yacht insurance no survey

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Any insurers not requiring a survey?

• Thread starter Mandarin331
• Start date 15 Jan 2022
• 15 Jan 2022

Mandarin331

We are hoping to buy a small (23') GRP trailer sailor next week, which is in good condition. In the past we've used GJW but they require a survey for any boat over 30 years old (and this is 34). As surveys cost £500 upwards this is a large proportion of the cost of purchase. I've read that there are insurers out there who don't need a survey but don't have any names, can anyone recommend one?  

Well-known member

Does such a thing as 3rd party only insurance exist for boats?  

Northern Star

Active member.

Just renewed with these guys and do an on-line quote: Haven Knox Johnston | Specialist Boat Insurance  

Noble Marine Ltd.  

westernman said: Does such a thing as 3rd party only insurance exist for boats? Click to expand...

Many thanks for your input, much appreciated. I found Y Yacht (Topsail) who look promising, I'll ring them on Monday. Both Noble and Haven Knox require at least an initial survey according to their FAQs.  

You are unlikely to get insurance for a 34 year old boat as a new applicant. A boat of this age will almost certainly require new rigging if there is no evidence that it has been replaced in the last 10m years. Insurers are generally being much more picky than they used to be making full all risks insurance very difficult for older, lower value boats. Just been through this, survey was around £400 and essential work about £2k , although I am actually spending more as will be keeping the boat for a few years. Third Party is cheap - well under £200.  

• 16 Jan 2022

Mandarin331 said: Many thanks for your input, much appreciated. I found Y Yacht (Topsail) who look promising, I'll ring them on Monday. Both Noble and Haven Knox require at least an initial survey according to their FAQs. Click to expand...

dolabriform

For a 23 footer take a look at Nav & Gen small craft policy: https://www.zurich.co.uk/navigators-and-general/boat-insurance/small-craft  

Barnacle Bill

Pantaenius? They seem flexible and realistic about most things. Give them a call.  

I insured my then 40 year-old 24 footer with Bishop Skinner. They wanted photos showing the condition of the boat. This was repeated every 3 to 5 years,. But never asked for a survey. The policy had a clause which required I took 'all reasonable steps' to ensure the boat was in seaworthy condition. So how do you prove that? I paid a boatbuilder to inspect and give me a written opinio n. A fraction of the cost of a Survey,and provides actual evidence you tried!  

Boat & Yacht Insurance Comparison brought to you by Compare Boat Insurance 32 foot boat 1986 boat with no survey and very few restricions  

Noble Marine Ltd. 52-year old Twister 28' sloop. Last surveyed 2002. Insured value £15,000. Premium £172.00 for comprehensive cover plus legal expenses.  

I am with Topsail ( Y yacht insurance that was). I have already been told that if I renew with them this year I will require an out of water survey. My boat has reached 30 years of age, from memory I am fairly sure they wanted sight of a survey 7 years ago when i bought her.  

Been with Trafford’s for years, ways to deal with ie you can actually speak with someone who knows what they’re talking about  

• 17 Jan 2022

ICTM said: I am with Topsail ( Y yacht insurance that was). I have already been told that if I renew with them this year I will require an out of water survey. My boat has reached 30 years of age, from memory I am fairly sure they wanted sight of a survey 7 years ago when i bought her. Click to expand...

• 18 Jan 2022

Thanks for all the input, GJW and Nav & General both offered prices without survey due to size and value, however in the end the current owners' insurers agreed to keep insuring the boat without a survey so we'll go with that for the first year.  

Mandarin331 said: Thanks for all the input, GJW and Nav & General both offered prices without survey due to size and value, however in the end the current owners' insurers agreed to keep insuring the boat without a survey so we'll go with that for the first year. Click to expand...

Talulah said: That was a result. I am in a similar position. Topsail (formerly Y). They are requiring a survey before renewal next month. Boat now 30 years old. Problem is the boat is in La Roche Bernard. So I need a surveyor who is prepared to travel out or work off photos maybe. Any suggestions? Click to expand...

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Determining Condition And Value

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No one wants to overpay for a boat, so how can you get a good idea of its worth.

Be an educated consumer and have a surveyor look over any boat you’re considering purchasing — new or used.

For popular production boats, there are a few places that can help. Websites like NADAguides and BUCValu list values of hundreds of models.

Keep in mind that estimates from any service presume clean boats typically and appropriately equipped with everything in proper working order. For boats with limited resale activity, reliable valuations can't be developed until a model and year's production has been circulating for at least three years. And remember that no one can give you an accurate value of a boat sight unseen; that requires the knowledge of an experienced marine surveyor, who spends some hands-on time on the boat. Less popular and custom boats will also need to have a qualified marine surveyor appraise them. For boats that don't require a survey, online websites can help give you a sense of the value. And don't assume asking price — there's usually room for negotiation.

Determining Condition

If you're buying a jon boat or canoe, a visual inspection is probably enough to determine the overall condition of the boat, but few of us are expert enough to know about all the systems in a larger boat. Fortunately, there are professionals called "marine surveyors" who are experts. If you're going to spend a few thousand dollars or more on a boat, you need to hire one; it could be the most important buying decision you'll make.

A marine survey, which can be a couple of dozen pages long, is a snapshot of the condition and valuation of a boat on a specific day. Think of it this way: Buyers and sellers can speak for themselves, but an independent marine survey speaks for the boat. Because of its depth of information, it has several uses: It's designed to give a potential buyer a clear picture of the condition of the boat with respect to U.S. Coast Guard regulations and nationally recognized standards, to provide a fair market value for the boat, and to document any potentially dangerous deficiencies in the boat's systems.

Download the BoatUS Buyers Guide PDF to read this article and the entire guide.

A marine survey is also a useful tool for buyers when negotiating price based on what repairs or upgrades the boat needs. And finally, insurance and lending companies that need to know the true condition and fair market value of a vessel often require it. Insurance underwriters carefully read through a marine survey to determine whether the vessel is a good risk, and they may require an owner to address certain deficiencies.

