Survey impact on insurance

[sailor11767]

I'm not terribly sure this is the right forum, but it pertains to maintenance impacting insurance, so here goes.

I'm contemplating (half the time, I'm ready to plunge, the other half I'm running for dry land) buying a tired E-35 in Maine. Tim Reilly has given me a pretty thorough photo-documentary on the boat's issues, and it's a lot of work.

Much of the work is cosmetic or nice to have stuff (in this vein, I'd include the rotted out mainsheet -- failure does not really affect safety of life and limb as long as you take down the sail before the hurricane hits).

Some of the work is minor safety type issues that would be high on a list, but perhaps not critical in the first season. This would be items like completely reworking all of the owner installed rat's nest of inadequate wiring to the stereo system and such. This could be made "safe" in the first season by simply turning off the breakers.

Some of the work is more major safety type issues that would need to be done before getting more than a mile or two from shore -- things like seized thru-hulls.

There's also the question of evolving standards -- I remember many years ago, my father's insurance company required him to add insulating covers over his battery terminals. A "good thing" to be sure, but it was an evolving standard, not a failed piece of equipment.

Of course, before I buy the boat, I'm going to have a survey so that I know the list of items that need to be done, and can start to prioritize them.

And the final piece of this puzzle is that I live 10 hours drive from the boat, so work done before I get her home is either going to be done by me in a VERY short period of time (I'm targeting a 3-day fit-out visit), or I'm going to have to pay the yard a fortune to have them do the work.

So, here is the question. In 2 years, I'd have a boat that had all the A items, all the B items, and probably all the C items addressed. But on day one, I'd be hard pressed to have all the A items done. In order to get it insured, the insurance companies I've talked to will require a survey. What worries me is that I'll get the survey, negotiate the price, buy the boat, call the insurance company, and get a 10 page list of work that needs to be done before I can move the boat. The actual question is, what kinds of things do insurance companies look for in the survey, and how agreeable are they in working with a chap on them.

Thanks for the thoughts,

Harry

 

[u079721]

The surveys normally have categories of comments, like "Must be fixed to be seaworthy" or "Should be fixed" to "Would be nice" type of suggestions. I'm sure it will vary with the underwriter, but my experience has been that I've had to agree to do everything in the first category as part of the insurance being valid, and probably many of the second.

As an example of the first, you might have a cracked through hull, or missing fire extinguisher. As an example of the second is you might not have double hose clamps on all your hoses. I leaking port might be the third.

I've no idea how you document any repairs you do yourself though. Pictures?

In your case you might have a discussion with the surveyor prior to the survey, so he understands your wants and needs as to immediate repairs. He might then write things up to make it clear what the minimum is that needs to be done to get the boat seaworthy.

 

[tenders]

It is entirely possible to own an uninsurable boat 10 hours away and years from becoming insurable. Not smart, but possible!

If there's stuff you already know must be fixed, the price you agree to pay must include some provision for getting this done in a timeframe that's acceptable to you--either fixed by you, or by somebody else for you. From there:

1. Make the contract subject to a satisfactory survey and one in which you can obtain insurance coverage.
2. No survey is "satisfactory." After the survey, plan to negotiate the agreed-upon price down to the point at which the unexpected must-have items, whether they are must-have by your definition or by that of the insurance company's, are repaired by the yard or on your time at your convenience.

When I bought my boat many moons ago the insurance company insisted that some things on the survey be repaired immediately (leaking fuel tank) and gave me 30-60 days to fix a few things they were very concerned about, like AC breakers. I had to send them a written statement that they had been fixed. But there was nothing on the list that prevented me from moving the boat 120 miles to my homeport.

Personally, I would be much more worried about your life insurance policy than your boat policy. It is not prudent to expect to get a tired old boat so ready for sea in three days that she'll be safe to move halfway down the coast.

Here's an example of something I hoped to fix in one day last year that ended up taking a month.

