Anyone who has booked a Benetti yacht charter or a Feadship yacht charter vacation knows that charter agents heavily promote trip cancellation insurance. For mega yacht charter agents, trip cancellation insurance is a substantial profit point. Commissions of 20% of the insurance cost for selling this product for a Feadship yacht charter or a Benetti yacht charter are common.
Charter brokers often offer this coverage to their Caribbean yacht charter customers who fear trip delays due to summer tropical weather disturbances. Mediterranean yacht charter customers also hear the pitch to purchase this coverage, as concerns for lost baggage are common with long, international flights.
Putting aside the fact that someone “profits” from the sale of these policies, a luxury yacht charter customer should give serious consideration to this coverage option. Whether you rent a private yacht, a megayacht, or a superyacht, for a Caribbean yacht charter or elsewhere, or whether you plan crewed catamaran charters or sail boat charters – the facts remain the same: you are spending a lot of money and you may wish to protect your investment!
There are hundreds of circumstances that could cause you to cancel your trip, return home early, or force you to seek emergency medical treatment while traveling. What if you booked a MIPIM yacht or a Monaco Grand Prix yacht for the yearly event in Cannes and Monte Carlo, and suddenly you could not attend?
To demonstrate the importance of purchasing travel insurance, and emergency travel services, here are 10 common examples of what could go wrong.
7. BANKRUPTCY OF TOUR OPERATOR — Your luxury sailing charter tour operator goes bankrupt. Who will pay for your non-refundable expenses? Who will help get you to your destination?
8. MEDICAL HELP NEEDED — You’re walking down a street in Rio and twist your ankle. Who can help you find an English-speaking physician?
This entry was posted in News Special Events Frequently Asked Questions and tagged Monaco Grand Prix, Feadship yacht charter, caribbean yacht charter, Benetti, yacht charter Mediterranean, Cannes yacht charter, private luxury yacht charter, travel insurance, MIPIM, Frequently Asked Questions, trip cancellation insurance, Feadship, lost luggage, Mediterranean yacht charter
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“When these difficult times return to normal, our family is interested in booking a yacht charter for late summer in Greece.
We’re worried if unforeseen coronna (sp) virus issues could arise we might be forced to cancel, and we don’t want to lose our deposits.
Is there anything we can do to protect ourselves?”
-Vanessa A, East Fallowfield, PA
“Hi, Vanessa. The short and simple answer is:
‘YES. There are things 1-800 Yacht Charters can do to protect you should you need to cancel your charter due to Covid-19 issues.’
There are insurance products available for trip cancellations, but they are not uniform in their coverage options. I have developed and implemented a 2-part strategy to protect our clients.
1. FREE Cancellation Policy (penalty-free Covid-19 refund policy)
2. Modified Charter Contracts with a Covid-19 protection addendum
You can stop reading here, and know we’ve got your back. Please read on, if you want a more in-depth explanation…”
–Jana L Sheeder, President, 1-800 Yacht Charters
As a general rule, yacht charter contracts are written to protect the yacht owner and his/her asset (the yacht). This is in the event of damages or cancellations. The rationale is simple. Specifically, the client may be paying thousands of dollars to enjoy a vacation on a yacht. However, the owner’s exposure is far greater. Moreover, many yachts are worth millions of dollars. Owners wisely use a well-crafted, legal charter agreement to protect themselves.
One example of how owners protect themselves is known as the “Force majeure provision.” This clause is inserted into most luxury yacht charter agreements. It gives the owner the right to cancel a charter due to “Acts of God.” These are acts/events that prohibit the yacht and crew from proceeding with the charter.
Understanding Force Majeure in Yacht Charter Agreements
This relates to the Covid-19 virus situation. Under the force majeure provision, a yacht owner has to return the charter money to the customer. This is if the yacht cannot perform due to marina closures, virus-infected crew members etc. That’s good news for the charter customer. However…
IF the charterer is the one who cancels, things work differently. Even due to Covid-19 issues (for instance, due to a quarantine or flight cancellation), the Owner has the right to claim ALL of the installments paid and due from the Charterer. In other words, the Charterer forfeits any and all monies paid to date for the charter! The owner is not obligated to reschedule or to give the funds back.
We believe that the force majure provision is the main reason potential charterers withdrew their inquiries for spring and early summer. Some clients willingly canceled their trips. They know they would lose their initial deposits. They wanted to stop the bleeding now. Stop it before second and third deposits were due as the charter dates draw closer.
