The world is going through unprecedented times, with little clarity of what the next 6 months has in store for our economies. Everyone is hesitant to leaving the house, let alone using their yachts as bans on yachting sweep across the globe. The one thing that adds insult to injury is that Yacht Owners are still paying for berthing costs and insurance premiums whilst yachts cannot be used. Bryan Davies from CompareYachtInsurance.com looks into what yacht owners can do to save themselves some money whilst everyone awaits the loosening of the lockdowns.
Firstly, as CompareYachtInsurance.com are the premier insurance provider of a variety of insurer’s products, we’ll touch on the insurance options available to boat and yacht owners. Davies tells us that 90% of insurance policies are delivered with the intention of covering full use of the vessel, whilst only a few are for laid up ashore or laid up afloat vessels. The two things that separate the laid up policies and the full use policies are what they cover and how much that costs. Davies’ point of view on this is simple “When yachts aren’t able to be used, either due to a pandemic like `Covid-19’ or be it a prolonged maintenance period or winterisation, the insurance policy should reflect the same. Cars can be classified as out of operation (SORN) for insurance purposes, and the yacht insurance equivalent of these is classifying a vessel as laid up. Insurers can provide lay-up credits for this to reflect a reduction in insurance premium.”
This helps us understand the dynamics of how an insurance policy should respond. Insured’s should be approaching their brokers or insurers to let them know what restrictions are in place, and what options they have available for reducing their cover to suit the current climate. Most insurers will offer some form of return premium for the change in the use of the vessel, but in cases where there is no flexibility, a review of what other insurance policies are on the market could provide a useful alternative. Most insurers again will be bound by insurance laws to offer pro-rata refunds of insurance premiums if a policy is cancelled mid-term, and therefore that refund in premium could be more than enough to pick up a newer policy offering the same or more cover for the same or lesser price.
Next we move on to Marinas which also represent a static cost to yacht owners. Yacht owners here have less opportunities available to them than the flexibility of insurance policies. The yachts are physically at a location, and they cannot be moved due to the restrictions from preventing boat owners from visiting their vessels.
This leaves only a few options. Some marinas may offer a berthing master service whereby they move the yachts around the marina. If there is a cheaper berth available, one that perhaps offers less accessibility or facilities, then this may in the long term end up being significantly cheaper. The next thing to consider is the standing charges of electricity, water and parking. If paying for marina charges on a monthly basis, then these can be cancelled off the contract until further notice, resulting in a reduction in the monthly fees. Ultimately, a conversation with the marina manager should reveal any options in reducing these overheads.
No matter the difficulty that you’re facing, there are options out there to help your financial burden during this crisis. We are working as hard as ever to support our clients and would urge you to use our free service to help connect you with the right insurer for your yacht’s current and future needs.