Boat Warranty LimitsBy Charles Fort
Published: February/March 2013
Members send lots of queries to BoatUS Consumer Protection about the small print in boat warranties, everything from "Am I covered for this?" to "What on earth does this mean?"
It used to be that manufacturers seemed to consider new-boat warranties a necessary evil; the small print on the back of the sales brochures offered little and lasted for barely a year. But now manufacturers realize that warranties can differentiate their products from those of their competitors, and that buyers are paying attention.
Warranties have improved, with better coverage (some with bow to stern) and longer durations (up to lifetime on hulls), and most are now transferable. But warranty language is typically not user-friendly and exclusions often take up more space than coverages. The following are a few of the most common questions boat buyers have.
"I seem to have several different warranties. Why isn't there just one?" Usually a boatbuilder provides a warranty that promises their boat will be free of defects for a period of time, often a year or two. This warranty covers things such as steering systems, electrical and plumbing systems, and other items the manufacturer builds. Builders often provide separate warranties for hull integrity and hull blisters.
In addition, boatbuilders buy some components from third-party vendors, such as engines, air conditioning units, and electronics, which come with their own warranties. The boat's warranty typically covers them, but only up to the duration of the original boat warranty. After that, problems have to be taken up with the individual manufacturers. This brings up an important point. Warranties, whether for the entire boat or the VHF, are nearly always "limited," which means that it's up to you to return the boat, engine, or broken radio to the manufacturer for servicing.
"The engine on my new boat broke down and the boatbuilder won't cover the repairs. What should I do?" In most cases, the engine manufacturer, not the boatbuilder, provides engine warranties. Often, the dealer handles the warranty for both, which is why it's a good idea to buy from a dealer who's certified for engine warranties, too. Otherwise, you'll need to take the boat to a shop that's authorized.
"What do hull and blister warranties cover?" Each manufacturer has specific language, but typically a hull warranty covers structural defects in the hull. Sometimes builders try to limit what the "hull" actually encompasses, though it's usually defined as the fiberglass shell, including transom, stringers, and related structural reinforcements, which are below the hull-to-deck joint. That means the deck is usually not part of the warranty.
Manufacturers also limit what's considered a defect. For example, gelcoat cracking and crazing usually isn't covered even if the cause is a flexing hull. Hull blisters are caused by water slowly seeping into the gelcoat and hull laminate on boats kept in the water, and many warranties specifically exclude blisters. If blisters are covered, there are usually limitations. For example, Chaparral's warranty says that blisters in the laminate are only covered if they are larger than 1/8-inch in diameter and greater than 1/16-inch in depth. Blister coverage is often prorated, decreasing 25 percent per year. Some manufacturers require the owner to pay for a costly barrier coat to maintain coverage if the boat is left in the water. Sea Ray, on the other hand, prohibits anything other than antifouling paint to be applied in order to keep the hull and blister warranty in effect. Before applying any coating to your hull, check the specifics of your warranty.
"Is my warranty transferable?" Many manufacturers allow the remainder of their new boat warranty to be transferred -- a strong reselling point -- but only to the second owner. Hull warranties are usually transferable to the second owner as well, but beware that on both warranties, the clock starts ticking the day the boat is delivered to the first owner. Some manufacturers charge up to $1,000 to transfer a warranty.
Usually blister warranties aren't transferable. If the boat has a lifetime hull warranty, it usually won't transfer to the second owner. In any case, manufacturers have specific procedures that have to be followed to transfer a warranty, and failure to dot all the i's can cause grief for the second owner.
"Can I take my boat to a local shop for warranty work?" Usually not. Manufacturers have agreements with their dealers to pay them for hourly warranty work and parts. Dealers are factory-trained and theoretically know the ins and outs of manufacturers' boats best. Sometimes though, a dealer, especially a smaller one, can't take care of complex or difficult repairs, and the manufacturer will make arrangements for a non-dealer shop to do the work and pay them directly. But the manufacturer must authorize it before any work is started, or the owner will be responsible for the bill.
For major hull repairs, such as cracks or delamination, manufacturers will often want the boat returned to them. Be careful here. The Consumer Protection Bureau has received reports that some manufacturers aren't willing to pay for the transportation, or that they keep the boat for weeks. You may be able to negotiate the transportation costs. Be sure to get in writing what the repair entails and how long the factory plans to keep your boat. Note that warranties specifically exclude costs for loss of use, and you'll still have to pay loan payments and insurance if your boat is out of service. When buying a boat long-distance, try to arrange with the manufacturer to have the warranty work done by a dealer that's closer to home.
"What can void my warranty?" Taking a boat to a non-authorized dealer for warranty repairs will usually void the warranty and leave you on the hook for the bill, unless it's been approved ahead of time. However, normal maintenance performed by a non-dealer shop (or by you) won't void your warranty as long as the materials used (oils, lubes, and parts) are manufacturer-approved. If a dealer doesn't perform the maintenance, make sure you keep accurate records in case you need proof later.
Commercial use of a boat usually voids the manufacturer's warranty and using an LLC to buy a boat could be construed as commercial use. Some manufacturers, such as Nitro, state that if a boat is registered to a corporation, or multiple persons (not husband and wife), it's assumed to be used commercially and the warranty is void. Check with the manufacturer if you're not sure. Federal documentation of ownership is not considered commercial use. Racing, lack of proper maintenance, damage, abuse, installing too large an engine, and overloading the boat are all legitimate grounds for voiding a warranty.
Incidentally, manufacturers often demand that a new owner fill out a registration form within 15 days of purchase to validate the warranty. Federal law does not require doing this; however, it'll likely make the paperwork process easier when repairs are needed, and it also gives the manufacturer contact information in case of a recall.
"What isn't covered in my warranty?" Most companies don't cover rainwater leakage through biminis or even hatches and portlights. Window breakage, stress cracks, and bottom paint are usually excluded. Corrosion and deterioration of underwater metal are almost always excluded.
"My manufacturer was bought by another company. Will they honor my warranty?" Probably not. Often, when builders go out of business, the assets, but not the liabilities, of the company will be sold to a new corporation, even if the name is the same and the new company keeps building the same boat. Not buying the liabilities frees them from having to honor warranties.
In the end, it's better not to rely on a salesman's assurance that "everything will be taken care of." Read the warranty or call the manufacturer to find out for certain. Warranties may be hard to wade through, but to head off surprises in the future, spend a little quality time with yours. And if the promises unravel? Contact the BoatUS Consumer Protection Bureau for help.
BoatUS Consumer Protection may be able to help you find a workable solution. If you need help, email us at consumerprotection@BoatUS.com or call (703) 461-2856.
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