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Hull Insurance

Marine insurance covering physical damage to or total loss of the vessel itself.

Hull insurance covers physical damage to, or total loss of, the vessel. In marine insurance vocabulary, "hull" includes the hull structure, propulsion machinery, masts, sails, tackle, and permanently attached equipment. It does not cover liability to third parties or passengers — that's the role of P&I.

Hull policies are written either on an "agreed value" basis (the insurer pays a pre-agreed amount in the event of a total loss) or on an "actual cash value" basis (the insurer pays depreciated replacement value at time of loss). Agreed value is strongly preferred for charter vessels because depreciation schedules can otherwise produce an unpleasant surprise after a total loss.

For charter use, hull policies typically include deductibles of 1-2% of hull value and often exclude specific risks (named storms in South Florida, for example) unless explicitly insured.

Examples

  • A $500,000 yacht with agreed-value hull insurance receives the full $500,000 in the event of a total loss.
  • Named-storm damage is often excluded unless a separate hurricane endorsement is purchased.

Related Terms

Charter Insurance—Commercial marine insurance covering a charter vessel, its passengers, crew, and third-party liabilities during paid trips.Liability Insurance—Marine insurance covering legal liability to third parties for bodily injury, property damage, or environmental harm.P&I Insurance—Protection & Indemnity insurance covering third-party liabilities arising from vessel operations.Marine Survey—A professional inspection of a vessel's hull, systems, and equipment performed by a qualified marine surveyor.

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