Yacht insurance in Ukraine: policy types, how the price is formed

In Ukraine, little is known about how marine insurance works and what factors affect the cost of a policy. All because 90% of owners of small boats in Ukraine are not insured. The reasons are quite simple: the Cabinet of Ministers of Ukraine did not regulate the insurance of water transport vehicles (Article 7), and as a result, we have inflated premiums, deductibles and no experience in “accidents on water”.

Types of policy

Everything is simple here, just like with cars: there is an OSAGO – called Third Party Liability (TPL), there is a CASCO – called Hull & Machinery (H&M).

TPL is the insurance of civil liability of the shipowner to third parties, as well as to the environment. Such policy is obligatory in many European marinas in case of damage by the crew of other boats (in case of loss or damage to another vessel / property; of harm to the life / health of third parties; damage incurred during any attempt or direct lifting, removal \ destruction of the wreckage of the insured vessel; legal legal costs incurred by the insured). The cost of TPL in Ukraine is 0.3-1% of the liability limit, the deductible is 2-3%. If the boat is less than 28 feet, then we take the minimum percentage, if the boat is closer to 50 feet, then we take a larger percentage.

H&M is insurance for the hull and equipment/materials, including the engine, yacht tender. But if there are jewelry or art on the boat, they cannot be insured.

With H&M you can order insurance against the total loss of the vessel, against damage, or all together (against the dangers associated with navigation; against fire; against emergency dumping of property overboard; in case of collision with a dock, land transport, aircraft; against earthquake, volcanic eruption, lightning strikes; from piracy; from a number of other incidents). In H&M, rate ranges from 0.6% to 1%, depending on the estimated value of the yacht. Ukrainian companies offer a rate of 1.5% of the liability limit with a deductible of 1-2%. Again, if the boat is up to 8 meters, then we take a smaller percentage, if the boat is closer to 15 meters, then we take a higher percentage.

In practice, in Europe, shipowners issue two policies at once: H&M and TPL. If one insurer is not ready to take full responsibility, then H&M is issued in one office, TPL in another. In addition, the interest rate in Europe is lower – starts from 0.15%.

Additionally, the coverage can include: hidden defects in the hull, towed water toys & underwater equipment, participation in regattas, emergency towing, medical expenses, insurance of personal property on board.

Also, the insurance-policy covers the period of winter storage boat (accidents during operations to launch / raise the vessel into the water, reloading or rearranging during storage \ transportation), maintenance of the yacht either loss of the vessel.

The occurrence of an insured event. Case Studies

In case of a collision with another boat, with a pier either with another object in or near the water, it is necessary to record the damage (take a photo, video of boats, get explanations from witnesses). Then notify your insurer, as well as obtain information about the other party. For example, if you are hit by another yacht, you will be compensated for repairs as part of the TPL coverage.

An iron bull drags oil tankers. Greece, Perdika island.

In case of unforeseen weather events, you can receive the full amount of compensation for the damage caused. For example, when lightning strikes your boat (probability 1:1000) or damage was caused by a hurricane, storm, earthquake, tornado, flood.

For the period of participation in active events, such as a sports regatta, an insurer broker may offer you insurance for breaking sails, breaking a mast, losing an anchor, other significant harm to the hull. This is a fairly popular option, since mast repairs can cost 5-15 thousand euros.

Additional medical coverage helps protect guests from expenses during an injury on board. For example, pay for hospitalisation, doctor’s consultations, and a course of treatment.

How to improve your chances of receiving compensation

After you have reported the incident to the insurer, it will assign you a surveyor (an inspector who assesses the amount of loss). It is important here not to complicate the process of restoring the sequence of events and not to delay the notification, description of the incident. In addition, prompt repairs can complicate the recovery of the entire chain of events.

When the insurance company confirms the payment, the insurer will offer to independently choose a contractor for the repair work. In this case, the rule “to prevent or minimise losses” works. What does it mean?

Several options for repair teams with price arguments should be sent to the insurance service. Do not start repairs before the insurer approves the work schedule & the contractor. In practice, the owners do not wait for a response and then receive a denial of payment with the wording: “Moving the boat to location “A” was not economically feasible, – the prices for services in company “A” are too high. Compensation denied.”

Also, do not forget that the insured yacht must always be equipped with the necessary fire-fighting and other equipment to ensure safety on the yacht. On board that during operation there must be all the documents required by the flag state, international rules for this yacht.

It may also be specified that the vessel must be based in a safe? secure place.

How is the price of an policy formed?

The size, age of the vessel are taken into account. A vessel over 10 years old may be required to have an independent survey report (estimation of cost, technical condition).
Insurance history (previous claims)
Type of operation: recreational, commercial.
Participation or non-participation in sporting events.

In Ukraine, when applying for insurance for a boat, also pay attention to the type of hull, motor, the presence of a gas system, the region of navigation and the experience of the skipper.