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Yacht in a charter management scheme: who insures it?
Short answer
While the yacht sails in a charter fleet, the charter company normally insures it.
The owner still checks who the policyholder is,
whether the sum insured matches the purchase price,
what applies in owner weeks and on which day the owner's own policy has to start.
In a charter management scheme an owner buys a yacht, usually new, and places it with a charter company for a number of years. The company charters it out, handles the berth, maintenance and turnarounds, and the owner receives a share of the income or a guaranteed sum and may use the boat for agreed owner weeks. Insurance is set out in the management agreement. Usually the company insures the yacht with the rest of its fleet and recharges the cost. The yacht still belongs to the owner, and if it is financed, the lender will want its interest noted on the policy.
Ask to see the policy schedule for your yacht, not just a letter confirming cover. Check who the policyholder is and whether you are named as owner or joint insured, whether the agreed value matches the purchase price with equipment, and who pays the excess after damage caused by charter guests. Ask whether the same cover applies in owner weeks, with your own crew or outside the charter area. Loss of charter income during repairs is normally not part of hull cover. And get in writing the day on which the fleet cover for your yacht ends.
From the day the yacht leaves the scheme it needs its own policy, with no gap at all between the two. Have a surveyor record its condition at handback, because marks from years of charter are hard to place later. If you plan to keep chartering the boat out for money, tell your insurer before the first paid week: many private yacht policies treat letting the boat for reward as a change of risk that must be agreed, and some wordings only cover regular or commercial charter if it is declared and noted on the schedule.
Worth remembering
Fleet policy
covers the yacht while it is chartered out
Your own policy
starts on the day of handback
Not a single day should fall between the two.
Questions
What owners ask us about this
Who insures a yacht in a charter management scheme?
Usually the charter company, often under its fleet policy, and it recharges the cost to the owner. The details are in the management agreement and in the policy itself.
Am I covered when I sail my yacht in my owner weeks?
That depends on the agreement. Ask specifically about sailing with your own crew and outside the charter area, and get the answer in writing.
What should I do when the yacht leaves the charter fleet?
Start your own policy on the day of handback, have the condition surveyed and tell your insurer in advance if you intend to charter the boat out again.
Related
Not sure whether you qualify?
Whether it is “Yacht in a charter management scheme: who insures it?” or another question: send us your residence and the flag your boat flies. You will get a straight answer in one email; including a no, if that is the answer.
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