Do I need to purchase insurance when chartering a boat?
This is a common question that many will ask when chartering a boat in the BVI. The simple answer is yes.
You are chartering a million dollar yacht for the week and if it is damaged for any reason you want to be covered. This gives you the peace of mind that you need to relax and enjoy your vacation. For that reason charter agreements always come with insurance.
The damage deposit typically ranges from $2000 – $8000 depending on the boat. This means that if you damage the boat the maximum out of pocket will be whatever the damage deposit is. Many times this is referred to as the “excess” but in American terms this is the “deductible”.
The charter company will authorize the amount on your credit card prior to departure. Authorization is not the same as charging your card but it can impact the limit on your card so you just want to mindful of this when providing them the card to authorize.
If you damage the boat they will charge you up to the amount authorized. If not, they tear up the authorization.
Some charter companies will give you the option to buy down the damage deposit by offering a damage waiver agreement. Some places call these different things but this allows you to buy down the maximum amount you must pay if you damage the boat. This is typically around $400 and it significantly reduces the maximum out of pocket for damages. Many times this will bring the maximum out of pocket damages down below $1000.
The downside to this option is that the charter company will charge you $400 at the time of charter that you will not get back. On the other hand we have been chartering boats for years and it is uncommon for something not to break while on charter. You and your crew are typically on a boat that you are not familiar with and things happen.
Someone put something down the toilet that they are not suppose to or you that will cost you $150. Forget to lock down a hatch that gets pulled loose while sailing thats another $400. Do not ask me how I know 🙂
In any case, if you are bareboating we recommend purchasing the damage waiver. This will allow you to relax and enjoy your vacation so when one of your kids comes to you with a fan in their hand saying they thought it was portable you can just take a deep breath and relax.
If you are with a group of friends we recommend splitting this up front. This insures that you remain friends afterwards!