As June 1 approaches and the 2025 Atlantic hurricane season looms closer, it’s time to prepare once again for what is likely to be an active season.
While NOAA’s 2025 hurricane predictions are due in May, Colorado State University (CSU) predicts an above-average season with 17 named storms, nine hurricanes, and four major hurricanes. As the previous few years in South Florida, the Bahamas, and the Caribbean have demonstrated, major storms can cause catastrophic damage, so have your hurricane plan in place early and be ready to execute it.
As Laura Sherrod, director of Yacht Insurance at Newcoast Insurance Services, shares her tips for tackling the upcoming season, she emphasizes that windstorm coverage is vital for yachts but has become increasingly difficult to obtain.
“It continues to be difficult,” Sherrod said. “Although the two major storms last year, Helene and Milton, did not come to [South Florida’s] front door, they still affect the underwriters’ mentality when it comes to what could potentially happen.”
Although hurricane tracking has improved significantly and typically allows vessels time to avoid storms, a captain must create a hurricane plan and follow through on the plan agreed with their insurance company.
“Certain carriers require you to follow your hurricane plan to the letter. If you provide a hurricane plan to those carriers, and they agree to it, you must follow it,” Sherrod said. “That’s fairly stringent because the hurricane plan may mean that [the storm] is heading right there. In my opinion, that’s when you should allow the owner to make a prudent decision to leave.” If you ignore that agreed-upon hurricane plan, you’d better have an excellent reason for doing so.
Sherrod shares that a new type of windstorm insurance — parametric insurance — may benefit yachts.
Parametric insurance pays out based on windstorm speeds and exposure. As Sherrod explained, there is no deductible, and insurance automatically pays out if winds reach a certain speed in your area — it uses precise storm tracking technology to determine the payout, and proof of loss is not required. Even better, it can be purchased independently without needing an underlying windstorm policy. It can also help cover large windstorm deductibles.
“It’s something we’re beginning to offer to owners who have large windstorm deductibles. If you’ve got a million-dollar windstorm deductible on a boat and you can insure $200,000 or a million of it, then it might be a good way to eliminate some of your financial burden,” Sherrod said.
Note that, like all insurance, you cannot purchase parametric insurance once a storm has formed.
As June 1 draws closer, Sherrod offers three tips for captains to prepare for the season:
Read the insurance policy carefully and consult with your agent to ensure you’re fully compliant. Policies can be complicated, and you don’t want to assume you have coverage when you don’t.
Deal with the tender early — store it safely, well before any potential storm, to eliminate one source of worry.
Understand your insurance carrier’s specific requirements, especially for non-regulated surplus lines companies, and always get approval if you need to deviate from their prescribed hurricane plan.
