Hull & Machinery Insurance
Comprehensive protection for your vessel's physical structure and equipment
Hull & Machinery (H&M) insurance is the foundational coverage for any yacht or vessel. It covers physical damage to the hull, structure, machinery, and permanently installed equipment from virtually all causes — accidental damage, grounding, storm, collision, sinking, and more.
What's Covered
- ✓Physical damage to hull, deck, and superstructure
- ✓Engine and mechanical damage from accidental causes
- ✓Grounding and stranding damage
- ✓Storm and weather damage
- ✓Collision with another vessel, dock, or fixed object
- ✓Fire and explosion damage
- ✓Theft of permanently installed equipment
- ✓Salvage costs to recover a damaged or sunken vessel
- ✓Wreck removal costs (essential for Asia cruising permits)
What's Not Covered
- ✗Named Storm damage without Named Storm endorsement
- ✗Wear and tear, gradual deterioration
- ✗Manufacturer defects (covered by warranty)
- ✗Damage while vessel is in excluded geographic areas
- ✗Commercial charter operations under a private policy
- ✗Intentional damage by the insured
Typical Cost
1.0%–2.5% of agreed vessel value per annum, depending on vessel type, age, navigation area, and skipper experience
Ideal For
All vessel owners — H&M is the cornerstone of any yacht insurance programme and required for marina berthing and most Asian cruising permits
Agreed Value vs. Market Value Policies
The most important distinction in hull & machinery insurance is between agreed value and market value (or actual cash value) policies. Under an agreed value policy — the standard for specialist yacht insurers like Pantaenius and most Lloyd's markets — the insured and insurer agree on the vessel's value at the time the policy is written. In the event of a total loss, the full agreed value is paid without depreciation deductions. This provides certainty of settlement and is preferred by most serious sailors.
Market value policies pay out the market value at the time of loss, which may be significantly below the insured value if the vessel has depreciated. For older vessels, market value coverage can result in a substantial shortfall — particularly if you've invested in upgrades and refit work that increases the vessel's sailing quality but may not be fully reflected in market price surveys.
For vessels sailing Asian waters, agreed value coverage is strongly recommended. The cost of salvage, survey, and repairs in remote Asian locations is often comparable to or exceeding the cost in Europe or Australia, making adequate coverage levels critical.
Geographic Coverage Zones in Asia
Hull & machinery policies specify the geographic zone within which coverage is valid. This is critically important for Asian cruising, where different countries present different risk profiles and coverage requirements. Common geographic zone structures include:
Southeast Asia: Typically covers Thailand, Malaysia, Singapore, Philippines, Indonesia, Vietnam, and Cambodia as a defined region. Some policies include Myanmar/Burma as an extension; others exclude it entirely due to political sanctions considerations.
Indian Ocean: Covers passages from Southeast Asia through the Maldives, Sri Lanka, and India. Not all Southeast Asia policies automatically extend to the Indian Ocean — verify this if planning passages to India or Sri Lanka.
Worldwide excluding high-risk areas: Premium policies with worldwide coverage excluding war zones and certain sanctioned territories provide maximum flexibility for long-range voyages.
When purchasing hull & machinery coverage for an Asian voyage, map your planned cruising area against the policy geographic limits before purchase. Sailing in an excluded area typically voids the policy entirely — not just for incidents in that area, but potentially for all coverage.
Wreck Removal Coverage — Essential for Asian Permits
Wreck removal coverage — the cost of removing a sunken or stranded vessel — is a standard hull & machinery extension that takes on special importance in Asian cruising. Indonesia's CAIT requires wreck removal coverage. The Maldives' cruise permit requires environmental damage and salvage coverage. Malaysia and Thailand's marina authorities increasingly require it.
Beyond the regulatory requirement, the practical rationale for wreck removal coverage is clear. In environmentally sensitive areas — coral reefs, UNESCO World Heritage zones, national marine parks — authorities may issue mandatory removal orders for stranded or sunken vessels. The cost of wreck removal can be substantial: mobilising a salvage vessel to a remote Indonesian anchorage could cost USD 100,000–300,000 or more before any actual removal work begins.
Standard hull & machinery policies often include wreck removal up to the hull value or a fixed sublimit. For Asian cruising specifically, confirm that: - Wreck removal is explicitly included in your policy - The geographic coverage extends to your planned cruising area - The sublimit is adequate for a worst-case scenario in your navigation area - The policy documentation is in a form acceptable to Indonesian and Maldivian permit authorities
Frequently Asked Questions
What is an agreed value policy and why does it matter?
An agreed value policy pays the full insured amount in a total loss, without depreciation. A market value policy pays what the vessel is worth at the time of loss — which may be less than you've insured it for. Agreed value is strongly preferred for serious yacht insurance.
Do I need wreck removal coverage for Asian permits?
Yes — Indonesia's CAIT (Vessel Declaration) and the Maldives' cruising permit both explicitly require proof of wreck removal coverage. We recommend it for all Asian sailing regardless of specific permit requirements.
How much hull insurance do I need?
Insure to the full replacement value of your vessel — not its depreciated book value. Include the cost of any upgrades and refit work. Underinsurance can result in proportional claims payments even for partial losses under some policies.
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Including Hull & Machinery Insurance