Agreed Value Boat Insurance for Florida Yachts

Agreed Value vs. Actual Cash Value: Why It Matters on Your Hull

An actual cash value policy pays the market value of your vessel at the time of loss, minus depreciation. On a ten-year-old fiberglass motor yacht, that calculation can leave you well short of what you need to replace the boat. An agreed value policy eliminates that variable. The insured value is locked in at inception, and a total loss pays that figure in full, subject to the policy's terms and any applicable deductibles.

Partial losses are handled differently. Under most agreed value forms, partial damage is settled at the cost of repair, without a depreciation reduction applied to parts and labor. That matters when you're replacing electronics, running rigging, or a diesel engine after a grounding in the Exumas — the repair bill is the repair bill, not a depreciated fraction of it.

Your agreed value should reflect a realistic replacement cost, not a sentimental one. Underwriters will ask for a recent survey — typically within three to five years — and the surveyor's replacement value figure anchors the conversation. If your agreed value is significantly above the surveyed figure, expect underwriters to push back or apply a co-insurance condition. If it's below, you're self-insuring the gap.

Named Storm Deductibles and Your Hurricane Plan

Florida-based yachts face a named storm deductible that operates separately from your standard all-risk deductible. This deductible is expressed as a percentage of the agreed value and applies whenever a named tropical system — tropical storm or hurricane — is the proximate cause of loss. The Atlantic hurricane season runs June 1 through November 30, and your policy's named storm provisions are active throughout that window.

Most specialist underwriters require a written hurricane plan as a condition of cover. That plan needs to specify where your vessel will be during the season — whether that's a hardened marina in South Florida, a hurricane hole in the Bahamas, or a haul-out facility on the Gulf coast — and what actions you'll take when a storm threatens. Failure to follow your approved hurricane plan can give underwriters grounds to reduce or deny a named storm claim, even on an agreed value policy.

If you plan to cruise south of the Tropic of Cancer during hurricane season, your navigation limits and hurricane plan need to reflect that explicitly. Some underwriters treat the Eastern Caribbean as a lower-risk zone during season and will extend cover there under specific conditions; others require the vessel to be south of a defined latitude by a fixed date. Get that language in writing before June 1, not after a storm is named.

The named storm deductible is one of the most significant out-of-pocket exposures on a large yacht. When you're reviewing your renewal, ask your broker to walk you through the exact trigger language — whether it's a named storm watch, warning, or actual landfall — because the trigger point affects when your deductible applies and whether repositioning costs before the storm are covered under sue-and-labour provisions.

Navigation Limits, Lay-Up, and What Happens When You Leave Them

Your policy's navigation limits define the geographic area within which your hull and machinery cover is active. A typical Florida-based policy might cover the US East Coast, the Bahamas, the Caribbean as far south as a specified latitude, and the Gulf of Mexico. Cruising outside those limits without a prior endorsement voids your hull cover for any loss that occurs while you're outside the approved area — agreed value or not.

Lay-up periods, if your policy includes them, specify dates during which the vessel must be out of commission and either ashore or in a designated berth. Lay-up conditions typically come with a reduced premium credit, but they also restrict where the vessel can be and what activities are permitted. Operating the yacht commercially or taking it offshore during a lay-up period can void cover for that period entirely.

If your cruising plans change mid-policy — a delivery run to the Virgin Islands, a season in the Grenadines, a transit through the Yucatan Channel — contact your broker before you go, not after you arrive. Navigation limit endorsements are generally straightforward to arrange when there's time; they become complicated when you're asking for retroactive cover after a loss.

Captain, Crew, and MLC 2006 Obligations

If you operate your yacht with a paid captain or crew, your insurance program needs to address their welfare explicitly. The Maritime Labour Convention 2006 (MLC 2006) sets minimum standards for crew employment, accommodation, medical care, and repatriation. For yachts over 500 gross tons operating commercially, MLC 2006 compliance is a flag-state requirement. Even for smaller yachts with paid crew, the convention's standards represent the baseline your crew welfare cover should meet.

Protection and indemnity (P&I) cover for crew includes your liability for injury, illness, and death under the Jones Act if your crew are US seafarers, and under general maritime law for foreign crew. Jones Act liability is uncapped and can be substantial — your P&I limit needs to reflect the realistic exposure of your crew complement, not a round number chosen at inception.

If your captain is employed directly by you rather than through a management company, you may also have employer's liability exposure that sits outside standard P&I. Your broker should confirm whether your P&I form covers this or whether a separate crew personal accident policy is needed. For vessels operating with a USCG-licensed captain under a bareboat or crewed charter arrangement, the employment structure affects which party carries the crew liability — get that confirmed in writing before the charter season starts.

