Charter Yacht Insurance: What's Covered, What's Not

You've compared yachts, picked a route, and started packing your soft bags. Then you reach the insurance section of your charter contract. The jargon is thick, the stakes feel real, and nobody wants to spend a week at sea worrying about a €3,000 deposit vanishing over a scuff on the hull.

This guide breaks down exactly what's included in your charter price, what costs extra, and where the gaps are that could leave you out of pocket. Every figure below reflects standard 2025–2026 rates from major Mediterranean and Caribbean charter companies.

What's Already Included in Your Charter Price

Every reputable charter company includes basic insurance as part of the weekly hire. You don't need to arrange or pay for this separately. It's baked into the charter fee you pay at booking. Here's what that typically covers:

• Hull insurance , covers physical damage to the yacht's structure, deck hardware, and fixed equipment. The charter company holds this policy, not you.
• Third-party liability , protects against claims if the yacht damages another vessel, a marina pontoon, or injures a third party. Standard coverage ranges from €1M to €3M depending on the company and the yacht's value.
• Machinery breakdown , engine failure, generator problems, and electrical faults that aren't caused by operator error.

In practice, this means: if a catastrophic event sinks the yacht or a mechanical failure ends your trip, the charter company's insurer handles it. You're not on the hook for a €200,000 hull replacement. But the policy has a deductible. That deductible is your security deposit.

The Security Deposit Explained

The security deposit is the maximum amount you can lose on a charter. Think of it as the insurance excess (or "deductible" in American English): the portion of any damage claim that falls on you before the company's insurance pays out.

How much will you pay?

The deposit is taken as a credit card pre-authorisation or a cash/card charge at the charter handover. Return the yacht undamaged and you get it back in full. Card refunds typically take 7–14 business days; pre-authorisations release immediately.

When do they keep it?

The charter company can retain part or all of your deposit for:

• Gelcoat scratches, gouges, or cracks on the hull
• Damage to the keel, rudder, or propeller (usually from grounding)
• Broken or missing deck hardware: winch handles, boat hooks, fenders
• Stained or torn upholstery, broken interior fittings
• Damage to the dinghy or outboard motor
• Late return penalties (typically €100–500 per hour beyond the agreed time)

One point that often surprises first-time charterers: the deposit is not a damage estimate. If you cause €800 of gelcoat damage on a yacht with a €2,500 deposit, the company deducts €800 and returns €1,700. They only keep the full amount when damage meets or exceeds the deposit ceiling.

CDW: Collision Damage Waiver , Is It Worth It?

A Collision Damage Waiver (CDW) is an optional add-on that reduces or eliminates your security deposit liability. It's the most debated line item in charter costs. Look at the numbers.

What CDW costs

Some companies offer two tiers: a standard CDW that reduces the deposit by 50–75%, and a "full" or "premium" CDW that takes it to zero. Read the fine print carefully. A "50% reduction" CDW on a €3,000 deposit still leaves you exposed to €1,500.

The honest maths

For a one-week monohull charter, CDW costs roughly €200. Without it, you're exposed to €2,500. CDW is essentially an insurance premium of 8% against a known risk. Worth it? That depends on your sailing experience, your destination, and your appetite for risk.

If you're a first-time bareboat skipper heading into a busy Croatian port in August, CDW is almost certainly worth the money. If you're an experienced sailor on a light-wind Ionian cruise with a hired skipper, the risk profile is lower. Even so, €200 for a week of zero deposit anxiety is cheap relative to a €2,500 exposure.

What CDW Does NOT Cover

This is where most charter disputes happen. CDW is not a blank cheque. Every major charter company excludes certain scenarios, and they're consistent enough to list clearly.

