And The Boat Survey Says ...

By Charles Fort

A marine survey can offer a wealth of information about your boat — if you know how to read it.

Photo of a boat inspection by a marine surveyorA survey is a critical tool for buyers and will tell you the condition and value of a boat before you buy. (Photo: Frank Lanier)

At some point in the process of buying or selling a boat, you're likely to come across a marine survey. If you're buying a boat, you'll probably hire a marine surveyor to get one. If you're selling a boat, you may see one the buyer has commissioned. This document, which can be a couple of dozen pages long, is a snapshot of the condition and valuation of a boat on a specific day. Think of it this way: Buyers and sellers can speak for themselves, but an independent marine survey speaks for the boat. Because of its depth of information, it has several uses: It's designed to give a potential buyer a clear picture of the condition of the boat with respect to U.S. Coast Guard regulations and nationally recognized standards, to provide a fair market value for the boat, and to document any potentially dangerous deficiencies in the boat's systems.

A marine survey is also a useful tool for buyers when negotiating price based on what repairs or upgrades the boat needs. And finally, insurance and lending companies that need to know the true condition and fair market value of a vessel often require it. Insurance company underwriters carefully read through a marine survey to make a determination as to whether the vessel is a good risk, and may require an owner to address certain deficiencies. To drill down through a marine survey to find out what you need to know, read on.

The Basics

Not all surveys are the same, but they generally begin by describing the boat overall. This part of the survey lists the year, make, model, hull identification number (HIN), and the basic specs of the boat, such as length, beam, and weight. It should also explain the scope of the survey, which describes the limitations. For example, it may say that hard-to-access areas were not inspected, that electronics were only powered up and not tested, or that engines were not part of the survey. From there, the survey goes into meatier stuff. It will document the condition of structural components, such as hull and deck, running gear, bulkheads, and engine beds. Things like the fuel, plumbing, and electrical systems are inspected and discussed with respect to relevant standards; living spaces are inspected; and safety items are noted, such as the existence — or the lack — of carbon-monoxide alarms and fire extinguishers. A good survey is more than just an inventory of the boat's equipment. The surveyor will comment on each section of the inspected boat. Finally, near the end of the survey are the recommendations, arguably the most important part.

The Recommendations

Recommendations are just that — issues the surveyor found on the boat that may need to be addressed. It's the "may" part that's important here. Typically, a surveyor will list recommendations in order of importance, often as A, B, or C. A-list recommendations (more properly called must-dos) are the most important ones to pay attention to, and you can be sure your insurance company will — not just for your boat, but for the safety of you and your crew. These are issues that, unaddressed, can cause your boat to sink, burn, become involved in an accident, or cause serious injury. Even if you're not financing or insuring a boat, these recommendations need to be addressed before the boat is used.

A-List Examples:

  • Worn or damaged below-waterline hoses, seacocks, and thru-hull fittings that pose a sinking hazard
  • AC or DC wiring deficiencies that could cause a fire
  • Lack of or nonfunctioning USCG-required equipment, such as fire extinguishers, flares, or navigation lights
  • Propane system deficiencies that could cause an explosion
  • A vessel with too much horsepower that could make it unstable
  • Lack of operable carbon-monoxide alarms
  • Unsecured batteries or fuel tanks that could break loose and damage the hull, or cause a fire
  • Missing oil-spill and waste-management placards. These are required by law and will be checked during a USCG inspection.

B-List Recommendations:

Tend to include either (1) items that are not an immediate risk but will pose an unacceptable hazard if left uncorrected for too long; or (2) things that may enhance the safety, value, and enjoyment of your boat. Some of these may cross over into A-list recommendations as far as underwriters are concerned, and may also need to be addressed before your boat can be insured. For the most part, they're things you'll want to do, anyway. Here are some examples:

  • Hoses and wires that are chafing or not installed to ABYC standards
  • Worn cutlass or rudder bearings
  • Stiff or corroded steering or control cables
  • Engine maintenance needed to forestall a larger problem
  • Cleats or stanchions that need to be re-bedded to prevent deck-core rot
  • Heavy corrosion on fuel or water tanks

C-List Recommendations:

Generally normal upkeep items that should be addressed as you can. Examples include:

  • Water leaks through ports or hatches
  • Anodes in need of replacement
  • Loose or worn engine belts, hoses, and engine mounts
  • Cosmetic issues
  • Winches in need of service

Keep in mind that while surveyors inspect a boat with an eye toward industry safety standards, such as those written by the American Boat and Yacht Council (ABYC), they recognize that newer standards were not in place when older boats were built. But some of those standards, like the need for carbon monoxide alarms or proper wiring, are critical enough that insurance underwriters may still require boats to comply with them.

All of the recommendations can be used as negotiation points for buyers. Any purchase contract should specify that a sale may be voided if the survey results are unacceptable to the buyer. In some cases, a seller may choose to do the required repairs before a sale, but make sure the boat is reinspected before the sale is finalized. Typically, surveyors will reinspect specific items for a fee, once the sale is made, and sign off that they have been properly done. If, after the sale, the buyer choses to make the repairs, insurance coverage can begin immediately, while the repairs are in progress. But, either way, the insurance company will usually require a written statement from the owner, or yard bills, to confirm the recommendations have been completed correctly. 

— Published: December 2014


Seven Tips To Get More From A
Marine Survey

Survey illustration

1. If buying a boat, don't rely on an old survey that may not give a current representation of the boat. Insurance underwriters will normally not accept a survey older than six months.

2. Attend the survey and take the opportunity to ask questions and learn more about your new boat. Most surveyors are happy to talk about what they're finding and what needs to be done to correct any problems.

3. Don't select a surveyor on price alone; find one that has experience on your type of boat and one with whom you feel comfortable.

4. Boats don't pass or fail a survey. The buyer determines if the boat is acceptable or not, and the insurance company will list what must be done in order to provide coverage.

5. Even a brand-new boat will almost certainly have some recommendations from the surveyor, though most of them should be addressable through the builder's warranty.

6. Surveys include an approximate current fair-market value for use by lenders and insurance companies. This can serve as a price negotiation tool.

7. A survey is a useful guide for planning upgrades and repairs and allows you to prioritize your budget.

 

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