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05/14/2024
Insurance Insights
Inflation: The Impact on Yacht Values - When to Adjust Your Insured Sum
Inflation fluctuation can sway the value of your yacht. Discover when and how to adjust your insurance coverage accordingly.
In today's boating world, it's hard to ignore the impact of inflation on yacht values. With shipyards bustling and dealers negotiating deals at much higher prices than just 18 months ago, nearly new boats have seen a notable surge in worth - around ten percent compared to pre-2022 levels.
This rise is not limited to vessels alone; accompanying equipment like trailers, electronics and engines have also seen increased value. Whether it is a tech upgrade or a refit, any investment made in a boat has the potential to enhance its overall value.
However,with these rising values, comes a responsibility for us as boat owners: ensuring our insurance cover keeps pace. Imagine if your vessel's value has significantly increased since you last updated your policy. Timely communication with your insurer becomes crucial in such scenarios, as your policy insures your boat for a specific value. Any substantial increases or alterations must be promptly reported, including adjustments for trailers.
But does the call to adjust insured sums apply to everyone? Not necessarily. It depends on whether there is an actual increase in value, which may not be the case for every type of vessel. Moreover, insuring an ageing boat at a new value might not be financially wise due to higher premiums. If you are unsure about navigating these waters, seek guidance from the experts at your insurance company.
When it comes to making a claim, things can get tricky. While many insurers reimburse based on the current value of your vessel, Pantaenius takes a different approach. They fix the vessel’s value in the policy, ensuring reimbursement without deductions linked to the current market value. This can be particularly vital for older boats, providing stability in uncertain seas and adequate cover for material damage in the event of a total loss.
Custom yachts, as unique as their owners, present their own valuation challenges, especially if they are older or highly customised. In such cases, it is wise to have a valuation done before finalising the deal, considering every aspect of the vessel’s features and condition. Don’t forget to document any increase in value with invoices and receipts for significant refits.
As we negotiate the currents of inflation and depreciation, staying informed and proactive is key. By keeping a keen eye on your vessel’s value and ensuring your insurance cover is up to date, you can sail confidently into the horizon, knowing that your marine investment is securely anchored against the winds of change.