Standard CDW exclusions

• Sails and rigging , torn sails, snapped halyards, and bent spreaders are almost never covered by CDW. Sail repair costs €200–800 depending on severity; a replacement genoa on a 40-footer runs €2,000–4,000.
• Navigational errors leading to grounding , if you run aground in a charted shallow area, some companies will argue negligence and void the CDW.
• Sailing outside the permitted cruising area , your contract specifies boundaries. Cross them and all insurance, not just CDW, may be void.
• Operating under the influence , most contracts set a blood alcohol limit of 0.05% for the skipper.
• Interior damage from negligence , cigarette burns, red wine on upholstery, broken toilet pumps from flushing foreign objects.
• Loss of personal belongings , your phone, camera, and laptop are never covered by charter insurance or CDW.
• Water sports equipment damage , paddleboards, kayaks, and snorkelling gear rented as extras typically carry their own separate deposit.

Read your specific charter contract. Some companies, particularly smaller Greek and Turkish operators, include sails in their CDW. Others, like the large fleet operators (Sunsail, Dream Yacht Charter, Navigare), explicitly exclude them. Ask before you sign.

Personal Travel Insurance: The Gap You Must Fill

Charter insurance protects the yacht. CDW protects your deposit. Neither protects you. Personal travel insurance is a separate purchase, and skipping it is a genuine gamble.

What personal travel insurance should cover

• Medical evacuation , a helicopter medevac from a Greek island to Athens costs €8,000–15,000. Standard European Health Insurance Cards (EHIC) don't cover evacuation.
• Trip cancellation , charter deposits are rarely refundable within 30 days of departure. A 40-foot monohull in Croatia costs roughly €3,000–5,000 per week. That's a lot to absorb.
• Personal belongings , phones, cameras, and electronics lost overboard or stolen in port.
• Personal liability , if you injure another crew member through negligence, the yacht's third-party insurance may not cover it because they're aboard the same vessel.

A good sailing-specific travel insurance policy costs €40–80 per person per week. Providers like Pantaenius, Topsail, and World Nomads offer policies that explicitly cover sailing activities. Standard travel insurance from a high-street provider often excludes "crewing a vessel." Check the wording carefully before you buy.

6 Tips to Protect Your Security Deposit

These steps reduce the chance of losing money at check-out, regardless of whether you buy CDW.

1. Document everything at handover

Use the charter handover checklist and photograph every scratch, scuff, and dent before you leave the marina. Take 50 or more photos with timestamps. If damage already exists and isn't on the inventory sheet, insist it's added. This takes 30–45 minutes and can save thousands.

2. Learn to Med moor before you arrive

Stern-to docking causes more deposit claims than any other single manoeuvre. Practice in open water on day one, assign clear crew roles, and always use fenders: at least four on the stern and two amidships.

3. Check the anchor and chain

Before your first anchoring, run out 10 metres of chain and inspect it for weak links. Test the windlass. If anything looks worn, report it immediately. Anchor and chain loss can cost €500–1,500, and it's much harder to dispute if you didn't flag the condition at handover.

4. Watch the depth sounder religiously

Grounding damage is the single most expensive deposit claim. Set your depth alarm to 2 metres below your keel depth. In areas with poor chart data , Turkey's south coast and parts of the Adriatic , add an extra 0.5m buffer.

5. Protect the dinghy

The tender and its outboard motor account for roughly 20% of deposit deductions. Always lock the outboard's tilt pin, lift the engine clear of the water when towing, and never drag the dinghy over rocks or sand. Replacement outboards cost €1,000–2,500.

6. Report damage immediately

If something breaks or you hit something, call the charter base within one hour. Most contracts require prompt notification. Late reporting can void your CDW and may be treated as an attempt to conceal damage, which shifts the burden of proof entirely onto you.

The Bottom Line

Getting your charter insurance right takes about 15 minutes. Getting it wrong can cost you €1,500–5,000. Read your contract before you sign, buy CDW unless you have solid reasons not to, get personal travel insurance for every crew member, and document the yacht thoroughly at handover. Do those four things and you'll spend the week thinking about wind angles and anchorages.