Rhode Island Insurance Adjuster Exam

When is a yacht policy required instead of a boatowners policy?

1. For boats under 20ft

2. For boats 26ft or longer

3. For jet skis only

4. For any boat regardless of size

The correct answer is: For boats 26ft or longer

A yacht policy is generally required instead of a boatowners policy for boats that are 26 feet or longer. This is primarily due to the increased value, complexity, and range of coverage needs that larger vessels present. Yacht policies typically cater to more significant marine risks, including coverage for equipment, liability, and occasionally navigational areas that a standard boatowners policy may not cover. Larger boats, such as yachts, often require specialized coverage for various factors, such as higher liability limits, navigational limits, and additional equipment that may not be present or necessary on smaller vessels. Given the more complex nature of operating a yacht, the requirements for insurance also become more comprehensive, leading to the necessity of obtaining a yacht policy. Smaller boats, such as those under 20 feet or 26 feet and shorter, typically fall under the boatowners policy category, which is designed to provide adequate protection for the more common recreational crafts and their standard coverage needs. Jet skis and other personal watercraft also usually fall under different types of policies, focusing more on personal watercraft coverage rather than the yacht policy.