Hidden Fees and Fine Print: How to Compare Yacht Ownership Contracts
Yacht Owner Protection: What Happens After Storms, Damage or Major Repairs?
In short: Owners in The Moorings Yacht Ownership Program are protected by a professionally managed structure that includes insurance, maintenance, repairs and claims management throughout the program term. When unexpected damage or major weather events affect a yacht, The Moorings coordinates the response rather than leaving the owner to manage repairs or insurance independently. Guaranteed income is also contract-based and continues regardless of whether the yacht is chartered in a particular month.
Buying a yacht is exciting. Thinking about what happens if that yacht is damaged in a storm, grounded by a charter guest or temporarily taken out of service is considerably less exciting. But understanding how those situations are handled is an important part of choosing the right ownership program.
The important distinction is not whether unexpected events can happen. Yachts operate in environments where weather, equipment failures, and accidental damage are realities. The better question is: Who handles the problem when something does happen?
In The Moorings Yacht Ownership Program, the answer is designed to be straightforward. During the program term, The Moorings manages the yacht, maintains the required insurance, coordinates maintenance and repairs, and processes insurance claims.
If you have already read our guide to yacht ownership contracts and fine print, this is where one of those contract provisions becomes very practical: understanding who carries the responsibility when the unexpected happens.
What Protection Is Included in The Moorings Yacht Ownership Program?
One of the major differences between conventional private yacht ownership and a professionally managed program is who carries the day-to-day operational responsibility.
Under The Moorings management agreement, the charter company is responsible for berthing, inspecting, maintaining, servicing, and repairing the yacht during the program. Operating expenses including insurance, dockage, routine maintenance, cleaning and haul-outs are also handled by the charter company. The Moorings additionally processes warranty and insurance claims on the owner’s behalf.
That means something very practical for an owner: if a charter guest damages the yacht, an engine requires repair, or rigging is damaged during charter operations, the owner isn’t suddenly expected to find a repair facility, negotiate with technicians, arrange insurance or pay the normal repair bill.
For a broader explanation of everything handled within the program, The Moorings Yacht Ownership Program explains how professional yacht management fits into the ownership model.
What Happens When a Yacht Is Damaged?
For damage that occurs during normal charter operations, the process is managed by The Moorings. The yacht is evaluated, necessary repairs are coordinated, and an insurance claim is processed when appropriate. The management agreement places both yacht repairs and insurance-claim processing within the charter company’s responsibilities.
That distinction matters because owners aren’t being asked to manage a remote repair from hundreds or thousands of miles away.
It also means that charter-guest damage is not treated as an owner’s personal expense. Under the management agreement, an owner has no responsibility for the insurance deductible on a covered claim unless the damage or loss occurs during the owner’s own period of use.
What Happens Before and After a Major Storm?
Protection begins before damage occurs.
The management agreement allows The Moorings to move or furlough a yacht at its own expense in response to force-majeure events. The agreement also prevents the yacht from being knowingly operated or located in areas excluded from the required insurance coverage.
If a storm does cause damage, the yacht is assessed and repairs and any necessary insurance process are handled through the program. Depending on the severity of the damage, those processes may happen at the same time rather than in a rigid sequence. For the owner, the important point is that The Moorings coordinates the response rather than leaving the owner to manage it independently.
Does Guaranteed Income Continue if the Yacht Can’t Charter?
This is one of the most important questions an owner can ask.
In the Guaranteed Income Program, the monthly owner revenue payment is defined by contract and is not dependent on whether the individual yacht is chartered in a particular month.
There is also a real-world example. After Hurricane Irma, Moorings owner George Psaros reported that the yacht was out of service for eight months, yet “every check arrived from The Moorings, on time.”
That is an important distinction between repairing the physical yacht and protecting the owner’s financial expectations under the program.
For more on how those payments work, see how Guaranteed Income Yacht Ownership works.
How Much Insurance Protection Does the Yacht Have?
Under the current management agreement, The Moorings procures and pays for the yacht’s operating, delivery, and charter insurance. Both the owner and charter company are named as insureds, with coverage also extending to charterers as additional insureds for applicable hull and liability protection.
