Without Watercraft Insurance, High-Net-Worth Sea-goers Miss the Boat

To celebrate the Buccaneers’ Super Bowl victory in February, Tampa officials hosted a festive boat parade along the city’s Riverwalk for fans and players. One celebrant stood out among the others.

Super Bowl LV Most Valuable player Tom Brady showed up in style, aboard his custom Wajer Yachts 55S. Named Viva a Vida to honor wife Gisele Bundchen’s environmental initiatives, Brady reportedly purchased the $2 million, 53-foot launch in December 2020.

Life on the open waters in a runabout, sailboat or yacht is increasingly becoming a favorite pastime of high-net-worth athletes like Michael Jordan and Tiger Woods and musicians, such as Bono and Billy Joel. Despite the pandemic and an uncertain economy, high net worth individuals and their families are turning to watercraft to enjoy the peace of the sea.

Sales of boats, marine products and services across the country leaped to a 13-year high in 2020 to $47 billion, increasing 9 percent from the prior year, according to the National Marine Manufacturers Association. Charlie Graham, a national HNW Business Development Executive at Orchid Insurance, said the trend shows no sign of slowing down.

“Dealerships are struggling to maintain inventory and manufacturers are expanding production capacity to meet the increased demand,” said Graham. “Even more surprising, first-time buyers are entering the market in larger numbers. That’s a signal that the growth has staying power.”

Sink or Swim

Graham said insurance agents who service high-net-worth individuals should take notice and reach out to new and experienced watercraft owners to charter a course that protects their investments.

“The risks of owning watercraft tend to keep pace with the demand for boats,” said Graham. “New navigation technology and tools for automated sailing can make anyone, even the most inexperienced sailor, feel like a captain. What is crucial to understand are the underlying risks. Without adequate training or a seasoned crew, launching, steering, and docking can still be challenging, especially in rough seas.”

Graham said Orchid provides partner agents with access to watercraft insurance, an umbrella term that protects vessels powered by motors with at least 25 mph horsepower. Typically, yachts, boats and personal watercraft fall under this coverage.

Although watercraft insurance is not required in many states, many boat owners opt to purchase coverage to protect against physical loss or damage to a vessel, theft and towing and, depending on the policy, safeguards for bodily injury or loss of life to passengers or guests.

A watercraft insurance policy will usually not cover certain exclusions, such as wear and tear; faulty machinery; or damage from an unnamed operator, marine life, or storage. Policies will vary depending on the size of the vessel and where it is stored at certain times of the year.

Get on Board

Graham said about half of all watercraft owners are underinsured, which makes it even more important for agents to understand the intricacies of what is at stake and the insurance options available. The first step she said is to choose a carrier. Orchid helps agents select from a stable of carriers including Chubb, AIG, Vault, and National General Premier. A strong policy will offer protection for both the owner and against bodily injury caused by an uninsured, underinsured, or unidentified boater.

“Anything can happen on the water,” said Graham. “If you wouldn’t drive an expensive sports car without insurance, you should invest in either a large yacht or a more modest ski boat without coverage either.”

Orchid Insurance accesses the industry’s leading providers of admitted specialty high net worth insurance including Chubb, AIG, Vault, and National General Premier to streamline agent and broker operations and underwrite the sought-after coverages that your client needs. Make no mistake about it: Orchid Insurance is the First Choice for your high-net-worth solutions. https://orchidinsurance.com/