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04/30/2024
Insurance knowledge | Boat owner
Inflation: When to adjust the sum insured
Inflation can affect the value of a yacht. Find out when and how to adjust your cover if necessary. At present, inflation in particular is contributing to an increase in the value of yachts. Shipyards and dealers are selling new yachts at significantly higher prices than 18 months ago. As a result, the current value of yachts that are as good as new is also rising. Compared to 2022, before the outbreak of the war in Ukraine and the resulting shortage of raw materials and inflation, the value of yachts has increased by around ten per cent.
Investment can add value
However, it is not only the vessels themselves that have increased in value, but also the extensive equipment, especially trailers. In addition, investment in the vessel can also add value, for example if new electrics or a new engine are installed, or if a major refit is carried out.
Adjusting the sum insured
If the value of an insured yacht has increased, the policyholders must take it into their own hands to declare the increase to the insurer. The vessel is only ever insured for the value stated in the policy. Therefore, if the value increases or if extensive work is carried out, this sum needs to be adjusted. This also applies to the value of the trailer, which should be listed separately in the policy.
When in doubt, ask an expert
But does the recommendation to adjust the sum insured apply to every policyholder? Absolutely not! It only applies to actual increases in value, which do not affect every type of boat. Moreover, once a yacht reaches a certain age, insurance at the value of a new boat can be unprofitable. Owners must also bear in mind that the higher the sum insured, the higher the premium. If you are unsure what to do, it is best to speak to the experts at your insurance company.
Fixed rate or current value?
In the event of a claim, many insurers will only reimburse the current value of the insured vessel. Pantaenius does things differently: With Pantaenius, the value of the vessel is fixed in the policy. This value is reimbursed without deductions of current value if a loss occurs. This is particularly important for older vessels, so that in the event of a total loss, the insured value will at least cover the material damage. It is wise to look through your own policy carefully, and in particular to be critical of the wording relating to the insured value. The most important thing is what it says about replacement value and compensation.
Value appraisals for customised yachts
To determine the insurance value of modern series-produced yachts, Pantaenius uses the prices quoted by shipyards and dealers. However, with older vessels or high-end boats that are very customised, things tend to become more difficult. In such cases, it is advisable to have a valuation carried out before concluding the contract, taking into account the boat's features and condition. And if your boat has undergone a major refit, it is best to document the increase in value with invoices and receipts.