Hull insurance is tied to the yacht’s original total selling price and adjusts as the yacht ages:
| Program period | Hull insurance minimum |
|---|---|
| Closing year | 100% of total selling price |
| First calendar year after closing | 100% |
| Second calendar year | 85% |
| Third calendar year | 75% |
| Fourth calendar year | 65% |
| Fifth calendar year | 55% |
| Sixth calendar year | 50% |
The agreement also provides protection and indemnity coverage of at least $10 million.
The percentage schedule matters because it gives owners a clear understanding of how insured hull value changes as the yacht ages rather than leaving that question undefined.
What Happens During Owner Use?
The yacht remains within The Moorings program and insurance structure during owner use, so owners do not need to arrange a separate yacht insurance policy simply because they are aboard their yacht. If damage occurs during an owner’s period of use, however, the applicable security deposit or deductible may become the owner’s responsibility. The management agreement specifically distinguishes owner-use damage from damage that occurs during normal charter operations.
In practical terms, owners are not responsible for damage caused by charter guests or for normal maintenance and repairs during the program. The owner’s potential out-of-pocket responsibility applies when damage occurs during the owner’s own period of use. This allows the yacht to remain fully insured within the program while keeping responsibility for owner-caused damage similar to what a guest would experience when chartering.
What Happens in the Most Serious Damage Scenario?
Although uncommon, buyers should understand what happens if damage is severe enough that the yacht is determined to be an actual or constructive total loss.
The insurance responds according to the insured value applicable at that point in the ownership term, based on the hull-value schedule outlined above. If the yacht is financed, the management agreement includes a lender loss-payable provision naming the owner’s lender as loss payee. A total loss also ends the management agreement for that yacht.
That does not necessarily mean the owner’s relationship with The Moorings has to end. An owner can choose to purchase another yacht and enter the program again, and the Yacht Ownership team can assist with that transition.
The reason to discuss this scenario isn’t to make ownership sound risky. It is the opposite: a buyer should know the answer to the difficult questions before ever needing it.
What Should You Know About Owner Protection Before Choosing a Program?
When comparing yacht ownership programs, don’t stop at “insurance included.” Find out who purchases and pays for the policy, who handles repairs and claims, how the yacht’s insured value changes over time, and what happens to owner income if the yacht is temporarily out of service.
You should also understand what, if any, financial responsibility applies while you’re personally using the yacht. These details give you a much clearer picture of how well you’re actually protected when something unexpected happens.
Frequently Asked Questions
Who pays for insurance in The Moorings Yacht Ownership Program?
The Moorings procures and pays for the required operating, delivery and charter insurance during the management-agreement term.
Who pays if a charter guest damages my yacht?
The owner is not responsible for the hull-insurance deductible on covered damage unless the damage occurs during the owner’s own use. Repairs and insurance claims during the program are managed by The Moorings.
Am I insured when I personally use my yacht?
The yacht remains within the program’s insurance structure during owner use. However, if the owner causes damage while using the yacht, the applicable security-deposit or deductible responsibility may apply.
What happens if a hurricane damages my yacht?
The Moorings can take preventive measures such as moving or furloughing yachts when appropriate, and if damage occurs, the program handles assessment, repairs, and applicable insurance claims.
What happens if the yacht cannot be repaired?
If the yacht is determined to be an actual or constructive total loss, insurance responds according to the insured-value schedule in the agreement. If financing exists, the lender is named as loss payee under the policy.
Does guaranteed income stop while my yacht is being repaired?
The Guaranteed Income model is contract-based rather than dependent on the individual yacht’s charter activity.
The Bottom Line
Owner protection isn’t just about having an insurance policy. It’s about knowing who takes responsibility when something unexpected happens.
In The Moorings Yacht Ownership Program, insurance, scheduled and unscheduled maintenance, repairs, and claims processing are handled through the program during the management term. Owners aren’t expected to independently coordinate repairs after charter damage or arrange separate insurance for normal participation in the program.
Owners do retain responsibility when they personally cause damage during owner use, which is why understanding the security-deposit and damage provisions matters. But that is very different from being responsible for every repair, storm event, or charter-guest incident involving the yacht.
For many buyers, that’s the real value of professionally managed yacht ownership: you own the yacht, but you don’t have to manage every problem that comes with it.
Katie Campbell
Katie is the Yacht Sales Marketing Manager for The Moorings Yacht Ownership. She loves to create content that helps buyers understand how ownership works and what to expect along the way.
