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Old 01-10-2013, 19:26   #1
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Insurance vs. Pre-purchase Survey

I'm looking to purchase a boat in the 38-40 range. I found what appears to be a well-maintained 40. The seller has provided me with a 6 month old survey performed for "insurance valuation". The surveyor notes that several key items (i.e. sails) were not inspected. The valuation was a bit above the asking price so there appears to be value in the boat.

Question: Is an insurance survey as comprehensive / thorough as a pre-purchase survey? As this boat will potentially be my home I was planning on another survey - out-of-water - any thoughts?

Thanks.
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Old 01-10-2013, 19:37   #2
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Re: Insurance vs. Pre-purchase Survey

Absolutely, positively NOT. You should put no confidence in an insurance survey. An insurance survey is pretty much a scam on all levels. The insurance company wants documentation that they have an insurable asset, the boat owner wants to show they have an insurable asset, and the surveyor wants to be paid for doing very little work.

So what results is basically a surveyor is hired by a boat owner at a specially low "insurance survey" price to visit the boat, give it a cursory inspection for seaworthyness and write a short summary for the insurance company containing the value of the boat the owner wants it insured for.

Everyone is happy. But under no circumstances should you confuse that report with a proper survey, or with the actual realistic value of the boat. The boat's value is only what someone will pay for it - not what it is insured for.

Get a real pre-purchase out of water and test sail survey. It is money very well spent in your favor only.

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Old 01-10-2013, 19:54   #3
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Re: Insurance vs. Pre-purchase Survey

Thank you for the reply. I felt the same way but given my lack of experience I was hoping for confirmation. Again, thank you.
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Old 01-10-2013, 20:17   #4
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Re: Insurance vs. Pre-purchase Survey

Scam was probably not the correct term for me to use. Insurance surveys make everyone involved happy and fulfills requirements, so no one has been scammed. It would only be a scam if a buyer was led to believe that an insurance survey was an appropriate substitute for a pre-purchase survey.

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Old 01-10-2013, 20:20   #5
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Re: Insurance vs. Pre-purchase Survey

Just to augment Mark's excellent advice a bit - I would be very cautious about trusting any monetary value arising from a "real" survey either. You need to do your own comparable valuations. A good broker may help you with that if he is so inclined. There may also be good surveyors out there but if so I don't know any of them. Personally I think recreational boat surveying is a mugs game played by scammers and suckers.
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Old 02-10-2013, 05:07   #6
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Always have your own survey done. Ideally, by a surveyor who has no prior relationship with seller or broker....this can be surprisingly hard to find unless you bring a surveyor in from another location.

And do out of the water....this will cost you more, but could save you many thousands.
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Old 02-10-2013, 05:11   #7
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For market value take a look at buc.net, and other similar vessels listed for sale, not the survey.
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Old 02-10-2013, 09:17   #8
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Re: Insurance vs. Pre-purchase Survey

About something similar, can you use the pre purchase survey for insurance purposes too?
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Old 02-10-2013, 11:00   #9
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Re: Insurance vs. Pre-purchase Survey

I thought I needed an insurance survey this last year because I changed insurance companies. I ask the broker which surveyor I should use and he said I wanted the "blind one". There is a big difference between the two types of surveys
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Old 02-10-2013, 11:03   #10
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Re: Insurance vs. Pre-purchase Survey

That difference may also mean it may not be advisable to use a detailed purchase survey when it comes time to get the boat insured. I learned that lesson the hard way.
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Old 02-10-2013, 17:34   #11
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Originally Posted by la reverie View Post
About something similar, can you use the pre purchase survey for insurance purposes too?
Yes, but as pointed out, be sure you understand which deficiencies the insurer will want resolved before they will bind coverage. Better yet, require the seller to resolve them before you close.
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Old 02-10-2013, 17:48   #12
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Re: Insurance vs. Pre-purchase Survey

Quote:
Originally Posted by la reverie View Post
About something similar, can you use the pre purchase survey for insurance purposes too?
I had an out of water survey immediately before buying that worked for my insurance too. . . although I was sure she was in good shape and the seller had a two year old survey. It is a good investment. IMO, Be present and active in the survey. Ask questions and learn about the boat, take the surveyor aside and talk without the owner present. My survey cost ~$300 and the Haul-out and yard cost a little less. Since I knew she was gonna be mine I kept her in the yard a few days for new bottom paint and zincs.
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Old 02-10-2013, 18:03   #13
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Re: Insurance vs. Pre-purchase Survey

A pre-purchase survey will always be acceptable for an insurance policy.

The owner should never be present for a pre-purchase survey other than to deliver the boat to the haulout and be on board during a sea trial.

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Old 02-10-2013, 18:05   #14
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+1 and ditto on all points in jkindredpdx's post.

Once you're at final selection stage of your yacht search, Survey is your chance to get beyond the "sales pitch" from the vendor and really find out the technical nitty gritty and vessel condition. Get in the crawl space and under the cabin stows and locker lids as the Surveyor is inspecting. Ask Lots of questions.

Always get haul-out and test sail too, as part of the Surveyor's inspection. If the vendor has any issue with these logistics, could there be an issue with the vessel?

Chances are the Surveyor may not pick up on everything, but you may in fact uncover more by asking "silly" questions. Additionally any issues the Surveyor finds go into a list for you to use in negotiating down the price.

Try and get a recommended qualified Surveyor, who is also certified by the Insurance company.

Edit: and disagree with colmj, you can always ask for privacy at any time during inspection. How else could you find all hidden areas and operate all latches and systems on an unfamiliar vessel? There are some quite non-standard modifications out there!
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Old 05-10-2013, 05:49   #15
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Re: Insurance vs. Pre-purchase Survey

Your own survey saves you money. The price will always come down more than the cost of the survey after you show all the crap you have to fix to the owner.
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