As Sunsail’s Peter Cook says, “You never know what will happen on a boat.” Enter charter insurance, which is designed to cover you in case of a serious event—major loss or damage.
In the well-established charter world of the Caribbean, the pattern is industry wide, though the actual amounts differ by company; the variables are the size and age of the boat and the location of the charter. You will be required to leave a security deposit (the range among the 17 Caribbean/Bahamas companies listed in the October 2006 issue of SAIL is $300 to $5,000), usually a credit-card imprint, against minor damage or loss, and you may be required to purchase nonrefundable insurance—“yacht damage waiver” or “yacht security insurance”—at a daily rate (among these companies, the range is $20 to $50/day). Insurance for a racing charter has a higher deductible—probably around $3,000 for Sunsail, according to Peter Cook—and the security deposit is also higher.
The damage waiver allows you to buy down the deductible, limiting your exposure to, on average, $400 or $500 instead of $5,000, says Van Perry of The Moorings. If you buy it, the whole boat, including the dinghy and motor (worth a couple of thousand dollars), is covered against accidental damage. If you decline it, your security deposit goes up commensurately.
“It’s foolish to turn down this insurance,” says John Jacobs of CYOA Yacht Charters. “Most customers don’t lose or break things, but it’s common enough to hit a dock too hard and put a hole or major scratch in the hull, or even to lose the dinghy.”
In addition, charter companies carry liability insurance against damage to the boat and/or persons. The amount varies among companies, but is likely to be at least $1 million.
It’s worthwhile to note, and it’s spelled out in your contract, that you’re not covered if you’re sailing drunk, outside the defined charter area, or deemed to be grossly negligent—if, as Peter Cook puts it, you saw a boat sailing toward you, maintained your course to make sure you hit it, and then hit it.
If you still have questions after reading your contract, do ask a charter company representative. Domestic U.S. and Canadian charter companies may have different insurance arrangements, and it always pays to ask.