Sooner or later, if you continue to mess about in boats, you will need a marine surveyor.
When You Need A Marine Surveyor
Part I: The Occasion
by Norm Laskay
Go to part 2...
Insurance
You have bought a boat and want to insure it, or, a third party (bank, credit union) wants you to insure it. If it is small, recent vintage or inexpensive, the insurance company may just value it based on the information in their in house library consisting of the BUC Book , NADA, or other manufacturer/brokerage publications. If it is large, old or expensive, they will weigh the cost and chances of a loss against the cost and irritation of the insured having to get a survey. They pretty much know the value of most production pleasure craft but they don't know the condition of an older vessel or some used vessels with known structural weak spots. Therefore, they will want a professional to be their eyes and to assess the risk in the form of a Condition & Valuation Survey (C&V).
Frequently, the insurance company will have a list of approved marine surveyors for your area and will allow you to contact and use the one of your choice. This will be covered in the second half of this article.
For an insurance survey, and for all of the others, try to schedule the survey so that you can attend. Your input of history or details can be very useful to the surveyor and his comments and observations can be very educational to you. Also, the surveyor should be interested in assessing your competence and you should be interested in assessing the surveyors competence as you may need a good surveyors assistance in the future.
For a C&V or for a Fair Market Value (FMV) appraisal, try to get to the boat early and have it opened up and gear spread out (within reason). This gives the surveyor access to the inside of cockpit or cabin lockers, the wonders of the Vee berth, and a clear view of safety equipment. Also, for sailboats, the surveyor should want to examine the main and headsail and to pull the other sails from their sail bags to examine all of them for condition. If hauled out, boatyard or trailer, make sure there is a safe ladder for access. Depending on the circumstances and the surveyor, there may be Non Destructive Testing (NDT) of the hull, operation of the electronics and machinery, and possibly a sea trial.
While keeping one eye on the vessel for condition, and how it will apply to value, the main thrust of a C&V is condition and outfitting and how they may apply to risk. The surveyor should be looking at the details of rigging, of piping and thru-hulls, of the entire electrical system, the fuel system and the safety equipment. The main guidelines for the vessel and its systems are considered to be those published by the American Boat & Yacht Council (ABYC). (The ABYC is a board made up of marine manufacturers, surveyors, insurers, and selected technical experts that was put together to self regulate and safely standardize pleasure vessel design and construction). The surveyor may also use personal and/or insurance company guidelines in assessing condition.
After completing a C&V survey the surveyor should provide you with a list of recommendations that will be forwarded to the insurance company. These recommendations are items, that in the opinion of the surveyor, need to be complied with inorder for the vessel to be safely operated. They may be prioritized, such as, do now, complete within xx days, do prior to departure for xxx, or, do at time of next scheduled haul out. If the vessel is generally suitable for your intended use and doesn't have serious problems, an insurance company will usually put this information in your file and assume that you have complied with the recommendations. It's the honor system. They could ask you to pay for the surveyor to come back and confirm compliance. Your impetus to comply is that if you have a casualty, and there is any connection between the casualty and an uncompleted recommendation (and sometime even if there is no connection), the insurance company may deny coverage.
Financing
A FMV survey for financing is very similar to a C&V. The financial group may have an approved list of surveyors from which you may choose and the survey is often conducted in the same fashion and in the same detail as a C&V. The difference is that no recommendations will be issued. There is a slight difference to the end user. The insurance company's' main interest is risk and insurability followed by, depending on how your policy is written, its Replacement Value or its FMV. The financial group wants to know FMV, and possibly, Orderly Liquidation Value (OLV) or Forced Sale (liquidation/auction) Value. In a FMV the surveyor may be as much interested in cosmetics and owners fine touches as safety features, as the former affects marketability as much (and sometimes more) than the latter.
Two important points. First, if you pay for the survey it is yours and no one should use or reuse it without your permission. You are providing a copy (or the original if requested) of your survey to the insurance or financial company at their request. Second, you may request one survey and use the same survey for multiple purposes. It is usually best to request a C&V from the surveyor so that the additional "Recommendations" are included should you also need a survey for insurance. However, there are two things to watch out for. The bank and the insurance company may not both have the surveyor you used on their approved list. With older vessels in the trailer boat size, where value is not attention getting, a bank may accept the insurance surveyors values while an insurance company is generally more picky about whose survey they accept. And, if you should have a long list of recommendations in your survey, you may not want it seen by the bank. If the surveyor is agreeable, this may be handled with recommendations put in a separate report addendum and the main survey report left "clean".
