Yacht Insurance Guide 2026: Complete Guide for Captains and Owners

**Hull & Machinery (H&M)** is the foundation of yacht insurance. It covers the vessel's hull, machinery, equipment, and fittings against risks such as fire, collision, storm, sinking, and theft. H&M policies are typically written on either an 'agreed value' or a 'market value' basis — agreed-value policies pay out the full insured sum in the event of a total loss, while market-value policies are assessed at the time of the claim. **P&I (Protection & Indemnity)** insurance covers third-party bodily injury and property damage claims, environmental pollution liability (MARPOL), and legal defense costs. For commercial charter yachts and private yachts over 24m, separate P&I coverage is a practical necessity rather than an option. **Charter liability insurance** covers the risks associated with carrying paying guests during charter periods — standard private yacht H&M policies typically exclude charter use altogether.

Vessel age and construction type is the primary underwriting variable — wooden yachts over 25 years old cost significantly more to insure, and carry more restrictive terms, than comparable steel or GRP vessels. Cruising area has a direct effect on premium: cruising confined to the Mediterranean is cheaper to insure than worldwide cover, and navigation within the hurricane belt (the Caribbean during summer season) typically increases the premium. A captain's documented experience — sea-mile logs, certificates of competency, and prior claims history — is a critical criterion for most underwriters. Well-kept maintenance records (PMS) and a current classification certificate are viewed favorably in underwriting. Charter use triggers a standard premium increase to reflect the higher accident risk associated with carrying paying guests.

Turkish law does not make insurance compulsory for boats in private use, though going without cover leaves the owner exposed to large repair and liability costs. Turkish insurers such as Türkiye Sigorta offer boat (tekne) insurance. Some marinas can ask for proof of a valid policy before granting a berth, so carry your insurance certificate with the vessel's papers.

Chartering your yacht can take you outside your standard private insurance coverage — checking whether your policy permits charter use is essential before accepting a booking. Charter yacht policies typically add: guest bodily injury and property damage liability, charter income loss (covering charter cancellations caused by damage to the yacht), professional liability (covering crew error), and higher P&I limits. On large superyachts, P&I is usually placed through a dedicated P&I club — such as The London P&I Club, Gard, or West of England — rather than a package policy. Since the 2014 amendments (in force 18 January 2017), MLC 2006 also requires financial security covering abandoned seafarers and compensation for crew death or long-term disability.

The large majority of insurance policies require a loss to be reported promptly. Late notification can give the insurer grounds to reduce or deny a claim. Practical steps to take at the time of a loss: take immediate action to prevent further damage (pumping, temporary repairs); document evidence — photographs, video, witness statements — as early as possible; and avoid starting repairs yourself, since the insurer may require a surveyor's inspection first. Your maintenance records (PMS) carry significant weight in the damage assessment — the insurer will investigate whether the damage resulted from inadequate maintenance or from an accident or unforeseen event.