Boats Under 27′ Terms
Actual Cash Value (ACV)
The market value of a vessel at the time of a loss, after depreciation is applied. Under ACV coverage, older boats are paid out at reduced amounts — often significantly less than replacement cost.
Agreed Value
A settlement basis where the insurer and policyholder agree on the vessel’s insured value upfront. In the event of a total loss, the full agreed amount is paid — no depreciation deducted. The preferred coverage for most boat owners.
Boat Policy
A dedicated insurance contract covering smaller watercraft. Typically includes hull coverage, liability, medical payments, uninsured boater, and coverage for permanently attached equipment and the trailer.
Deductible
The portion of a covered loss the policyholder pays before the insurer pays the remainder. Boat policy deductibles may be expressed as a flat dollar amount or a percentage of the insured value.
Mechanical Breakdown Coverage
An endorsement — notably offered through Travelers — that covers engine and mechanical system failure beyond a standard warranty, including incidental and accidental damage to the motor. A major differentiator for specialty marine policies.
On-Water Towing
Coverage for the cost of emergency towing if your vessel becomes disabled on the water. Available as a policy endorsement (through Travelers for as little as $25) or through membership programs like BoatUS.
Trailer Coverage
Physical damage protection for the trailer used to transport your boat. Often included in or added to a boat policy; liability while towing on public roads typically falls under the auto policy.
Yachts Over 27′ Terms
Hull & Machinery (H&M)
The primary physical damage coverage for a vessel — covering the hull, engines, machinery, equipment, and permanently attached gear against physical loss or damage.
Lay-Up Period
A specified period — usually winter months — during which the vessel is out of service and stored ashore or in a marina. Premiums may be reduced during lay-up; operating outside the lay-up period without notifying the insurer can void coverage.
Marine Umbrella
An excess liability policy that extends coverage above the limits of your primary yacht policy. Recommended for vessels over 27′ and owners who entertain guests or operate in congested waterways.
Navigation Territory / Cruising Range
The geographic area within which the policy provides coverage. Operating outside the defined territory can suspend or void coverage. Common territories include inland waters, coastal limits, and offshore/bluewater.
Protection & Indemnity (P&I)
The primary liability coverage for a vessel owner, covering bodily injury or death to third parties, damage to other vessels or property, and legal defense costs arising from the operation of the yacht.
Salvage
The cost of recovering a vessel that has run aground, sunk, or become stranded. Salvage expenses can be substantial and are a key component of P&I and yacht hull coverage.
Sailboat Terms
Bluewater Coverage
Insurance specifically designed for offshore and ocean passage sailing, typically including extended navigation territories, foreign port coverage, crew liability, and provisions for extended voyages.
Dismasting
The loss or catastrophic failure of a vessel’s mast, typically caused by rigging failure, collision, or severe weather. Covered under a properly structured sailboat policy as part of hull and machinery coverage.
Racing Endorsement
An optional add-on that extends hull coverage to include collision damage occurring during organized racing events. Standard sailboat policies typically exclude racing-related damage.
Rigging Coverage
Coverage for standing rigging (shrouds, stays, forestay) and running rigging (halyards, sheets, control lines) — essential components of a sailboat often excluded or sublimited in generic policies.
Personal Watercraft Terms
Bodily Injury Liability (BIL)
Coverage that pays for injuries to another person caused by the operation of your personal watercraft. Given the speed and maneuverability of PWC, this is one of the most important coverage components.
Medical Payments Coverage
Covers reasonable medical expenses for the operator and passengers of your PWC injured in an accident, regardless of fault. Separate from liability coverage, which applies to injuries to other parties.
PWC (Personal Watercraft)
A stand-up or sit-down motorized watercraft propelled by a water jet pump rather than a propeller — including brands like Jet Ski (Kawasaki), WaveRunner (Yamaha), and Sea-Doo (BRP). Requires a dedicated insurance policy separate from auto or homeowners.
Uninsured/Underinsured Watercraft
Coverage that protects you if you are injured by another watercraft operator who carries insufficient or no insurance. Often overlooked on PWC policies but highly recommended given the risk of collision in busy waterways.
Charter Boat Terms
Certificate of Inspection (COI)
A USCG document required for commercial passenger vessels, certifying the vessel meets federal safety standards. Required by most commercial marine insurers and must be maintained and current for coverage to be valid.
Commercial Marine Insurance
A policy designed for vessels used for commercial purposes, including fishing charters, ecotours, water taxis, and sailing charters. Personal boat policies explicitly exclude commercial operations.
Crew Coverage
Insurance covering injury, illness, or death of paid crew members while working aboard the vessel. Typically includes jones act liability or crew accident medical coverage depending on policy structure.
Loss of Income / Charter Revenue
Optional coverage that reimburses lost charter revenue if the vessel is out of service due to a covered loss. Critical for operators who depend on the vessel as a primary income source.
Passenger Liability
Liability coverage specifically for bodily injury to paying passengers. Higher limits are typically required for commercial vessels carrying passengers than for recreational boats.
Luxury Yacht Terms
Constructive Total Loss (CTL)
A situation where the cost to repair a vessel would equal or exceed the vessel’s insured value, making repair economically impractical. Treated as a total loss under agreed value policies.
Fine Art & Valuables Coverage
A scheduled endorsement or floater covering high-value items aboard the yacht — such as artwork, jewelry, collectibles, or fine wine — above the sublimits found in standard policies.
High-Net-Worth (HNW) Marine Policy
A premium marine insurance product — offered by carriers like Chubb — tailored for affluent vessel owners. Features include white-glove claims handling, agreed value on large yachts, worldwide navigation, and dedicated account management.
Marine Survey
A professional inspection of a vessel conducted by a certified surveyor (ACMS or NAMS certified). Required by most insurers for high-value yachts to confirm seaworthiness and establish insured value. Typically valid for 3–5 years.
Superyacht
Generally defined as a professionally crewed yacht over 24 meters (roughly 79 feet) in length. Superyachts typically require Lloyd’s of London or specialist surplus lines coverage given their high values and complex risk profiles.
Total Loss Only (TLO)
A coverage basis that pays only in the event of a total or constructive total loss — not for partial damage. Sometimes used by HNW owners who self-insure minor damage and want to reduce premiums while maintaining catastrophic loss protection.
Worldwide Navigation
A navigation territory endorsement that extends coverage to international waters and foreign ports. Required for yachts that cruise internationally. Subject to war risk exclusions and sometimes special conditions for high-risk regions.