Why do I need/want a marine survey?

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You need/want a marine survey for two primary reasons:

1. You’re in contract to buy a boat, and you want a detailed inspection and analysis of the boat’s condition and market value so that you can make an informed buying decision.

2. You own a boat, and your insurance company or lender is requiring you to commission a survey for underwriting purposes.

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When buying a boat, always remember that your marine survey has two purposes: helping you determine whether you want to buy the boat and for you to provide to your insurer and lender which may require the survey to write your policy and loan. I highly recommend engaging an insurer and lender before the survey. Find an insurer and lender that want to cover the boat you’re buying and clarify whether they will require the survey. If the survey report is required by the insurer and/or lender, send them the survey report before you close on the boat; make sure the insurer and lender want to work with you before you own the boat!

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Do I need to haul the boat out?

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I highly recommend that we haul the boat out for pre-purchase inspections. Doing so allows us to inspect the very important, and often forgotten, hull and underwater machinery. You would not buy a car without seeing the tires; we don’t want to buy a boat before seeing the hull and running gear.

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A haul out for an underwriting (insurance/lending) survey is up to the underwriter. Be sure to ask your insurance company if a haul-out is required.

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Be sure to schedule the haul-out as soon as we have settled on a date for the inspection. We need to make sure the yard can accommodate our schedule. Appointments between noon and 2pm are generally best. When scheduling a haul-out, reach out to your favorite boatyard and schedule a ‘haul-out for the purpose of a survey’; nearly all boatyards will know what that means. We will want the yard to power wash the hull and underwater machinery. The yard will pick up the boat, power wash everything below the waterline, allow me time to inspect and then put the boat right back in the water. The whole process typically takes an hour and a half, depending on the yard and the size of the boat, and rarely exceeds two hours. Any boatyard fees are not included in my rate and are the responsibility of the party commissioning the survey.

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Hull and underwater machinery inspections while the boat sits on a trailer are better than no inspection at all but are not as good as having the boat hauled at a boatyard. The boat's trailer will restrict access to much of the hull; this is less of a problem at a boatyard. Also, the haul out inspection is nearly moot if the hull and underwater machinery are not clean. A boatyard can power wash the hull and running gear; other means of cleaning may be required if the boat is to be inspected while on a trailer. By 'clean' I mean that no growth nor grime stand between me and the boat's hull or bottom paint.

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Do I need a sea trial?

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I highly recommend a sea trial for pre-purchase inspections. We want to see the boat perform. We wouldn't buy a car without a test drive; we don't want to buy a boat without a sea trial. During the sea trial, we'll want to test the engine(s) under increasing RPMs working all the way up to wide-open-throttle (WOT), and confirm that WOT is approximately in-line with manufacturer specifications; this is a quick test of engine(s) health (also see a mechanical inspection below) and drivetrain configuration. We'll also want to test any other systems and equipment that can only be tested while underway, e.g. steering, an autopilot, etc. Sea trials typically take about an hour.

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Sea trials for underwriting inspections are rare, and only required if specified by the insurer or lender.

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If I've found a boat I'm interested in, should I pursue a purchase agreement?

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The short answer is Yes.

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If there is a broker involved in the transaction, this step should happen nearly by default. 

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In the private sale scenario, this step is often forgotten or overlooked. However, especially as the purchaser, the purchase agreement establishes a few important points: What exactly is being purchased and the terms of the deal. See an agreement template and more details Here.

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The more important details of the agreement, as they pertain to the survey, are the closing date and the contingencies.

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It would be a shame for you to make all the arrangements for a survey only to have the boat sell to another buyer before the inspection can be scheduled, let alone the survey report be produced. A properly executed purchase agreement should provide you with first right of refusal for a sufficient amount of time to allow for the survey inspection (and any other inspections) to be conducted and reports produced (and the survey report reviewed by your insurance company and/or bank, see the first question/answer). Remember, your surveyor is likely booked out two weeks or more!

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Additionally, the agreement should include provisions that make the deal contingent on acceptable survey, procurement of insurance and procurement of financing (if applicable). The first purpose of the survey is to provide you with deep insight into the vessel, allowing you to make an informed buying decision; the survey may reveal previously unknown concerns that may make the boat (or the price) unacceptable to you. If you're still satisfied with the boat and the price, if required by your insurer and/or lender, it is important to present the survey to those third parties and gain their approval before closing the deal. Again, allowing sufficient time in the agreement for this process is important!

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What else should I consider when commissioning a pre-purchase survey?

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A mechanical inspection and/or rigging inspection!

 

In terms of financial commitment, engines are very likely to be one of the largest components of the purchase price of a boat and ongoing maintenance. I highly recommend hiring a mechanic to inspect the engines, including transmissions and gensets, as a part of the pre-purchase inspection process.

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As a rule of thumb, any rigging should be inspected and/or replaced every ten years. The condition of the rigging is very important to you, and your insurance company, when buying a boat.

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As your marine surveyor, think of me as your general doctor, well versed in how boats are supposed to function as a whole. Think of professional marine mechanics and riggers as cardiologists and orthopedists, doctors who specialize in very specific, and very important, parts of the boat.

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What should I expect from my insurance company after I send them the survey report?

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I am an independent contractor who works for the person or entity commissioning a marine survey. I do not work for insurance companies unless contracted to do so (usually only for damage inspections). I do not regularly confer with insurance companies; not because I don’t want to but because there is no need to during my normal course of business. The following commentary is based solely on my experience with my clients and their relationships with their insurance companies.

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When I’m finished with a survey report, I send the report, via email, only to those parties named on the PreSurvey Agreement, typically the boat owner(s). I always strongly encourage clients to read the report, in detail, prior to sending the report anywhere. If there is anything in the report you wish to discuss, this is the best time to have that conversation.

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After the insurance company receives the survey report, their response typically falls into one of a handful of general categories:

• Thank you for the survey, here’s your policy.

• Thank you for the survey, here’s your policy, please fix the problems the surveyor found and send us proof of completion, (receipts, etc.) within the next 30 days.

• Thank you for the survey, please fix the problems the surveyor found and have the surveyor inspect and report on the work completed, we’ll review your application for insurance thereafter.

• Thank you for the survey, we are not interested in insuring this boat.

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This is why, when in contract to buy a boat, I strongly encourage you to engage an insurance company and provide them with the survey report, if they require, before closing on the boat. Further, this is why I also encourage you to read the survey report before providing it to your insurance company; the report is your boat condensed into 8.5” by 11”; we want to be sure you understand the report, the boat’s condition and the boat’s value before sending the report on.

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What happens after you hear from the insurance company? If they require you to fix the problems I’ve found with the boat, that is the next step. If they require that I reattend the boat after you’ve fixed any problems, I’m happy to do so (some fees may apply). After I’ve attended the boat the second time, I provide you with an updated report based on the fixes I’ve observed, and you provide that updated report to your insurance company.

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I cannot tell you what your insurance company’s response will be. I cannot tell you which problems they may require you to fix. In short, I cannot speak for your insurance company because I don’t know what their response will be. However, I’m more than happy to help you through the process as best I can. If you have questions or concerns about the report, I’m happy to talk through those with you. If there are items in the survey report that you’d like to fix and have me re-inspect prior to sending the report to your insurance company, I’m happy to do so (some fees may apply).