1-800 Yacht Charters now offers a penalty-free Covid-19 refund policy* on a large selection of luxury charter yachts. To insure the yacht owners comply, we prepare an addendum to the standard charter agreement. This addendum clearly states the owner of the yacht agrees to a full refund. This is if the charterer is forced to cancel due to Covid-19 issues.
Now charterers can protect their deposits in 2 ways. They can either reschedule their trip(s) to a future date or receive a complete refund.
Would you like to review the Covid-19 charter addendum? Send an email request to info@1800yachtcharters.com today. Please include your full name and phone number in your email. In conclusion, we have your back. Our team at 1-800 Yacht Charters values your business and vacations. We protect you.
*This new policy does not apply to all yachts. It also may depend upon the charter destination and charter dates. Certain restrictions apply. Please check with your yacht charter consultant before proceeding with your reservation. More importantly, clarify this before making any deposits or payments.
This entry was posted in News Educational and tagged contract clauses, trip cancellation insurance, What if I cancel my yacht charter?, luxury yacht charter agreements, Jana L. Sheeder, 1-800 Yacht Charters opinion, owners rights, Covid-19, How does Force Majeure Provision work?, client rights, yacht charter client rights, yacht charter owner rights, Acts of God, strategy, client protection, yacht charter refunds, contract addendum, trip cancellation, Force Majeure, president of 1-800 Yacht Charters, how am i protected for yacht charter booking?
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Should you purchase travel insurance to protect the money you have spent on a luxury yacht charter? The answer seems to vary, depending upon who you ask. Many travel agents and consumer advocates advise travelers to buy it, while many others say to skip it.
Adding to the dilemma is the difficulty for consumers to understand the components of the insurance.
Typically, there are three components of most travel protection plans – trip cancellation/interruption, personal effects coverage, and emergency medical insurance. Let’s review each of these.
1. Cancellation Insurance – Coverage can cost anywhere from 5 to 8% of the total cost of travel. For example, travel insurance for a $10,000 Virgin Islands yacht charter vacation would cost between $500 and $800. Before purchasing this insurance, consider the fact you might already be covered under insurance you already have.
If you paid for your trip with a credit card, look into the trip cancellation benefits provided by your credit card company. Many card companies include some coverage.
2. Personal Effects – The protection for personal effects offered in travel insurance plans may also be redundant. Your homeowner’s plan may cover the loss of personal effects when traveling. (REMEMBER – you are probably responsible to pay any loss amount up to the deductible).
What about lost luggage? Again, you may already be covered, as most airlines reimburse up to $3,300 for lost bags on domestic travel and $1500 for international travel.
If your purchased your flights with a credit card, some credit cards provide lost baggage coverage as well as protection for car rental losses.
3. Emergency Medical – This gets tricky. It is advisable to consider additional travel medical insurance to cover medical emergencies, particularly IF you plan to participate in higher risk activities such as water skiing, scuba diving, and riding personal watercraft, such as waverunners, when traveling abroad.
Let’s say you are on a crewed catamaran charter in the Caribbean. If you need emergency medivac and treatment, these costs may not be covered by your existing medical insurance.
Jana Sheeder, a yacht charter industry maven and President of 1-800 Yacht Charters and SailAway Yacht Charter Consultants, encourages travelers to check with their existing health insurance provider to determine what is covered when they travel. It takes only a few minutes to contact them, and it could potentially save you thousands of dollars (and headache). Says Sheeder, “
If your plan does not offer coverage when you are abroad, give serious consideration to purchasing additional medical coverage.”
For more information, visit the website InsureMyTrip. They represent over 20 insurers with various plans and prices.
So what’s the bottom line? The financial loss incurred by a cancelled charter is a risk many people can accept, so trip cancellation insurance probably IS NOT necessary; however, the consideration of medical coverage requires more thought and research. Major items not covered in your family’s medical plan may necessitate the purchase of travel medical insurance.
This entry was posted in Frequently Asked Questions Educational and tagged trip cancellation insurance, lost luggage, Medivac, additional medical insurance for yacht charter, SailAway Yacht Charter Consultants, should i buy insurance for my yacht charter, insure my trip, emergency medical insurance, Jana Sheeder, virgin islands yacht charter, president of 1-800 Yacht Charters, catamaran yacht charter
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