We’d like to provide our clients with some additional and more in-depth information about Trip Cancellation Insurance for Yacht charters. First we should give an overview of the different types of insurance that are involved in chartering a crewed yacht.
1. The yacht owners vessel damage policy. Is usually purchased by the owner of a yacht and helps to protect him/her from accidents, collisions, damage or loss of the boat.
2. The yacht owners third party liability insurance that protects him from lawsuits from injured parties caused by accidents or events involving passengers (guests). Charter yachts typically hold between $500,000 to $1,000,000 of liability insurance. Guests / charterers can request a Certificate of Insurance (COI) from the yacht owner as proof of Insurance. He will obtain this document from his insurer.
3. In certain cases, additional or supplementary liability insurance may be purchased by guests or passengers that increases the yacht owner’s policy limits.
4. Trip cancellation insurance, is an optional policy purchased by guests that protect them from involuntary cancellation of their charter vacation due to health issues, cancelled or delayed flights and other valid reasons such as loss of your job. A policy of “cancellation for any reason” can also be purchased at extra cost.
It’s my intent to explore the issue of Trip Cancellation Insurance in more depth so that our clients are aware of the possible reasons for cancellation, what is covered and what is not covered.
What
Trip Cancellation Insurance for yacht charters – can reimburse the insured person or persons for trip costs forfeited or lost due to the insured person , or a traveling companion or a family member becoming sick; or the destination has a natural disaster (i.e. earthquake, tsunami etc.) or is no longer safe to visit due to terrorism.
Trip Interruption – can pay for travel arrangements to return home and also pay for trip costs forfeited if the insured is forced to return home because of a disaster or qualifying sickness of the insured, or traveling companion or non traveling family member.
Medical Coverage – can pay for hospital, out-patient, prescription drugs, ambulance costs etc. if the insured is sick or injured during travel (some plans have pre-existing condition exclusion).
Evacuation Coverage – in the event of a grave emergency due to medical reasons or disaster circumstances then the plan can pay for costs to evacuate the insured to the closest adequate safe medical facility (some plans can fly to your hospital of choice close to your home).
Baggage Loss, Travel Delay etc. – can pay for loss of travel bags; a hotel accommodation cost if there has been considerable flight delay etc.
Why
In the event you are unable to start the trip or have to cut short your trip then Trip Cancellation and/or Trip Interruption Insurance can pay for the non refundable unused portion of your trip. So, if one of the travelers or a family member of the traveler is sick then the insurance shall pay for the money lost.
In the event of the traveler having to interrupt or cut short a trip then the insurance can also pay for the transportation costs to return home.
Also, if there have been acts of terrorism or a hurricane and your destination city is unsafe then the insurance can pay for the lost trip investment; if you are already at your travel destination then the plan can pay for evacuating you to safety.
Of course, most US domestic insurance plans including Medicare do not provide benefits if you are outside the US. These yacht charter trip cancellation insurance policies can provide for hospital and outpatient treatment costs during the insured’s travel.
Most travel cancellation insurance plans can provide medical evacuation to the closest adequate medical facility; while some specialized plans can fly you home to the hospital of your choice.
How
Use our handy direct link to Travel Guard Insurance by clicking on the charter insurance link on that page. OR, send us a quick email via the contact form on this site, and we’ll give you the contact information for other reliable travel insurance providers.
In summary
Because trip cancellations and refunds of your deposit or the entire amount of your charter are NOT REFUNDABLE per most charter contracts. Cancellation penalties are the largest part of your exposure in most cases, however, there are numerous other coverage’s in travel insurance that could also come into play.
Many U.S. health insurance polices don’t cover you in foreign countries, making the emergency medical protection in travel insurance a huge benefit. There are other, smaller coverage’s, such as baggage protection and expenses for missed connections that also add to the value of buying travel insurance.
Remember
Even if you are insured, you cannot cancel for any reason. There has to be a good reason and most claims stem from health issues. The only exception is that certain policies, at extra cost, allow cancellation for ANY reason but you only get a certain % of your investment back.
A word about the Caribbean and the Hurricane season that extends from June through the end of November. Upon request, most boats will agree to a “rain check” clause that, in the case of a Hurricane or Named Storm, will allow you to re-schedule your charter at a later date by mutual agreement.
If this clause is a part of your charter contract (also know as a hurricane addendum) then the insurance company will not refund you. So no double dipping!
Remember, also, you cannot cancel for crew changes, for example, if you booked the boat because you liked the look of the crew, remember that crews move on, get sick, have emergencies just like the rest of us. It is NOT grounds for cancellation if there is a crew change. The owner always has the option to place another qualified crew on board, it’s in the contract.
Bottom Line
Under the terms of a charter agreement or charter contract, both you, the charterer and the owner of the vessel have responsibilities.
The contracts are usually pretty standard in this respect: the owner has to place the boat at your port of embarkation in good condition and with a qualified crew on a certain date and time and safely return you to your port of disembarkation on a specified date and time. You agree to pay him x amount of $ or Euros in exchange for this service.
If the contract is breached, the insurance will NOT pay for it, it’s a legal matter that can be resolved by the charter yacht associations dispute resolution mechanisms, mediation, arbitration or other legal recourse.
Insurance is designed to fill in the gaps and mitigate losses incurred by the charterer by the unforeseen issues that are not addressed in the contract.