Casualties
Yes, it can happen to you. It can be a marina fire, a road accident while on the trailer, an "oops" rounding the buoys, or a PWC attack. If we assume that nothing is life threatening, there are no personal injuries, there is no pollution, and you are back at the house or dock, you can call your insurance agent. Under more chilling circumstances, after personnel and property are safe and stabilized and regulatory bodies have completed their duties, then you can call your insurance agent. Depending on the facts of the loss, a central office will advise you to get repair estimates, similar to an automobile loss, or a surveyor may be assigned to the case. The surveyor will be representing the insurance company's' interest which may also be your interest. However, the facts of the case may be such that you feel that you may want your own representation. Check with your agent. They are collecting a piece of your premium so let them do some work for it. Your policy may give you the right to have your own surveyor that will be paid for by your insurance company with the surveyors fees being part of your claim, subject to your deductible. Of course, you must have a valid claim before the insurance company pays anything.
The insurance surveyor will work with you or your surveyor to set up a survey of the damaged vessel, at a place and time where the damage can best be assessed. It may be at a boatyard or repair shop where the repair people will have already removed cabinets, panels or opened up an outboard or lower drive to facilitate the survey. Try to attend if you feel that your input will help clarify the cause and extent of damage. The surveyor or a separate adjuster may contact you before or after the survey to take a taped statement concerning the loss.
If the seriousness of the casualty warrants and/or if there is a second (or third, etc.) boat or party involved, the survey should be a joint survey attended by surveyors representing all interested parties. It should be set up by the lead surveyor which is the surveyor representing you, if one is engaged, or the surveyor representing your insurance company. Working with you, he (she) should delineate the extent of the damage and the steps necessary to repair it. This should be put in writing in the form of a Field Survey, usually traditionally formatted with a left side column that contains the numbered findings (Found) and a right side column with a matching number opposite that contains the repair specifications (Recommended). The other attending surveyors should then sign the Field Survey in agreement or sign it noting their exceptions to the contents. If another vessel was damaged, the same scenario would go on at that joint survey with your surveyor agreeing to or taking exception to that damage. The great advantage of the joint survey is that basic disagreements on damage and repair specifications, if any, surface at the beginning and may be solved by agreement or compromise then and not in court three years later. Even in a single boat claim, you may ask the surveyor to prepare a field survey for your information. By having a written damage report in front of you there is no misunderstanding of something said on the day of the survey and it may be valuable if the insurance company denies some part of the claim that you feel was covered by the Field Survey. Even if something is included in the Field Survey, the insurance company has the right to interpret a policy and how it bears on the survey contents.
The actual repair work and payment is usually handled similar to car repair claims with the insurance surveyor advising the insurance company on a fair settlement. Insurance companies take the advice and then act as they see fit, usually in the form of the recommended amount with adjustments for deductibles. But, sometimes for legal, political, financial, or internal reasons a claim may be denied or a deniable claim paid. In this last respect, marine insurance is like all other insurance.
Pre-Purchase
With larger vessels with complicated systems, or older vessels, a dedicated pre-purchase survey performed by a surveyor experienced with that type vessel is highly recommended. For most people in the 24 foot and under class of sailboats and about the same size in power boats, you will probably do your basic screening by yourself, and, when you think you have found the right boat, call in a surveyor for a C&V survey which you can also use for financing and which will give you the information you will need for a "buy-don't buy" decision.
Unless the boat is small or new, think strongly about getting a survey, even if you may not need it for insurance or financing. Do a mini cost/benefit study. A survey will cost me $xyz. What will it cost me if I miss electrical problems? Historic delamination problems in this model boat that I'm not aware of? Rigging problems? What is my peace of mind worth?
Conversion
This is another "big" boat use of a surveyor. Someone to oversee bid specifications, bidding, boatyard work, cost and quality control, etc. But, if you are lucky enough to have an experienced surveyor around who is well versed in your type of boat, it may be money well spent to rent that experience before you go into any extensive movement of rigging, tankage, re-powering or sail arrangement. The surveyor may have seen it done before and that knowledge can be invaluable. And, at the small boat level, the only fee requested could be a shared beverage at sunset.
This leads into part two. How do you find the ideal surveyor?
Go to part 2...
by Norm Laskay
nlaskay@portlite.com
| 
Trailer Sailor Feature Articles
