Hugo Hanham-Gross founded Hanham Insurance Agency with the aim of providing yacht owners tailored yacht insurance coverage and exceptional client service. He has since built a reputation among cruisers for exceptional client service, the best coverage and competitive premiums. Hugo is also our own insurance broker and he has done a great job for us and all of our clients. He has helped several of our clients with insurance claims, with the best possible outcomes. We highly recommend Hugo!
What is your agency’s name, location and who is the underwriter? Who handles claims? Where do you provide insurance coverage?
Hanham Insurance Agency is a specialist yacht insurance brokerage with a strong focus on attentive, fast client service. Hanham Insurance Agency is based in Charleston, SC and specializes in coverage for yacht owners on the US East Coast and Caribbean but are able to cover cruisers worldwide.
Hanham Insurance Agency writes with most US Carriers as well as Lloyd’s of London carriers. Each carrier has an in house claims service, but Hanham Insurance Agency remains involved in the claims process to ensure that clients are treated fairly. A claim is always a stressful situation and Hanham Insurance Agency guides their clients through the whole process. While they are selective about the clients they work with, they are always happy to have a conversation and advise any boat owner that needs help with insurance.
Frequently Asked Yacht Insurance Questions
Hugo addresses some of our readers questions in this article and give recommendations and considerations to get the most value out of your insurance policy.
Why is price not the most important factor when considering boat insurance?
Coverage and claims service are the only reason that you are purchasing insurance, so ask your broker how the claims service has been. The simple question: “Has this carrier treated other clients well during claims” is the single most important question you will ask. While the premium is not always an indicator for the quality of a policy, there is usually a reason why certain premiums are higher. The most important factor when considering an insurance policy is coverage. If one premium is significantly lower than other premiums, as your broker why this is, and you will usually find there is a reason.
What does uninsured/underinsured cover?
Most policies define this differently, but usually this is the coverage that responds if someone who is uninsured or underinsured damages your vessel or hurts people on board your vessel.
Is it okay to purchase an Actual Cash Value policy?
If having the lowest premium possible is the most important consideration, then this policy may be the best option for you. The issue with having an Actual Cash value Policy (ACV) is that you don’t really know how much you will receive in the event of a total loss. The carrier will usually adjust the value of the vessel and it’s rare that a boat owner will receive what they feel the vessel is worth.
If I have a total loss, what will I get for my boat?
So long as your loss is a covered loss, in a total loss claim if the policy is an Agreed Value policy, then the amount you will receive will be listed under the Agreed Value section of your policy declaration page (The page that shows the coverage limits). It is important to note that in a total loss scenario, sometimes referred to as a Total Constructive Loss, some carriers do not apply the deductible. If your policy is an Actual Cash Value (Sometimes Called ACV) policy, the carrier will calculate the value of the vessel and pay you what they deem the value to be.
If I have a partial loss, for example I hit a rock and damage the stern drive, will you use aftermarket or rebuilt parts to repair it?
This depends on whether the policy depreciates individual items in a partial loss claim. If the policy depreciates individual items in a partial loss claim then you will receive a percentage of the value of the item. If the policy does not depreciate individual items, then the carrier will replace the item with a new item or pay you what a new item will cost to replace. It is important to discuss this with your broker and read your policy wording, which may contain a depreciation schedule for individual items.
Why will you not allow the boat to be insured for more than the purchase price?
Yacht insurance policies are indemnification policies meaning that in a loss you are supposed to restored to your previous financial position before the loss. It is possible to insure a vessel for more than the purchase price, but the underwriters will need to see a list of upgrades and the associated values of these upgrades.
Here is the basic formula: Insured Value = Vessel Purchase Price + Material Upgrades (excluding labour).
There are some circumstances where a boater pays well below the fair market value and the carrier will approve a higher hull value, but usually the carrier will deem the purchase price as an indicator of fair market value.Historically there have been fraudulent losses where a vessel was insured for more than the purchase price and was purposely sunk.
How can I save money on my boat insurance? i.e. Navigational territory / Location / Education / Deductible?
- Be specific about your cruising plans. Geographical exposure to hurricanes is the number 1 reason that most premiums are so high. The further north and the further South of the Caribbean that you are able to be, the lower your premium will be. This being said, it is important to be realistic about where you will be during hurricane season. All too often I have seen boaters save premium up front by stating that they will be out of the hurricane box, and having to rush to update their navigation to stay in the box when they were unable to follow their original plan. This always ends up costing more premium in the end.
Call your broker and have a 5-minute discussion about what your cruising plans are because he/she will be able to tailor this coverage so you aren’t paying for navigational allowance you do not need.
- Adjust your deductible. It is important to carefully and realistically consider how much you are willing to spend out of pocket if you have an accident. If you are able and willing to pay more if you have a claim, then increase your deductible and you will see the premium decrease.
- Update your CV and sell your experience. For yachts over $100,000 value, your broker will be speaking with a human underwriter, so equip your broker with the tools he needs to negotiate for you.
What is included in the Insured Value?
Insured value, or Hull Value includes the vessel described on the declaration page, including machinery, electrical equipment, sails, masts, spars, rigging, and all other equipment normally required for the operation and maintenance of the vessel and situate on the Scheduled Vessel, which would normally be sold with the vessel.
Tenders, Toys, Personal Property, Life rafts, Fishing Equipment and other items must be listed separately on the declaration page.
If I purchase a $2 million liability limit, does this mean the $2 million extends to dinghy?
Most insurance policies extend liability coverage to include damage done by the tender. It is important to refer to your policy wording for this.
Does the $2 million extend to pollution liability?
Usually the pollution coverage is up to the statutory government minimum, or your policy 3rd party liability limit, whichever is less.
Does the policy cover Emergency Towing? What is covered under Emergency Service and Towing?
Most policies cover emergency towing, which is the towing you need in order to get to a safe harbour after a breakdown or an emergency situation. Most policies will not cover you if you are broken down at bone marina and need to move to another marina. It’s always worth getting the $150 Sea Tow membership so that you don’t have to file a claim.
I was told I need a marine survey. How often is it required?
Where do I find one?Each carrier has different survey requirements, but generally carriers require a new out of water survey for vessels older than 5 years once every 3-5 years. Most carriers will require that the surveyor have an accreditation from either SAMS or NAMS. 3 years will go by quickly, so it’s important to ask your broker what year your carrier will require a new survey and mark it in your calendar so you have plenty of time. The last thing you want to be doing is rushing last minute to find a haul out and surveyor.
What are navigation limits?
Navigational limit is the geographical area that your vessel is allowed to be. For Caribbean cruisers most carriers have date restrictions on where you can be during hurricane season. Many yacht owners refer to this as the “Box”. Once you explain to your broker what your cruising plans are, he will then tailor your policy to include the navigational limits you need. It’s important to understand your navigational limits because a carrier can deny a claim if you are outside your allowed limits.
Can I obtain coverage for my boat if I charter it?
Paying passenger liability sometimes referred to as “charter coverage” is available from certain carriers. If you think that you might charter your vessel within your existing policy period (the next 12 months), then it is best to ask your broker to place you with a carrier that will easily be able to endorse charter coverage at a later date. Adding passenger liability coverage will increase your premium.
Will my rates be higher as a new boat owner?
As a new boat owner your rates will most likely be higher than that of someone who has owned a similar vessel for a while. One if the largest factors when an underwriter decides what rate to charge is your experience. If you have not owned a boat before, speak with your broker and make sure that you explain what other relevant experience you have. A good broker will ask that the carrier consider all relevant experience you have. (friends boats, charter, training, etc