Thru-hulls -> proper seacocks -> compatible bronze fasteners -> backing plates -> deck drain fittings -> drain hose -> bilge paint

 

[SASSY]

Insurance

From my understanding the insurer is looking for a safe boat that does not represent a high risk to insure. Risk of fire, and sinking are the two most imortant areas of concern. Chain plates and rigging are also of significant importance. You may be able to attain a temporary rider that covers you until a pre-aranged haul out date. If this can not be aranged focus on the most important aspects of your lists that revolve around the major causes for loss. Any hoses or clamps below the water line, inspect rigging and chain plates, remove all fire hazards such as wiring in the engine compatment. If my old boat could be insured then I'm sure yours can be too. We had major issues with core repair around the chain plates wich had to be repaired prior to the comencment of the insurance. One thing a good survey will do is give you direction, they will list any concerns and aloow you to focus on what is required aposed to throwing a dart and hoping for the best. Or you could look a little harder and a little longer and find a boat in better condition aleveating you of these concerns.
Good luck.
Andy

 

[mherrcat]

I just went through this to get insurance on my boat. The survey will include a "statement of insurability" that should read something like this:

"The 'NAME OF YOUR BOAT', an Ericson 35, is a reputably constructed and designed production fiberglass sailing/auxiliary yacht. She is designed as a coastwise and limited offshore sailing vessel. Upon the successful completion of the recommendations as outlined and if these recommendations are accomplished to acceptable marine industry standards and if the vessel is used in accordance to her intended design and operated and maintained in a prudent manner this surveyor is not aware of any reason why this vessel would not be insurable."

Then there will be a list of "Recommendations & Observations" that will list the things that the surveyor believes should be repaired/replaced. Some of these things the insurance company may take your word for that you have addressed, some they will require an invoice from a boatyard (or rigger, etc.) that they have been addressed. (If you do the work yourself they may accept invoices for the parts/materials.)

There will also be a list of "Advisory Notes & Comments" that are not critical but should be checked regularly.

In my particular case there were cracked swage fittings on two shrouds. The insurance company gave me the insurance with a "port risk only" provision, which meant the boat was not insured for navigation. Basically I could let it sit in a marina or get the insurance company's permission to move it a short distance, under power only, to a boatyard for repairs. I did this to have the bottom painted and the shaft coupling replaced. When the rigger comes out to replace the shrouds, and I give a copy of the invoice to the insurance company, they will lift the "port risk only" provision and I will be able to sail again. Woo Hoo!

FYI, surveyors do make mistakes. On my survey (done by the previous owner) the surveyor listed the cap shroud swage fittings as cracked. In actuality it was the intermediate shrouds; which the rigger confirmed

 

[rwthomas1]

FWIW, the surveyor that checked out my boat prior to purchase missed several things that I thought were glaringly obvious after the fact. You never know what the surveyor will find or just not see. More to the point, do you intend on sailing the boat home? If so its your life and your risk. I would make damned sure the rig, sails, running rigging, seacocks, etc. are all in perfect working order before attempting a trip like that. Or get a truck to haul it. RT

 

[sailor11767]

I've about talked myself out of this boat, but the discussion is still enlightening. I'm all in favor of "safety." However, I'm not sure that all mandatory insurance items are high on the urgent safety list. I spoke with a buddy who bought an older C&C a few years back. He pulled his survey, and it had three mandatory insurance items:

* Oil discharge placard. Not a safety item, but legally required and easy to do.

* Replace all 110 wire with stranded wire. The boat was built, and had gone for many years, with solid wire. I'm in favor of the replacement, but I tend to think that this item could be put off for a year, especially if you don't hook up shore power.

* Rewire all aftermarket 12V that was done with non-marine wire and wire nuts. Another "agreed" item, but I'm not entirely sure it's an urgent safety item. All critical systems (running lights, bilge pump, etc) were factory wired, so no issues with them. If the aftermarket cassette player or autopilot went on the fritz, it'd be inconvenient but not exactly hazardous. The wiring is highly unlikely to start a fire, since it's all likely to be fused. Open circuit (inop condition) is a much more likely scenario.

