Information on Charter Insurance
Charter companies require protection against potential damage to the boat and its equipment when chartering a boat. As part of this process, the client is asked to provide a Security Deposit, a form of financial guarantee that the company may use in the event of damage.
It is important to note that this deposit is not charged in advance but is instead held as a credit card authorization (hold). In case of damage, the company is entitled to collect the corresponding amount, depending on the extent of the damage. These deposits often amount to several thousand euros, making them a significant financial risk and potential burden for the client.
In recent years, many charter companies have developed specialized insurance solutions to address this challenge and reduce the client's financial exposure.
There are two main insurance options:
1. Security Deposit Reduction
In this option, clients can purchase insurance to significantly reduce the required deposit amount. For example:
If the original deposit is €5,000, the client can pay a one-time fee (e.g., €350) and reduce the deposit amount to just €1,000.
Pros:
- Lower insurance cost compared to full coverage
- Reduces the amount blocked on the client’s credit card
Cons:
- The insurance payment is non-refundable
- In the event of damage, the charter company may charge up to the reduced deposit amount (e.g., €1,000 in this case)
2. Damage Waiver (Full Insurance)
Some charter companies offer full coverage insurance, similar to the “Drop the Key” concept in car rentals. In this option:
- The client pays a higher one-time insurance fee (compared to the deposit reduction plan)
- No credit card authorization is required
- The charter company assumes full responsibility for any damage
In certain cases, companies even use this option as a marketing tool, charging the full insurance price but offering a partial credit (voucher) toward the client’s next booking with them, encouraging customer loyalty.
External Insurance
In addition to the insurance plans offered directly by the charter companies, there are also external options available through independent insurance providers, such as EIS, Schomacker, and others.
- When purchasing external insurance, the charter company will still require the full deposit to be blocked on the credit card.
- In the event of damage, the company will charge the appropriate amount from the deposit, and the client must then file a claim with the external insurance provider to be reimbursed.
- In such cases, thorough documentation is essential: a completed damage report, photographs, and a clear explanation of the incident will be required to submit a claim.
It’s also worth noting that some travel insurance policies include limited coverage for boat damage. However, this is usually partial and for relatively small amounts. Additionally, the full deposit will still be blocked and potentially charged by the charter company, requiring the client to seek reimbursement from the travel insurer.
Recommnded "External Insurance" Companies
We highly recommend checking out the insurance options below
YACHT-POOL
- Skipper Lability
- Deposit Insurance
- Cancellation Insurance
Sealogy
- Extended Skipper Third-Party Liability Insurance
- Charter Deposit Insurance
- Charter Price Contingency Insurance
In Summary
When choosing an insurance option, consider the following factors:
- Type of sailing: your experience level, sea conditions, boat size
- Risk preference: whether you're comfortable with the full deposit risk or prefer to reduce it
- Budget: the cost difference between options is typically a few hundred euros
Each option has advantages and trade-offs, and the right choice depends on the client's preferences and desired level of peace of mind while at sea.
We recommend contacting the charter company directly to understand their insurance policy and receive their specific recommendations.