Charter Use and What It Changes on Your Policy

Using your yacht for charter — whether crewed charter, bareboat, or occasional term charter — changes your risk profile materially. Most private pleasure policies exclude commercial use, and a charter that generates income almost always qualifies as commercial use under the policy's definitions. Operating under a charter without the correct endorsement means your hull and P&I cover may be void for the duration of that charter.

A charter endorsement or a commercial yacht policy adds cover for charterer's liability, loss of charter hire following an insured loss, and in some cases, passenger liability. Your charter contract will likely require you to carry a minimum P&I limit and to name the charterer or charter company as an additional insured — your broker needs to see the charter contract before binding the endorsement, not after the charter departs.

For vessels operating under a USCG Certificate of Inspection or carrying passengers for hire, the regulatory requirements layer on top of the insurance requirements. US Coast Guard documentation, your vessel's stability letter, and your captain's license grade all feed into the underwriter's assessment. Bring all of that to your broker at renewal, not piecemeal during a claim.

What to Bring When You Request a Quote or Renewal

Specialist underwriters work from a complete submission. The more complete your information at the outset, the faster your broker can get you a firm quote — and the less likely you are to face a coverage condition you didn't expect.

A typical agreed value submission for a Florida-based yacht includes the following:

• Current marine survey (within three to five years, or more recent if the vessel has had significant work done)
• Vessel particulars: LOA in feet, beam, draft, year built, builder, hull material, engine make and hours
• Agreed value you're seeking and the basis for it (survey replacement value, recent appraisal, or purchase price)
• Navigation limits you need, including any planned Bahamas, Caribbean, or Gulf coast cruising
• Hurricane plan or intended lay-up arrangements for June 1 through November 30
• Captain's USCG license grade, sea service record, and loss history for the past five years
• Crew complement and employment structure (direct hire, management company, or owner-operated)
• Charter use details: frequency, crewed or bareboat, charter company name, and a copy of the standard charter contract
• Current P&I limit and any existing coverage you want to replace or layer
• Claims history for the past five years on this vessel and any prior vessels you've owned

Frequently asked questions

Do I need an agreed value policy, or is actual cash value good enough for my boat?

For most yachts over 35 feet, actual cash value cover leaves a meaningful gap between what the policy pays on a total loss and what it costs to replace the vessel. Agreed value eliminates that gap by locking in the insured amount at inception. If your yacht has appreciated — custom builds, refit-heavy vessels, and well-maintained classic yachts often do — agreed value is especially important because market value at the time of loss may be higher than a depreciated ACV calculation would reflect.

What happens if I'm in the Bahamas when a named storm forms and I can't get back to my approved hurricane plan location?

Your policy's named storm provisions and hurricane plan language will govern this. Some policies include a 'caught out' provision that covers you if you're unable to reach your approved location due to the speed of the storm's development, provided you take all reasonable precautions. Others require you to be at the approved location by a fixed date regardless of conditions. Read that language carefully before hurricane season, and if it's ambiguous, ask your broker to get written clarification from the underwriter before June 1.

My charter contract requires me to carry USD 5 million in P&I. Is that standard?

Charter operators and management companies routinely specify minimum P&I limits in their contracts, and USD 5 million is a common threshold for crewed charter yachts in the Caribbean and Bahamas. Whether that limit is adequate for your specific vessel, crew complement, and trading area is a separate question. Your broker should review the charter contract's insurance requirements alongside your actual exposure — passenger capacity, crew count, and the jurisdictions you'll be operating in — and confirm that your P&I form responds to the indemnity obligations the charter contract creates.

How long does it take to bind agreed value hull cover for a Florida yacht?

With a complete submission — current survey, vessel particulars, captain's credentials, navigation limits, hurricane plan, and loss history — a specialist underwriter can typically turn around a firm quote within a few business days. Incomplete submissions take longer because underwriters will come back with questions before they quote. If you're approaching hurricane season or a planned departure for the Bahamas or Caribbean, give yourself at least two to three weeks before your intended departure date to allow for back-and-forth on terms.

Does my agreed value policy cover my dinghy and tender?

Tenders and dinghies are often covered as scheduled items under the main hull policy, but the cover terms — including whether they're covered when deployed away from the mother vessel — vary by form. High-value tenders, jet skis, and chase boats may need to be scheduled separately with their own agreed values. Confirm with your broker exactly how your tender is described in the policy and whether the cover follows it when it's in use independently.

What does 'sue-and-labour' mean and why should I care about it?

Sue-and-labour is a provision in your hull policy that covers reasonable costs you incur to prevent or minimize a covered loss. If a storm is approaching and you hire a professional crew to move your vessel to a safer location, or you pay for emergency haul-out to protect the boat, those costs can be recoverable under the sue-and-labour clause — even if the storm ultimately causes no damage. The key word is 'reasonable': document what you did, why you did it, and what it cost. Your broker should confirm that your policy's sue-and-labour clause is broad enough to cover pre-storm repositioning expenses, not just post-loss salvage.