I'd consider things like going over all thru hulls, cleaning the junk and dirt out of the bilge so the bilge pump works, ensuring plugs are beside all thru hulls, to be perhaps a higher priority than these three items. The bigger thing is that, if I were to have to have this work done from 500 miles away, that means yard work. That means big bucks. That means that essentially NO E-35/II is a viable purchase unless it is very local. I would submit that the E-35 was built with solid 110 wiring (I know of two other mfg's of that vintage that used household wiring), and that alone would be an easy $1,000 yard upgrade. I've already factored into my budget a yard applied bottom paint, and I've seriously considered having the yard service all the thru-hulls. And, remember, a trip down half the East Coast is not significantly different than most boat's summer schedule. It's only about 14 days of sailing, and it's all near-coastal.

Of course, the boat I have owned and loved these last 14 years has no battery, no wiring, no running lights, no bilge pump, no chart table (and I don't carry charts), no engine, no radio (when I pleasure sail, I sometimes carry a hand held), no head, no 110V system, no flares (although I bought one of those newfangled SOS flashlights, but I've never carried it because I don't go out at night), and no thru-hulls. Small boat sailing gives a different perspective. To balance that perspective though, I have many thousands of miles of cruising and racing in boats up to 98 feet, including two trans-Atlantic crossings. I appreciate safety as much as the next guy.

But the discussion is certainly educational, so keep it going!

 

[rwthomas1]

When you break down the costs involved:
-Pay yard to do work to prepare the boat for even coastal hops
OR
-Take week or more out of work to do some or all of it yourself.

AND

-Time out of work to sail the boat down the coast home, at least two weeks

Add up the lost wages and other costs and having a truck just haul it to you looks a lot better. Then you can work on it at your own pace. Surprise problems, and there will be some, won't be a big deal since you aren't on a schedule and the funds can be accumulated since you aren't leaving tomorrow.... Whenever I do anything that is "rushed" or has a deadline attached there is always a compromise. I don't like to compromise.

RT

 

[Sven]

-Time out of work to sail the boat down the coast home, at least two weeks

Is that a "pro" or a "con" ?

Kidding aside, many mishap stories end by noting that the underlying cause was that we/they "were sailing on a schedule".

When we had to get immediate coverage we went with Progressive as a stopgap. They didn't cover the purchase price but gave us some coverage including that needed for marinas. Now we have "covered" time to replace the standing rigging so other insurance companies will accept our beauty when she has had that work done.


-Sven

 

[sailor11767]

Actually, that question about "is that a con" was a big thought in the thoughts we were having. We figured that since we had "paid the admission" we ought to "enjoy the show." We were counting on 1 or 2 week long visits up there to cruise in Maine before heading south, since the chances of getting the boat back up there in the future would be slim. Those cruises would also include a fairly heavy component of upgrades and system review as well.

The thought of "Stopgap" insurance had also crossed my mind. I'd hate to be exposed on the boat (but could accept that), but there is no way I'd allow myself to be exposed on liability.

Harry

 

[Sven]

They didn't cover the purchase price

I should have written "full purchase price". They limited the value coverage to $40K but that doesn't leave us too exposed.



-Sven

 

[gareth harris]

Some insurance companies are more willing to work with you than others, in my experience; in the current risk averse climate it could be tough to work something out.

When I bought Freyja I knew nothing about boats - nothing. Due to the same problem you describe with insurance after a long list from the surveyor, I got the previous owner to sail the boat to my slip with me under his ownership and insurance. It did not seem a big deal to go a fairly short distance in southern California, however the surveyor had missed the rotten bulkheads at the chain plates, one of which collapsed en route, and if the wind had not died the mast may well have come down. Other less drastic problems discovered during the trip included the head dumping raw sewage onto the cabin sole.

I agree with whoever it was above who suggested trucking any boat that you are buying in anything less than a very good condition.

Gareth
Freyja E35 #241 1972