TYPES OF SURVEYS

Types of surveys include Pre-purchase, Condition & Valuation or Insurance and Financial, Damage and Appraisal.

Pre-purchase Survey

A pre-purchase survey is performed on behalf of a prospective buyer to determine the vessel’s condition, safety and fair market value. To insure the buyer is paying a fair price the pre-purchase survey is typically the most comprehensive inspection a vessel can be put through. The final survey report provides detailed inspection results with photographs, and makes recommendations for repairs and modifications to meet accepted standards for condition and safety. It is not uncommon for the savings to the buyer, on both the negotiated purchase price and subsequent unexpected repair costs, to far outweigh the cost of the survey.

Pre-purchase surveys include a visual inspection of the vessel, on land and in the water, and usually a sea trial. Sea trials involve assessing the performance of propulsion and steering systems, at idle through full load conditions. There are also instances where a pre-purchase survey will only require an on-land or on-water survey, usually if it’s a newer boat.

Based on the age and condition of the vessel and the current demand for boats of its type, the fair market and replacement values of the boat will be determined. The boat’s value may also be considerably affected by its geographic location.

Condition & Value or Insurance and Financial Surveys

C&V or Insurance and Financial surveys do not differ substantially from a Pre-purchase survey as in all cases the insurance company or financial institution are looking to substantiate the fair market value of the vessel. The insurance company will also pay particular attention to the vessel meeting applicable rules and regulations for fire prevention, safety and condition standards, and may require the estimated replacement value. The safer the vessel the less likely claims will be made for damage or personal injury. Financial institutions want to be sure they are not financing the boat in disproportion to its actual market value.

Insurance surveys are also requested by the insurance company for coverage renewal purposes, or to provide new coverage if the owner plans to change insurance companies. Financial institutions may request a new survey when refinancing is being sought by the owner. In both cases, the survey is requested by the owner, not the buyer, and less propulsion and systems testing is usually required to satisfy the survey requirements of the institution. A sea trial is not usually performed.

Damage Surveys

Damage surveys are performed on behalf of the insurance company to determine the adjustment amount for repairs or loss. It may also be necessary to recommend repair facilities and supervise the repair process.

In the case of a rare dispute between the insured and insurer over the adjustment amount of a damaged boat, damage surveys are occasionally done on behalf of the vessel's owner.

Appraisal Surveys

Appraisal surveys typically require a lower level of inspection and are performed solely to determine the value of a boat, whether for estate and divorce settlements, IRS documentation for charitable donations, or to assist an owner in appraising the value of a boat prior to placing it on the market.