Get The Right Surveyor

You wouldn't hire a plumber to rewire your house; the same goes for surveyors. Finding a qualified marine surveyor or a specialist is a matter of knowing where to look.

Marine surveyors are not regulated or licensed, so virtually anyone can call him- or herself a surveyor, and many unqualified people do. A good indicator of competence is a surveyor who has professional affiliations with the American Boat & Yacht Council (ABYC), plus either the National Association of Marine Surveyors (NAMS) or the Society of Accredited Marine Surveyors (SAMS).

Choose a surveyor who is familiar with the type of boat you're interested in. Some specialize in power, some in sail, others in wooden or metal boats. Never hire a marine surveyor referred to you by the seller or broker! A surveyor should have absolutely no affiliation with boat brokers, dealers, boat-repair shops, or others whose living depends on the sale or repair of boats — especially the one you're about to buy.

There are three main types of surveys done on a boat you're considering buying, and each requires special training to do them well. Sometimes one surveyor can do everything, but sometimes you may have to hire more than one.

Get The Right Survey

A condition and valuation survey (C&V) covers the hull and structures as well as the boat's systems. This type of thorough survey is usually required for insurance and financing; it's sometimes referred to as a "prepurchase survey." Whether your insurance company or lender requires it or not, BoatUS recommends always getting one before buying.

A proper C&V survey requires the boat to be hauled so the hull and underwater gear can be inspected. Good surveyors inspect a boat top to bottom, fore and aft. They'll look at the hull and deck and determine by sounding with a hammer and moisture meter whether there are voids or delamination, and they can identify places in the core that may eventually rot and become soft (and expensive to repair) before they're detectable by a buyer. A surveyor checks the condition of AC and DC electrical systems, plumbing and thru-hull fittings, deck hardware, propane and fuel systems, steering and controls, and safety equipment.

A proper marine survey will be an in-depth written report that evaluates the boat according to U.S. Coast Guard regulations as well as ABYC and National Fire Protection Association standards. A knowledgeable surveyor will also know if a specific make has a history of major problems. Don't rely on a survey prepared for a previous owner, even if it was done recently. A boat could have suffered damage since the last survey.

Engine surveys cover the operation and condition of propulsion and generator engines. Typically they include inspection of controls, electrical, cooling, and exhaust systems, as well as engine mounts. Compression, engine, and exhaust temperatures are also checked, and engine surveys typically include tests of oil samples, too.

But how do you know if you need one? Alison Mazon, a surveyor in Portland, Oregon, is one of a handful of hull surveyors who also does engine surveys. "An engine survey is warranted for particularly expensive or complex engines, and those with obvious lack of maintenance," says Mazon. "Many larger engines built since about 2006 have computers that can be read by trained personnel with the right equipment. A quick scan for computer faults may be a sign a more detailed analysis is needed."

A rigging survey looks at the condition of a sailboat's mast and boom and associated rigging. Inspections are made of attachment points, welds, standing and running rigging, and the mast step. Rigging surveyors either go up the mast or inspect the rig when it's off the boat. Whether a rigging survey is needed depends on the age, prior use of the rig, and its intended purpose.

Red flags that would signal the need for a rigging survey include a rig more than 10 years old, frayed stays, cracked swages, weeping chainplates, and turnbuckles that are bottomed out. The rig also needs to be surveyed if the boat will be used offshore or heavily raced.

Here's what a good survey provides:

• The condition of the boat and its equipment. A marine survey determines the condition of the boat's visible components and accessible structures at the time of the inspection. A survey provides a list of deficiencies as well as needed repairs and focuses on safety. Deficiencies in a survey can be used to renegotiate the sales price or scrap the deal altogether if needed repairs are too expensive or complicated.
• The value of the boat. Surveyors use pricing guides along with their vast experience in valuing boats. A seller or broker may think a boat has a specific worth, but until a survey is performed, those figures are only guesses. Banks and insurance companies use the survey value to determine loan and insurance hull value amounts. This is also a great tool for price negotiations and can easily pay for the cost of the survey.
• A budget for repairs and maintenance. Nearly any boat will have some defects and deficiencies. Knowing what they are beforehand makes it easier to know how much to budget for the future. Surveys typically provide a prioritized list of recommended repairs. The most important ones are critical to safety, and usually your insurance company will require them to be completed. The rest are things that can be done as you find time and money.

Just about every boat will have some issues, but a good survey will help you create a budget for repairs and maintenance before you make the purchase.

Survey Recommendations

Recommendations are just that — issues the surveyor found on the boat that may need to be addressed. It's the "may" part that's important here. Typically, a surveyor will list recommendations in order of importance, often as A, B, or C.

A-List Examples

A-list recommendations (more properly called "must-dos") are the most important ones. You can be sure your insurance company will require them — not just for your boat, but for the safety of you and your crew. These are issues that, unaddressed, can cause your boat to sink, burn, become involved in an accident, or cause serious injury. Even if you're not financing or insuring a boat, these recommendations need to be addressed before the boat is used:

• Worn or damaged below-waterline hoses, seacocks, and thru-hull fittings that pose a sinking hazard
• AC or DC wiring deficiencies that could cause a fire
• Lack of or nonfunctioning Coast Guard-required equipment, such as fire extinguishers, flares, or navigation lights
• Propane system deficiencies that could cause an explosion
• A vessel with too much horsepower that could make it unstable
• Lack of operable carbon-monoxide alarms
• Unsecured batteries or fuel tanks that could break loose and damage the hull, or cause a fire
• Missing oil-spill and waste-management placards. These are required by law and will be checked during a Coast Guard inspection

B-List Recommendations

These tend to include either (1) items that are not an immediate risk but will pose an unacceptable hazard if left uncorrected for too long or (2) things that may enhance the safety, value, and enjoyment of your boat. Some of these may cross over into A-list recommendations as far as underwriters are concerned and may also need to be addressed before your boat can be insured. For the most part, they're things you'll want to do, anyway. Here are some examples:

• Hoses and wires that are chafing or not installed to ABYC standards
• Worn cutless or rudder bearings
• Stiff or corroded steering or control cables
• Engine maintenance needed to forestall a larger problem
• Cleats or stanchions that need to be rebedded to prevent deck-core rot
• Heavy corrosion on fuel or water tanks

C-List Recommendations

The C-list generally includes normal upkeep items that should be addressed as you can.

Examples include:

• water leaks through ports or hatches,
• anodes in need of replacement,
• loose or worn engine belts, hoses, and engine mounts,
• cosmetic issues, and
• winches in need of service.

Keep in mind that while surveyors inspect a boat with an eye toward industry safety standards, such as those written by ABYC, they recognize that newer standards were not in place when older boats were built. But some of those standards, like the need for carbon-monoxide alarms or proper wiring, are critical enough that insurance underwriters may still require boats to comply with them.

All of the recommendations can be used as negotiation points for buyers. Any purchase contract should specify that a sale may be voided if the survey results are unacceptable to the buyer. In some cases, a seller may choose to do the required repairs before a sale, but make sure the boat is reinspected before the sale is finalized. Typically, surveyors will reinspect specific items for a fee once the sale is made and sign off that they have been properly done.

If, after the sale, the buyer chooses to make the repairs him- or herself, insurance coverage can begin immediately while the repairs are in progress. But either way, the insurance company will usually require proof — a written statement from the owner or yard bills — to confirm the recommendations have been completed correctly.

Attend The Survey Inspection

A good surveyor welcomes prospective buyers to be present at the survey. There's no better way to learn about your new boat than watching a professional methodically dig through it. The surveyor's notes will be more meaningful if he's able to discuss with you what he's examining. He'll also answer questions that might not be significant enough to be included in the written report, and can tell you about problems he's seen on similar boats that you can watch out for.

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Insuring Old Boats

Terms of depreciation waivers are getting tighter..

Editor’s note: Our recent article on marine insurance (see “ Consequential Damage Coverage ,” PS Jan. 2020) prompted  many questions from readers regarding  insurance for older boats. For answers,  we turned to Mark Pellerin of BoatUS  Marine Insurance Program (underwritten by GEICO), who, in addition to answering  these questions, offered this update on changes in its depreciation terms.  Depreciation and other policy details can  vary greatly, so be sure to check your policy  closesly to be aware of the terms of  coverage. For more on marine insurance,  see “ A Sailor’s Guide to Marine Insurance,”  PS October 2012 ).

Drew Frye’s “Consequential Damage Coverage ( PS Jan. 2020) along with subsequent letters from Ron Russell ( PS February 2020) and Gary Golden ( PS March 2020) has put some focus on the issue of boat insurance. As a leading insurer of recreational boats and as one source for Mr. Frye’s story, we recognize that we can do better explaining coverages we offer. With some additional changes coming to all BoatUS Marine Insurance Program agreed value policies (underwritten by GEICO Marine Insurance), we’d like to take a moment to do that.

To address Mr. Russell’s concern, let’s look at the three types of things considered in an “agreed hull value” policy when a partial loss occurs: “hard goods,” “soft goods,” and “machinery.” Note that I am using these terms merely to explain, and this issue confirms that every boater needs to understand their individual policy coverages and terminology.

As owner of a 47-year-old vessel, Mr. Russell states, “I discovered that a change in underwriting at BoatU.S. Insurance meant that I had virtually no hull or damage insurance – despite increasing premiums. That is because, independent of any agreed value, the maximum the policy would pay for any damage was reduced by 10 percent for every year past 20 years of age.” He also asks, “If I lose the mast, or get T-boned by another boat while sitting peacefully at anchor, the policy pays only 20 percent of the actual cost of repairs, less deductible?”

As in the fictional T-bone scenario, fiberglass repairs (including hull damage) as well as damage to things including wood, masts, spars, paint, rails, stainless frames, aluminum T-tops – what would generally be considered “hard goods” – would be depreciated under the existing policy Mr. Russell discusses. To address some of these items, such as the mast, spars, fiberglass, railings and stainless frames, we put into effect an endorsement that waives depreciation on those items in the event of a partial loss. While we do our best to notify customers of this endorsement through customer communications, it is possible that Mr. Russell was not aware of this endorsement. [ Editor’s note: Several readers said they were not aware of any option to waive depreciation. Other insurers, such as Chubb, exempt hulls from annual depreciation, even older ones, without the need for an added endorsement. ]

Depreciation Categories

“Soft goods,” such as a canvas T-tops, canvas enclosures, fabrics, carpeting, cushions and sails, under Mr. Russell’s policy were formerly depreciated upon the twentieth year of manufacture. So if the T-bone accident had damaged his boat’s canvas enclosure (not its stainless frame), Mr. Russell was correct in that depreciation on his BoatUS (GEICO Marine Insurance) policy would reduce the insurance claim payout on these items “by 10 percent for every year past 20 years of age.”

However, starting in mid-March 2020 under the updated GEICO Marine Insurance agreed hull value policy, sails, canvas, carpeting, cushions and fabrics will factor in depreciation beginning with the sixth year from the year of manufacture. While we acknowledge this has been reduced from the twentieth to the sixth year of manufacture, we hope boaters understand that soft goods have the shortest life in the marine environment, and a depreciation waiver may be added to eliminate some depreciation. More on that in a moment.

Beyond “hard goods” and “soft goods,” “machinery,” such as engines, gensets and other onboard  machinery were also formerly depreciated under Mr. Russell’s policy after the twentieth year of manufacture. In mid-March these items will see depreciation applied starting with the eleventh year of manufacture (with depreciation not greater than 80 percent).

Also starting in mid-March 2020, an updated, optional depreciation endorsement will eliminate depreciation for partial losses on both soft goods and machinery up to the twentieth year of manufacture. This will be available upon the policy’s inception and applicable to boats no more than 10 years of age. Current policyholders whose vessels meet the less-than-10-years-of-age requirement may also add this optional depreciation endorsement.

We will no longer offer a depreciation waiver for boats beyond 20 years of manufacture. Our goal is to provide a competitively priced policy while recognizing the cost challenges to replace “new for old” for soft goods more than six years old and machinery more than two-decades old. This approach to depreciation is similar to our policy prior to 2015, whereas instead of depreciation being applied to all partial losses after a certain amount of time, it will only be applied to specific items that do depreciate with use.

We encourage all boat owners to keep receipts documenting when equipment has been repaired or replaced as this can be a factor in reducing depreciation applied in the event of a partial loss.

Salvage Costs

Looking ahead and acknowledging Mr. Golden’s comments that hurricanes are indeed “the largest source of financial loss to U.S. boat owners,” everyone should understand their policy’s salvage coverage fine print. When fires, sinkings, shed-roof collapses, or running up on a shoal damages your boat, you end up with a “salvage” situation. If the boat is not a total loss and needs to be recovered and brought to a repair facility, salvage costs can escalate quickly.

Most boaters assume the cost of raising or moving the boat to a safe location is covered by their policy, but some marine insurers will subtract salvage costs from the insured value of the boat, reducing the funds available to repair the boat or the amount paid in the event of a total loss. Also, in case of a total loss, you may only have a small percentage, perhaps just five or ten percent of the insured value, to pay for recovering the boat, which may not cover the entire salvage bill.

Better policies – including our agreed hull value policies – don’t let you go it alone and provide salvage coverage that is separate but equal to the boat’s hull value coverage. Better insurers also handle the salvage process for you and don’t simply cut a check and run. [ Editor’s note: We found several insurers who cover complete salvage costs separately. ]

Lastly, understand that half of all sinkings occur at the dock when some small part below the waterline fails. However, these parts – an outdrive bellows, for example – most often fail due to “wear, tear, and corrosion” or a lack of maintenance, so the policy won’t pay for a new outdrive bellows. But here’s the rub: As a consequence of the failed bellows, your boat has sunk and is likely a total loss. Who pays for that?

That’s why you need “consequential damage” coverage that pays for losses that often start with a failed part that may be excluded under the policy. The small, inexpensive part that failed may not be covered, but the rest of the repairs or total loss will be, as Mr. Golden said. One caveat: This consequential damage coverage often applies only to specific types of losses, for example, the immediate consequential damage resulting from any fire, explosion, sinking, dismasting, collision or stranding. These are the types of losses that typically cause a constructive total loss scenario.

Thanks for allowing us to explain and to further address some changes coming to our policy. BoatUS and other insurers can and do update their policies from time to time which may result in changes to coverages. It’s critical that every boater fully understands his or her boat’s insurance policy.

Mark Pellerin is an insurance expert with BoatUS Marine Insurance.

Allstate , www.allstate.com

Atlass Insurance , atlassinsurance.com

Boat Us (Geico) , www.boatus.com

Chubb , www.chubb.com

Foremost , www.foremost.com

gowerie (IMIS) , www.gowerie.com

Nationwide , www.nationwide.com

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Boat US/ Geico marine no longer insures boats over 40 years old witch left me high and dry after having insurance through Boat US for over 25 years. Now I an stuck shopping for insurance and paying for a survey. When I got insurance through Boat US i was told if the decided the boat ever needed a survey in the future they would pay for it. Seems pretty Shady to me!

Did you find a company I have a 54 hatteras from 1973 that looks brand new and can’t find insurance?

As a long time Boat US member I called about insurance on my 1986 hatteras and was told they could not insure the boat because it was too old. It is becoming increasingly difficult to find insurance at all and of course marinas and boat yards want to see proof of insurance. Another case of insurance companies controlling how people live.

Remember If you are going to sink…….sink deep

The salvage guy always gets paid first and it comes out of your cut

progressive will insure it, however, I had to under-insure my 48 chris craft at $40K to get it covered and make the marina happy. The ugly part was a 30% increase next year. Really, when you have a big boat nothing gets cheaper. Travelers dropped me after 20 years 2 years ago. The Progressive on line policy build is really cool.

Thanks for the tip!

Our homeowners policy covers a 1986 33′ sailboat, 1976 22′ sailboat, and a 1995 19′ IO with riders at additional premium of about $300/year.

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How Much Is a Boat or Yacht Survey? (Costs & How to Prepare)

Boat and yacht surveys have become commonplace in the nautical world, both for people buying boats (wanting to check the conditions) and for insurance companies.

Both insurance surveys and pre-purchase surveys are led by marine surveyors, who check every component on the boat applicable (for example, the engine, navigation lights, water systems, safety equipment, etc.).

Yacht surveyors will help to determine a more accurate purchase price and policy costs for your insurance company.

But, how much is a boat survey?

The prices of a pre-purchase survey and an insurance survey can vary from around £10 per foot to around £20 per foot, if not more.

The price will depend on the:

• model of your specific boat
• type of craft or vessel
• as well as the surveyor you have chosen, their hourly rate and any travel costs for your/their location.

Let’s take a closer look at what you might expect on a boat survey day, and what else will influence the price.

How Much Does a Boat Survey Cost in The UK?

The cost of your boat survey will usually depend on the surveyors themselves.

Most marine surveyors charge per foot of the boat, while others have a set amount based on the general size and model of the boat. 

Some surveyors will charge you just over £20 per foot. 

Generally speaking, a boat survey can cost anywhere from about £450 to over £700, total.

That is why it is best to contact a few marine surveyors before making a final decision.

Their prices may not vary a great deal from one another, but if they are charging per foot of the boat, even a small difference in price could be significant.

In England and the rest of the UK, these are the fees you’re looking at for surveying boats

What About the Cost of A Yacht Surveyor?

Again, when it comes to the actual cost of a yacht surveyor, everything depends on the surveyor you choose, and the size and make of your boat. 

Some yacht surveyors will only charge you about £10 per foot, plus a baseline price, whereas others will cost you more (depending on their premium services, etc.). Once again – shop around.

Methods and Types of Boat and Yacht Survey (and how They Impact Price)

There are various types of boat and yacht surveys to choose from.

Most surveyors will need instruction from you about the specific inspections they need to carry out – based on insurance demands, etc. (Find out How to find good marine surveyors )

For example, they may be asked to do a full condition survey, which is common for buyers to seek before purchasing their boat and becoming a new owner. 

This ensures their future purchase is sound and ready to sail.

An insurance survey, meanwhile, will test an older boat and check its various components for the purposes of insurance coverage (as is obvious by the name!).

Ultrasound surveys, on the other hand, are useful for measuring the thickness of the hull platings. Rig surveys check rigging wires, and machinery and systems surveys check mechanical and electrical components in close detail.

Generally speaking, the most common boat surveys are insurance and full condition.

However, each survey carries a specific cost and fee.

Since full condition and insurance surveys thoroughly check multiple components of the boat, they tend to be the most expensive.

How to Save Money on Boat or Yacht Survey Costs

Thankfully, there are a few things that you can do to ensure that you save yourself a bit of money on your boat or yacht survey. 

• Clean the boat thoroughly before the survey. Cleaning up before a survey will save you and the surveyor a lot of time, ultimately saving you money. 
• De-clutter your boat. Taking non-essentials out of the boat before the survey will make it easier to clean and easier for the surveyor to access – saving time and money, too.
• Ensure that the batteries are working. If your boat is onshore and the boat is connected to the power of the port, then ensure that it is well connected and does work as expected. That means no need for extensive work or survey time.
• Service your engine before the survey. Ensuring that your engine starts easily during the survey will help a lot with time and with any potential issues that the surveyor could note!
• Check the hull for any damages. The hull will need to be in the best condition possible as the surveyor will look for any noteworthy damages – and again, the more time they spend, the more money you spend, too.
• Preparation for a sea trial – if you’re going on a sea trial (which is a key part of inspections), it may seem obvious, but if you haven’t turned on your vessel in a while, then it’s worth checking it still turns on and runs.

How to Instruct a Yacht Surveyor

Before hiring a boat surveyor, you must ensure that they are right for the job.

That means checking with your yacht insurance company about what they expect to be checked, what qualifications they expect the surveyor to have, and more. 

You should also always check that the boat surveyor that you hire has a professional indemnity insurance cover. 

If you’re worried, reach out to your insurance provider as soon as possible – they know what they’re doing and can tell you what to look for.

Frequently Asked Questions

Below are some frequently asked questions on a boat survey or yacht surveys:

Do I Need a Survey to Buy a Boat?

You do not necessarily need a boat survey to buy a boat.

Most insurance companies ask for boat surveys on vessels that are over 25 years old, although some might ask for surveys on newer models, too. 

However, if you are buying a boat, hiring a boat surveyor for yourself is highly recommended for most people.

They will be able to see any underlying issues that the ship might have, which helps to give you a better idea of what price you should be paying – and what investments and repairs you may have to make in the boat in the future. 

How Much Does a Narrowboat Survey Cost in The Uk?

Much like a survey for any other boat, the cost of the survey will depend on the size of the narrowboat and the surveyor you have chosen. 

Generally speaking, you will pay between £10 and £14 per foot for a narrowboat inspection.

Seeking out a marine surveyor or boat survey expert shouldn’t be a hassle.

Whether your insurance carrier needs a survey completed, or if you’re paying the above fees to gain assurance on a future purchase, surveying offers fantastic confidence.

Their report will show all their important findings and their inspection may uncover a red flag you wasn’t expecting. This makes the fee well worth it.

Keep a close eye on fees payable, surveying scope, and do your best to get your vessel up to code – getting someone to inspect your boat is great value for your protection and peace of mind.

If you need any advice, contact us. We’ve been a boat insurance broker for over 20 years and will be happy to help give you any independent advice on the process and what you need for your vessel’s intended use.

You can also find qualified surveyors here

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Full Chapter One

Survey Guide to Insurance Surveys

By david pascoe, introduction.

The insurance survey, Condition and Value survey or C&V as it is often referred to, is a type of survey intended for use by insurance companies for evaluating whether or not they wish to insure a particular vessel. For over 30 years surveyors have been providing this type of survey. But, unfortunately, the insurance industry has never set a standard as to the nature and extent of information that they require, and so surveyors have largely been left to guess at the kind of information that different insurance companies want. This guide will assist the surveyor in identifying the most appropriate information to be covered in the survey and report.

Insurance surveys can also serve as an appropriate format when lending institutions request "appraisals." While there is no commonly accepted format for anyone who requests an appraisal, but the insurance survey format fills this purpose quite well.

C&V Defined:

An insurance survey is a limited form of survey that is intended to assist insurance underwriters in making underwriting decisions. The survey has two primary purposes: (1) to identify the vessel, its equipment, condition and general value, and (2) to identify defects, damages or hazardous conditions that pose a potential threat to the safety of the vessel and its passengers, or any other such condition that is likely to result in loss or damage. Insurance surveys should never be provided to a client who is purchasing a vessel for the purpose of making a purchase decision.

A report format consisting of both a pre designed form and narrative description is recommended. It is fundamental to a proper survey report that the surveyor should clearly state in a narrative format or by an appropriate form all such areas which were inspected and which were not inspected. While underwriters don't particularly like forms, and often complain about them, forms serve a very important function for surveyors. First, the form serves as a guideline to insure that all major areas of concern are covered. Second, the form records necessary information and serves as verification that these major areas were inspected.

Insurance surveys are not intended to certify that a vessel is built, or conforms to, any standard or standards set by any official standards organization. Standards such as the ABYC Standards for Small Craft and NFPA 302 Pleasure and Commercial Motor Craft are voluntary standards. While most reputable builders make an effort to comply, others do not. Surveyors must use their own judgment when making reference or recommendations for compliance, based on the surveyor's perception of hazard.

It should be remembered that the surveyor's report is his work product. It is the one example that illustrates to the industry the degree of his professionalism and competence It is from his reports that his work will be judged. Survey reports are often seen by many people, not only in the present, but often far into the future. It reflects his competence and constitutes one of his best forms of advertising. Therefore, the surveyor should strive to produce a report that meets the highest professional standards. This guide is intended to assist the surveyor in achieving that goal.

Insurance surveys should contain the following information:

• A statement of the purpose of the survey
• Date and location of survey plus status of vessel either afloat or hauled
• Builder, model (if any), and year of construction completion
• Vessel type, such as flying bridge sport fisherman, open fisherman, aft cockpit sloop, center cockpit ketch, etceteras.
• Identifiers should include hull number, registration number and engine serial numbers
• Specifications should include principle dimensions, machinery parameters such as model number, horsepower, turbo charged, transmissions, etc., plus fuel capacities

A general statement describing the vessel, whether its production or custom built, major alterations, additions or refits, major builder add-ons such as bait & tackle centers, towers, custom tops, exterior seating arrangements or any other major features that significantly affect the value of the vessel.

Equipment inventories should include only items of significant value or aggregations of smaller items that add up to substantial value. The creation of long lists describing everything on the vessel should be avoided. Underwriters neither want nor appreciate this. Comments on the presence of fine arts, large amounts of personal effects, the presence of unusual items such as computers, costly decoration or any other items of significant value. This is useful to insurance companies in the event of claims, and to help assess value.

CATEGORIES TO BE CONSIDERED

Construction: A general statement describing the hull construction and superstructure is generally all that is necessary for most production built vessels, unless the nature of the construction or design is unusual or unique. It is important for underwriters to know if a vessel is built of exotic, unusual or experimental designs or materials, or whether it is an unusual or experimental design. It is generally not necessary to describe in great detail the scantlings of the hull such as dimensions and spacing of frames and stringers, etc. It is sufficient to state that the hull is lightly, moderately or heavily built without going into great detail, unless there is a real need to do so.

Cockpit Designs: Sport fishing vessels and other vessels with cockpits that are particularly low to the water line should be inspected for the potential of sinking the vessel should there be a significant change in trim, heavy rain storms or other adverse conditions.

Propulsion Machinery: Particularly for motor vessels, the propulsion machinery constitutes a major part of the vessel's value and therefore deserves careful attention by the surveyor.

• Model & serial numbers
• Engine hours or approximate age
• Overhaul dates if known
• Apparent condition of exhaust risers
• Whether exhaust risers are of adequate height to prevent backsurge
• Visual condition of exhaust piping and mufflers
• Fire protection of non water cooled exhaust systems
• Condition of belts, hoses and engine wiring
• Inspect connections of throttle and shift control cables
• Stuffing boxes tight or leaking
• Existence of significant fuel, oil or coolant leaks
• Presence of water or exhaust temperature alarms
• Presence of neutral safety switch (engine won't start in gear)
• Potential for carbon monoxide hazard to passengers from gas engines

Auxiliary Machinery & Generators:

• Generally same information as propulsion machinery
• Name, model and serial number if possible
• Carbon monoxide hazard with gas generators

Equipment that should be tested and proved operational:

• Bilge pumps, number and capacity
• Navigation lights & horn
• Steering system
• Engine controls

Fuel System: A General Description of the fuel tankage, fuel lines, fill system, valves and filters should be given either in narrative or a form. Fuel systems have the potential for fire, explosion and pollution hazards so that the integrity of these systems should be dealt with in detail.

Compliance with ABYC H-24 should be considered mandatory for gasoline systems.

Condition of gasoline fuel tanks, particularly foamed in place aluminum tanks, should be reported. If tanks are not accessible, that should be so stated in the report.

Electrical Systems: While it is not possible to survey an electrical system to a standard such as ABYC or NFPA-302, basic compliance of the fundamental system safety features of both AC and DC systems should be considered and referenced when possible. Reports should describe the basic system design and circuit protection. It is recommended that AC system polarity be checked.

Cooking Facility: Compliance with ABYC section A-1 should be considered mandatory for LPG systems and section A-22 for CNG systems. Section A-3 compliance is recommended for electric systems. The presence of flammable or unprotected materials around the stove should be reported.

Plumbing Systems: Should be inspected with a view toward the water tight integrity of all sea water systems. This means that materials should be highly corrosion resistant and systems designed in such a way as to avoid hazards for reverse siphoning, especially for such things as cockpit drains, bait and fish wells, shower and bilge pumps.

Type & quality of sea cocks, strainers and hoses on all through hull systems

Bilge pumps, bait wells, heads, shower pans and sumps should be checked for reverse siphoning potential.

Piping and hoses should be of good quality and be adequate supported, properly joined and free of dissimilar or highly corrosive materials such as iron, steel, aluminum and raw copper. All deficiencies should be reported.

Safety Equipment: It is mandatory that a vessel meet U.S.C.G. requirements for safety equipment as these are statutory requirements. The survey should contain a detailed itemization of the equipment, the dates of inspection or reinspection (such as for life rafts, fire equipment and emergency transmitters), and notation of whether vessel is in compliance.

Basic Vessel Design: Statements as to seaworthiness can only be made in the negative since seaworthiness is a relative term. The following are some relevant issues to be considered:

Is vessel suitable for the area where being used? Note any limitations or recommended restrictions on use. Examples would be inland houseboats near oceans, sailing vessels lacking adequate auxiliary power in areas of strong tides or currents, vessels with low power or poor maneuverability on swift flowing rivers.

Are decks safe with adequate hand railings or hand holds? Are there unsafe features that could cause bodily injury such as badly designed flying bridge ladders or lack of railings on an upper deck? Are the cockpit deck and drain scuppers properly designed and of sufficient height above water line to prevent inadvertent sinking, particularly outboards and other small craft with low, open cockpits?

Are doors, windows, hatches and portholes suitable for marine use? Do all openings have a provision for locking from the interior? Are locks of good quality or are they easily broken? This is some of the information that underwriters find useful for assessing risk.

General Considerations:

Reports should be prepared and written in such a way as to indicate that all basic systems either were or were not inspected. For example, when a gasoline fuel system is inspected for condition and leaks, the report should say so. Otherwise, the reader can rightly assume that the system wasn't checked if the report does not so indicate.

A good survey report is one that indicates that all systems of major importance were either inspected and the condition noted, or it indicates that the system, or parts thereof, were not accessible for inspection. The surveyor lets the reader know what he has done, or was not able to accomplish. It does not reflect poorly on the surveyor to state that something wasn't, or couldn't be inspected or tested. On the contrary, to do so is a sign of integrity and thoroughness in reporting.

Describing Conditions:

Because surveyors are dealing with the property of others, they have to be careful what they say and avoid injurious remarks or generally insult the vessel owner. There is a fine line to be walked between accurately portraying the condition of the vessel and describing things in such a way as to invite controversy. Remember the adage that one man's trash is another man's treasure.

If the surveyor has been attentive to detail, making diligent note of all substandard conditions, he won't find it necessary to make sweeping generalizations about the overall condition. The itemization of substandard conditions and defects will generally serve to size up the whole.

However, conditions such as high wear and tear, lack of maintenance, uncleanness, clutter and disorganization reflect more than just the value of the vessel. It may reflect the owner's state of mind and financial condition and have a direct bearing on risk assessment. Such conditions deserve comment, but should be made with discretion.

Example "The interior of a vessel shows heavy wear and tear, poor housekeeping and is generally dirty and unkempt with excessive accumulated unsecured clutter." Instead of using this description, state: "Interior shows above average wear and tear and requires improvements in housekeeping and removal of clutter and stowage of all loose items to ensure safety at sea." While not stating outright that the vessel is a terrible mess, it does allow the underwriter to read between the lines and form an accurate impression while reducing the risk of the surveyor insulting his client. After all, if the owner paid the surveyor, it is the owner who is the client.

Language & Terminology:

Consider that the end users of survey reports may not have a marine technical background. Survey reports should not be pedantic, but written in as common language as possible while maintaining professionalism and referring to appropriate marine terminology.

Avoid ambiguous words and phrases such as "proper," "good marine practice," "safe," "certified," "approved" and "qualified marine technician", without describing what these terms mean. Certified or approved by whom? Qualified by whom? Proper according to whom or what standard? If a particular standard must be met, describe or provide a copy of the relevant standard. Otherwise simply state, "repair or restore to original condition" since the prior condition will be obvious.

Reporting Style and Length:

Judging by the length and numerous pages of many reports, some surveyors apparently feel that the more pages a report contains, the more thorough the report will appear. Perhaps, but busy underwriters may have to review many reports every day. They will be more appreciative of the surveyor who understands what information is needed and is able to convey that with an economy of words and paper.

Long, flowery descriptions of the vessel, its systems and equipment should be avoided, particularly for production built boats, or boats built of conventional materials and design. Custom or foreign built boats which are likely to be unknown to the underwriter deserve additional description that should be brief and to the point.

The most important feature of the report is that it should be well organized and concise. Nearly all end users prefer letter size pages rather than legal size so that the report doesn't have to be folded to fit into a file. Report covers are not necessary and will be discarded when the report is placed in the underwriters file. It is perfectly acceptable, and probably preferable, for the surveyor to provide his report unbound.

Narrative reports should be categorical. Reports using a form to record vital information can omit detailed descriptions and go straight to describing in a narrative only that which isn't recorded on the form. Form design should be simple and easy to read. If it's more than three one-sided A-4 pages, its probably too long. Forms are only useful for recording general data and should not be used to describe deficiencies or condition. Comments on condition are best dealt with in the narrative.

Describe conditions and recommendations completely. Avoid the use of linguistic short hand or unnecessarily abbreviated descriptions. Pages should be numbered similar to "Page 1 of 7" so that end user will know whether all pages have been received.

Vessel Security:

The security of the dock or mooring location of a vessel is often of major importance to underwriters, although few actually request this information. However, many surveyors include information on the security of the marina or dock against wakes of passing vessels, tides, floods on rivers, storms, hurricanes and theft risks. Poorly constructed docks, inadequate mooring lines, pilings that are not adequate for the tidal range are among the things to be considered.

Theft risk is another important consideration. Interior security was already mentioned, but what about unsecured electronics, dinghies and outboard motors that could easily be stolen. These are all appropriate considerations for the insurance survey.

Summaries are generally not necessary but can be useful particularly for sizing up vessels that are in particularly good condition or are otherwise unique or out of the ordinary. The use of superlatives such as excellent, A-1, first class or Bristol condition should be avoided unless accompanied by a description or facts supporting such superlatives. There is no universal agreement on what these terms mean so that their use should be justified.

Surveyors should not make statements such as "this vessel is considered to be a good marine insurance risk." Surveyors are not underwriters and they have no basis for making such statements and should avoid doing so. A simple reference as to whether the vessel appears to be suitable for its intended use, and whether there are conditions which affect the safety of the vessel are sufficient.

References to condition can usually be effectively handled by making a statement about the general level of wear and tear - high, low, medium , or average, below or above average , are statements that allow the surveyor to paint the picture without resorting to harsh or insulting words. Example: The interior upholstery and carpet shows heavy wear. Or , exterior finish is oxidized and shows numerous abrasions and scratches . Conversely: Exterior finish shows a high gloss and is lacking in normal wear and tear.

Rating Systems - a few surveyors employ rating systems to evaluate the overall condition. Since there is no universally agreed standard, the use of such systems should be avoided. The interior, exterior and machinery will often be found to have different levels of maintenance and it is appropriate to summarize each category separately.

Avoid references to "cosmetic condition." There is no standard definition of what this means. Instead, refer directly to the individual condition of such things as gelcoat, paint, varnished woods, hardware, upholstery, carpet and the like.

Recommendations:

When receiving a survey report, most likely the first thing the underwriter will look at is the Recommendations section, for this is the section that tells him most about the condition and insurability of the vessel. The recommendations section should consist of statements of fact pertaining to any and all deficient, substandard or dangerous conditions as would affect the safety and seaworthiness of the vessel or its passengers. The recommendations should include a statement of generally how a deficient condition should be restored to acceptable condition.

The most common shortcoming found in surveys is the failure to describe a defect sufficiently. The surveyor should take good notes and describe the condition fully, including the potential results of failure to correct the condition.

Priority Recommendations: Underwriters often like surveyors to indicate and highlight any such defects that affect the immediate safety of the vessel. It is useful to them for surveyors to prioritize in terms of "immediate," 30, 60 or 90 day time frames to complete the correction, based on the surveyor's assessment of the hazard.

