regatta sailors or holiday cruising, for example - should be covered.

Fixed rate

see Sum insured

Consequential damage

Damage that only occurs as a result of the actual loss event. They should always be fully covered by the insurance.

Bad debts

If a third party responsible for the damage cannot be traced or has neither liability nor personal assets, you are left with the loss. In this case, it's a good idea to also have loss of receivables cover included in your own liability insurance. This will then cover you instead of the other party. However, only the current value is insured in this way.

Dangerous/negligence liability

Your own boat liability insurance does not have to cover all damage. If, for example, despite being properly moored, your own boat breaks free from its berth during a storm that is untypical for the region and causes damage to neighbouring boats, you are not personally at fault. The other owners who suffer damage are left empty-handed - unless they have hull insurance. In this context, lawyers speak of fault-based liability. This contrasts with strict liability, which car owners have to deal with, for example. If damage is caused by your own car, the owner is always automatically liable, even if they are not responsible for the cause of the damage, for example in the event of an engine fire.

Opposing liability

Anyone who suffers damage as a result of the negligent or intentional behaviour of a third party, and only then, will receive their money from the person who caused the accident or from their liability insurance, if they have one. However, this only ever reimburses the current value. The difference to the fixed value can then be recouped via your own boat hull insurance if necessary. See also Loss of receivables.

Obligations

The obligations that the policyholder must fulfil, such as paying the insurance premium on time or informing the insurance company immediately of any damage.

Personal effects

Valuables that do not belong directly to the yacht, but are nevertheless on board and should therefore also be insured. For example, the computer used for navigation. Or high-quality sailing clothing.

Discounts/discount savers

Discounts when taking out a policy. Some insurers offer new customers discounts of 10 or 20 per cent. However, if a claim does not immediately result in a premium increase for the customer, this is referred to as a discount saver.

Deductible/excess

Boat policies are almost only available with an excess from around 250 euros upwards. In the most favourable case, however, the agreed excess only applies to self-inflicted driving damage. You would then not have to pay for the consequences of burglary.

Total loss

This is the case if a ship is irretrievably lost or if repairing the damage would exceed the sum insured (economic total loss).

Transports

Boat transport by land should be covered by the policy, whether by road trailer from home to the harbour or by storage rack from the jetty to winter storage.

Sum insured

The value at which a boat is insured. Most insurers today offer policies with a so-called fixed valuation. The contract then stipulates the specific value that will be paid out in the event of total loss of the boat. If the price of an equivalent new boat rises in the meantime, the insured person must pay the difference out of their own pocket. But beware, some insurers only feel bound to the fixed valuation for the first few years, after which the fixed valuation must either be readjusted or only the current value of the yacht is insured.

Time value insurance

see Sum insured