If you decide to buy a yacht, you will have a lot of things to think about. First of all you should pay serious attention to yacht finance and yacht insurance. There are many versions for financing a yacht. You can use service of different finance companies or some specialized agencies.
Yacht hypothec.
Financing the purchase of your yacht is performed through a yacht hypothec which is ensured on the yacht, or through an un-secured loan. The first involves a charge taken over the yacht, whereas the second does not involve that charge. If you select marine hypothec for financing the purchase, a charge is made on the boat, like a hypothec on your property. No security is used against your home as the hypothec is purely on your boat.
A marine loan is ideal, when you purchase smaller boats, refitting or extra equipment.
Yacht insurance.
Now let’s talk about yacht insurance. It’s often put aside because for boat buyers it’s just “one more thing to do” and it’s also an extra expense they don’t like to think about. Nevertheless a lot of yacht buyers get surprised by coming across with the fact that when they’re financing the purchase of the boat, they must also realize yacht insurance. Most yacht finance companies will insist you insure your yacht when purchasing it. Even if you don’t take delivery of your yacht until August you need to insure it as of June. So why do you have to realize yacht insurance when you’re financing and why so urgently? Let’s say the boat finance company borrows you $42,000 to purchase your yacht with the contract that you will monthly pay them back $430.The company keeps your yacht as security, or we can say, they have an “interest” in your boat and if you are not able to pay your monthly pay, they can repossess the yacht and sell it to take back the money they loaned you. That is why they want to make sure that the boat is insured or, if something bad happens, they will be paid back with insurance money . Actually, if the insurance company gives you money for the yacht, the insurance cheque would be liable for payment to both you and the boat finance company.
Insurance companies.
Finance companies will offer you a list of recommend insure companies, but you can use another insurer as long as the company is accepted by the finance company. When choosing insurer you should find out if it provides good ( or bad) service to its clients. An insurance company should clearly show their status on any documentation, including their web site.