It is also acceptable for the surveyor to make recommendations or "suggestions" that are not mandatory. These can include such things as installing a bilge high water alarm or better locks on a door or hatch where there is no standard or mandate that the owner do so, but where the surveyor believes it is a reasonable precaution.

Photographs:

It is recommended that six (6) photographs of the vessel should be provided, unless there is a demonstrable need for more. These should include: exterior profile and frontal or stern view; one or two views of the interior; engine room/machinery space; plus photos of any major defects that seriously affect the safety of the vessel. When making recommendations that will involve a major expense to the owner, it is wise to have good photographic documentation.

These are the photographs that should be provided with the report. However, it is recommended that the surveyor document his file with photos of all significant defects in the event a dispute should arise.

Photos will be stored in an underwriting file and therefore should be mounted and captioned. Since the file will probably be hole punched and bound with a clip, allow a 3/4" margin on the left and top margins with two photos per page side.

Appraised Value:

Professional surveyors are qualified to appraise boats and yachts by virtue of the fact that they work with them on a daily basis. While insurance value and market value are not the same, the surveyor is not qualified to determine what amount is insurable, and therefore should assess the Fair Market Value only. There are frequently mitigating factors to market value, such as an owner investment in the vessel that far exceeds the market value. In this case, the surveyor should appraise the liquid value, while identifying the excess amount of any recent investment, and let the underwriter determine what additional amounts are insurable, if any.

A typical example would be where an owner invests $75,000 in customizing a twenty-four foot boat for which the market value would not be more than $30,000. In this case, the amount invested in the vessel should be indicated, but it should be up to the owner to provide substantiation of the actual costs. It is then up to the underwriter to determine how much of the additional investment that his company is willing to insure.

The basis for determining the Fair Market Value should be stated. Looking up a price in an appraisal guide does not constitute an appraisal. Insurance companies have appraisal books too. While insurance surveys are not formal appraisals, and while it is not necessary to detail the method of appraisal, the basis of the appraisal should be stated whether extrapolation from a guide only, actual market information, or both.

The best approach for determining Fair Market Value is to determine what similar or comparable vessels are selling for in a specific region. The most useful tools for doing this are newspapers, yacht brokers, magazine and specialty advertising publications, and even the Internet. Asking prices are then adjusted for wishful thinking, equipment and condition.

Limitations:

For the protection of both his client and the surveyor, the survey report should contain a Statement of Limitations . An insurance survey is a limited form of survey and those limitations should be spelled out. Use of the survey for sales or purchase evaluation should be disclaimed. That which was not considered, inspected and evaluated should be itemized, along with any and all systems that were not tested or operated. This is most easily accomplished in a standard clause that is added to every report along with pertinent modifications appropriate to each survey. The objective is to simply identify the considerations and parameters of the survey so that it is not left open to misinterpretation.

Conclusion:

Even though the survey may be commissioned and paid for by the vessel owner, an insurance or finance company is a direct beneficiary and end user. The surveyor has a fiduciary responsibility to anyone who makes use of his report, and must strive at all costs to accurately represent the condition of the vessel. Significant misrepresentation or omission relating to the condition or value of the vessel may result in financial loss to third parties for which the surveyor could be held liable. Surveys should be issued with this sobering fact in mind.

The surveyor's report is his work product that represents to the industry the degree of his professionalism and competence, and upon which his work will be judged. This guide is intended to assist the surveyor in achieving a quality and competent report. D.H. Pascoe & Company does not represent or warrant that these guidelines are accepted or approved by any insurance company or group of companies, any standards or surveyor society either collectively or individually.

Guide to Insurance Surveys and Reports is a copyrighted product of D.H. Pascoe & Company, Inc. and may not be reproduced or distributed in any manner without the express consent of the publisher.

(c)1997 D.H. Pascoe & Company, Inc.

David Pascoe - Biography

David Pascoe is a second generation marine surveyor in his family who began his surveying career at age 16 as an apprentice in 1965 as the era of wooden boats was drawing to a close.

Certified by the National Association of Marine Surveyors in 1972, he has conducted over 5,000 pre purchase surveys in addition to having conducted hundreds of boating accident investigations, including fires, sinkings, hull failures and machinery failure analysis.

Over forty years of knowledge and experience are brought to bear in following books. David Pascoe is the author of:

• " Mid Size Power Boats " (2003)
• " Buyers’ Guide to Outboard Boats " (2002)
• " Surveying Fiberglass Power Boats " (2001, 2nd Edition - 2005)
• " Marine Investigations " (2004).

In addition to readers in the United States, boaters and boat industry professionals worldwide from nearly 80 countries have purchased David Pascoe's books, since introduction of his first book in 2001.

In 2012, David Pascoe has retired from marine surveying business at age 65.

On November 23rd, 2018, David Pascoe has passed away at age 71.

Biography - Long version

Marine Survey Articles At A Glance

• Moisture Meters on Boat Hulls
• New Materials Again
• Avoiding the Blister Blues
• Hull Design Defects Part I
• Hull Design Defects Part II
• Surveying Storm Damaged Boats
• Surveying Boats with Grid Liners
• Surveyor's Guide to Insurance Surveys
• How to Survey A Wood Hull
• EL TORO Tragedy, The
• EL TORO Addendum
• EL TORO II: The NTSB Report
• From Other Categories
• Hi Tech Materials in Boat Building from Buying a Boat

• What is Pre-Purchase Survey?
• Business Practices and Client Relations
• Sound vs. Seaworthiness
• Hull and Its Structure
• Surveying the Hull
• Using Moisture Meters
• Stress Cracks & Surface Irregularities
• Deck & Superstructure
• Drive Train
• Gas Engines
• Fuel Systems
• Exhaust Systems
• Electrical Systems
• Plumbing Systems

• The Marine Investigator Read Online Full Chapter 1
• The Nature of Investigations
• The Nature of Evidence
• Marine Insurance and Issues of Law
• Bilge Pumps & