Insuring Sailboat with Multiple Owners

[JerseyJoe]

Originally Posted by Hydroghyl

I think the suggestion that you talk to your agent is a good one. I don't see why boat insurance is that much different than car insurance and you are allowed to let someone else drive your car. It is still insured


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Except motoring a 36' boat in and out of a marina or anywhere in NYC/NJ area requires a Coast Guard safety course certified operator at the very minimum, unless truly sailing on and off the mooring. I think the insurance company would be very interested in whom the operators of such a vessel would be in such a congested marine traffic area as NYC and their experience or qualifications.

Yes best to talk to insurance agent, NY Parks Dept and perhaps the Coast Guard as well if boat being purchased is documented.

[skipmac]

Originally Posted by OrangeCrush

Thanks! The Pearson 26 has treated us very well but I'm ready for something a bit more substantial so I've listed her for sale. I'm very sad to see her go but excited to sail to new places in a new boat.

With every boat there comes a time to move on. Good luck on whatever comes next.

Originally Posted by OrangeCrush

I completely agree with what you said about outside perceptions and the Coast Guard... so what might be the best way to structure such a friendly arrangement?

Marina policy aside, it doesn't seem like accepting a one time gift from a few friends months before buying a boat would get me in trouble by itself. I'd be the owner/operator and they are unpaid and unpaying crew. I guess the part that would cause a problem would be having them come and go like owners or put their names on some paperwork without it being completely official.

So what if I made them part owners on the title? Would I be able to insure the boat as the only operator or are they automatically assumed to be sailing the boat? And how many owners can you put on a title anyway, and how is their percent share represented?

Worst case is I'm just not able to give them access to the boat at the mooring, and the other worst case is that insurance is a bit more expensive with more sailors on the policy.

But if there is a way to do it properly, either officially or unofficially, I'm all for it.

I will have to echo what someone else recommended. To be sure you should consult a pro and not a bunch of boat bums on the internet. I include myself in that however like the rest of the bums I'll go ahead and offer my semi informed recommendation.

From my understanding any financial arrangements between the owner of a boat and any other parties must very clearly be equal and reasonable sharing of direct expenses and nothing more. I believe this usually is interpreted as gas and food. Anything that falls outside of that definition could or would be interpreted as some type of business transaction. If the owner is on the boat and operates the boat with other parties onboard that could be interpreted as operating a boat for hire and require the operator to have a captain's license.

If the owner is not on board then I think it would be more of an insurance issue and the insurance companies decision on whether or not it would be chartering the boat to the other parties or not. I would think that any parties named on the title would be assumed by the insurance company to be potential operators of the boat and their experience and skill level would be considered in setting the insurance rate. Bottom line, talk to the insurance company.

[Stumble]

You guys are seriously overthinking the paid passenger issue. So long as they aren't paying to be taken sailing it isn't an issue. In this case there is no attempt to make a profit, thus no commercial operation. This looks much more like a conditional loan which doesn't involve commercial issues at all.

The real issue as I see it is what does the marine require for your buddies to get access to the boat. Then you need to resolve that. If it's just adding them to the insurance, then have them contribute to the increased cost from their use (it won't be much), if they need to be on the title then add them to the title.

If they are on the title, then before any money changes hands you need to write up an ownership agreement that delineates rights and responsibilities for all the parties. It doesn't have to be complicated, but it does need to handle normal maintenance, bills, insurance, usage, sale procedes, and forced dissolution.

[OrangeCrush]

Originally Posted by JerseyJoe

Do you already have the mooring at the marina secured? Because you might find there is quite a waiting list so your questions are all mute in that case in the near term.
Do your friends currently carry this arrangement (minus the cash) with you at the same marina on the Pearson 26? What is sounds like is you are in essence intending to provide a boatel to your friends which indeed who require insurance as such for all involved for safety sake. Especially if they are bringing their friends for overnights or dinners or such without your supervision.
Best as all have suggested prior here. Bear the brunt of doing the deal properly. All names on title as co-owners and all names on insurance with intended use outlined. Since your question is hypothetical, remember that the range of accidents are hypothetical as well, but quite possible. Pay up front for sound mind and sound arrangement. My two bits.

Thanks for the input.

They used to have a huge wait list but since Sandy and the recession it's slowed down and right now there is no wait. That could change by the time I get the boat, of course.

No, we don't have any such arrangement with the Pearson 26. My friends sail the boat with me during the summer and they just chip in for gas and expenses as we go along.

Yes I agree I will do it properly, just working out the what that looks like.

[OrangeCrush]

Originally Posted by JerseyJoe

Except motoring a 36' boat in and out of a marina or anywhere in NYC/NJ area requires a Coast Guard safety course certified operator at the very minimum, unless truly sailing on and off the mooring.

Are you sure about this? First I've heard of any special licensing requirements in the area. I don't sail a 36 foot boat here, but I know people that do and they definitely don't have licenses (except the new law, but most adults are grandfathered in). I definitely won't be sailing on and off the mooring much when the Hudson river current is cranking at around 3 knots through the mooring field.

I am actually working on my 25 ton inland master license with sailing endorsement and near coastal OUPV, should be done by the Spring. I don't have any immediate commercial aspirations though nor do I want to make it a commercial operation between my buddies, so most of the arguments here still apply.

[Dennis.G]

One thing, is I would forget a liability only insurance and make sure you have a full coverage policy. That way if a 10% owner sinks the boat you don't end up screwed.

[hellosailor]

"Except motoring a 36' boat in and out of a marina or anywhere in NYC/NJ area requires a Coast Guard safety course certified operator at the very minimum,"


Joe, unless NY snuck one by me recently, you're wrong on that. New Jersey requires a "certified" skipper, NY does not. NJ has gone a bit fascist on this, compared to most other states where old boaters are grandfathered (no certificate required) and out-of-staters are exempted.

[OrangeCrush]

I just read up a bit on NJ's boater safety course. Definitely pretty ridiculous to make out of state boaters pay $70+ bucks and take an online course just to pass through. I think New Hampshire has something similar, but it's easier to skip over NH than the NJ coastline.

Since there is no marine fuel in Manhattan, there is something to this point. You have to cross the Hudson to fuel up, and therefore in theory need the safety certificate. I also often anchor behind the Statue of Liberty and off Sandy Hook. I wonder how exactly they define New Jersey waters. The middle of the Hudson River?

There is an exemption for the people carrying the USCG captains license though, plus temporary reciprocity for other states' safety course.

http://www.njsp.org/maritime/faq.html



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[JerseyJoe]

Originally Posted by OrangeCrush

Are you sure about this? First I've heard of any special licensing requirements in the area. I don't sail a 36 foot boat here, but I know people that do and they definitely don't have licenses (except the new law, but most adults are grandfathered in). I definitely won't be sailing on and off the mooring much when the Hudson river current is cranking at around 3 knots through the mooring field.

I am actually working on my 25 ton inland master license with sailing endorsement and near coastal OUPV, should be done by the Spring. I don't have any immediate commercial aspirations though nor do I want to make it a commercial operation between my buddies, so most of the arguments here still apply.

If you or your buddies sail in NJ waters under power you will need a Boating Safety Certificate issued by the NJ State Police Marine Division after completing an approved US Coast Guard Safe Boating Class via the Coast Guard Auxiliary or other approved commercial course. I presume they will accept another state's similar certification certificate as well. So unless you plan on being only on NY side of the river or harbor the entire time you are under power than you are indeed violating the law if you pass into NJ waters without it. I do not know what NY specifics are but it is the law in NJ for anything from Jet Ski, Dinghy and up using motor under way.

[hellosailor]

The NASBLA course can be found free online. But the "exemption" for USCG licensed captains is BS. NJ knows very well that federal jurisdiction on navigable waters takes precedence over local laws, and if the USCG says someone is good to go--that's it. NJ has no authority to contradict that.

I'm just surprised no one has challenged NJ in the courts yet. They can require what they want of residents, but transients and vessels crossing NJ whole engaged in navigation, don't fall under NJ jurisdiction the same way. There's only so far that "public safety" can push things.

[JerseyJoe]

I agree with you HelloSailor. Just the fact though that it only takes 1 NJ Marine Police boat with a hankering to ruin your day with guests onboard to actually ruin your days with guests onboard.

[Stu Jackson]

OC, as just one of "a bunch of boat bums on the internet" my impression is that you've been given a lot of good advice and are still "arguing" with it. Take a deep breath. Check with your insurance agent. ITWMB, I personally wouldn't care at ll about how a few dollars ended up in my pockets from my friends before I bought a boat (beer payments for the future??? ). Who cares? Somebody might, so just be careful. Your only two issues, then, it seems are insurance and the marina. Do some homework and research, then get back to us and tell us how it all came out. Good luck.

[OrangeCrush]

Apart from the jurisdiction issues, I'm interested to know how this is actually going to play out in New York Harbor. In my experience there are more Coast Guard and NYC police boats than anything else, followed by Port Authority Police boats, while NJ Police boats are around but are relatively rare. Is it possible that these sporadic police units are really going to be enforcing NJ licensing regs down a vague state line through the center of the Harbor that is not even delineated on most charts? I think it's safe to say that most NY boaters are not aware of this and have definitely not taken this course.


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[OrangeCrush]

[QUOTE=you've been given a lot of good advice and are still "arguing" with it. [/QUOTE]


Hey Stu,

I really didn't think I was arguing with any of the advice, sorry if I gave that impression. I do appreciate the input. I don't have an insurance agent right now of any kind. I wasn't sure what to do about the multiple owners thing, but I agree that if it means paying a little more to make it all proper and cover my butt it's well worth it.

The NJ thing was news to me so I've been eager to hear more about it. I should have a USCG license by the time I get the boat so it shouldn't be an issue for me, but it's pretty interesting anyway.

I thought we were just having a good conversation, not an argument! I'm at least a year away from actually buying anything, but I'll let everyone know how it works out in the end.


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[rwidman]

I wouldn't want to be one of the "buddies" putting in 10% without any documentation. And what happens if one of them wants out? Or has to get out because of a job transfer or divorce? Or the ex wife gets half of his 10% and wants to use the boat??

Have you considered forming an LLC and putting the boat in the LLC's name? If your buddies are part owners of the LLC they should be considered part owners of the boat.

Whatever, you should be talking to the insurance agent and marina management.