Every charter yacht is insured, but not by you. The charter company's insurance policy covers the hull, the rig, and third-party liability. Your exposure as the charterer is limited to the excess — the deductible amount below which the insurance does not pay. That excess, secured by a deposit on your credit card, is the financial mechanism that connects you to the yacht's physical integrity for the duration of the charter. Understanding how this works — what the deposit covers, what the damage waiver changes, and what falls outside both — is essential preparation that most charterers neglect until something goes wrong.
The security deposit: what it is and how it works
At the charter handover, the charter company places a hold on your credit card for the security deposit amount. This is not a charge — it is an authorisation hold that reserves the funds. If the yacht is returned undamaged, the hold is released, typically within 5-14 business days depending on your card issuer.
Standard deposit amounts vary by boat size and type:
| Yacht type | Typical deposit |
|---|---|
| Monohull 32-38ft | EUR 1,500-2,500 |
| Monohull 40-50ft | EUR 2,500-3,500 |
| Catamaran 38-42ft | EUR 3,000-4,000 |
| Catamaran 45-55ft | EUR 4,000-5,000 |
These amounts represent the insurance excess — the maximum you can be charged for damage occurring during the charter. If the repair cost is less than the excess, you pay the repair cost. If it exceeds the excess, you pay the excess and the insurance covers the rest.
What the deposit covers: Damage to the hull, keel, rudder, rigging, sails, engine, and onboard equipment caused by incidents during the charter — groundings, collisions, equipment failures due to misuse, lost or damaged inventory items.
What the deposit does not cover: Deliberate damage, damage caused while sailing outside the permitted area, damage resulting from sailing in conditions prohibited by the charter agreement (e.g. night sailing if restricted), loss of personal belongings, and — critically — any costs that exceed the deposit amount if the charter company's insurance does not apply due to a breach of the charter terms.
The damage waiver: reducing your exposure
Most charter companies offer a damage waiver (also called a "deposit reduction", "excess reduction", or "CDW — Collision Damage Waiver"). This is an optional payment, typically EUR 150-350 per charter, that reduces or eliminates the excess.
Full waiver: Reduces the excess to zero. If you damage the boat, the charter company's insurance pays everything. No further charge to you.
Partial waiver: Reduces the excess to a lower amount, typically EUR 200-500. Cheaper to purchase but leaves some residual exposure.
The damage waiver is not insurance — it is a contractual agreement between you and the charter company. It typically has exclusions that mirror the deposit's exclusions: deliberate damage, breach of charter terms, loss of dinghy or outboard, and sometimes damage to sails and rigging above a certain age.
Should you buy it? For most charterers, yes. The cost is modest relative to the potential exposure, and the peace of mind is substantial. A grounding on a Mediterranean reef can easily generate a repair bill of EUR 3,000-5,000 for hull and keel damage, plus haul-out costs. The waiver eliminates this risk for a fraction of the cost.
Third-party deposit insurance
An alternative to the charter company's damage waiver is third-party deposit insurance, purchased from a specialist marine insurer before the charter. These policies cost EUR 50-120 per charter and cover the full deposit amount.
Advantages: Typically cheaper than the charter company's waiver. May cover a broader range of scenarios. Transferable if you charter with multiple companies.
Disadvantages: Requires filing a claim after the charter if damage occurs — you pay the excess and then recover it from the insurer. This can take 4-8 weeks. The charter company's waiver, by contrast, means you simply do not pay.
Coverage details vary. Read the policy carefully. Some third-party policies exclude dinghy and outboard damage, which is among the most common claims. Some exclude damage to sails. Some have a waiting period or a per-incident deductible.
What actually happens when damage occurs
The process when damage is discovered — either during the charter or at the return inspection — follows a standard sequence:
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Document the damage immediately. Photograph from multiple angles. Note the circumstances: where it happened, what the conditions were, what actions led to the incident.
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Report to the charter company as soon as practicable. Most charter contracts require notification within 24 hours of any incident involving damage or grounding.
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The return inspection is when most damage claims are formally recorded. The charter company's technician inspects the boat against the handover inventory and condition report. Any new damage is noted and you are asked to sign an acknowledgement.
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The charge (if any) is applied to the credit card on which the deposit was held. The amount is the lesser of the repair cost and the deposit amount (or the reduced excess if you purchased a waiver).
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Disputing a charge is possible but difficult once you have signed the damage acknowledgement. If you believe the damage was pre-existing, the handover photographs become your evidence — which is why thorough documentation at the start of the charter is essential.
Common damage scenarios and their costs
To calibrate expectations, these are the most frequent damage claims on bareboat charters and their approximate cost:
- Dinghy and outboard loss or damage: EUR 500-2,000. The most common single claim. Lock the dinghy, check the painter knot, and never leave the outboard running unattended.
- Minor hull gelcoat damage (scrapes, scratches): EUR 200-800. Usually caused by contact with quay walls during mooring. Fenders are your friends.
- Keel grounding: EUR 1,000-5,000 depending on severity. Check chart depths, account for tidal range, and approach unfamiliar anchorages with caution.
- Rigging damage (torn sails, broken lines): EUR 300-2,000. Often caused by sudden wind gusts or delayed reefing. Reef early.
- Propeller fouling or damage: EUR 200-500. Usually caused by mooring lines or lobster pot buoys wrapping around the prop shaft.
- Windlass or anchor damage: EUR 300-1,500. Typically from dragging anchor on rocky bottom or overloading the windlass.
Travel insurance and personal liability
The charter company's insurance covers the yacht. It does not cover you. For personal protection, ensure your travel insurance includes:
- Medical cover for accidents aboard or at sea, including evacuation.
- Personal liability cover for damage you cause to other vessels or property (the charter company's third-party insurance covers the yacht, but not necessarily your personal actions ashore or in the dinghy).
- Trip cancellation cover that explicitly includes yacht charter cancellation. Standard policies may not recognise a charter booking as a covered expense.
- Activity cover for sailing. Some travel insurance policies classify sailing as an adventure sport and exclude it unless specifically added.
The financial architecture of a charter is designed to protect the charter company. Your job is to ensure it also protects you — through a combination of the damage waiver, adequate travel insurance, and thorough documentation at handover. The cost of this protection is modest. The cost of discovering you lack it is not.
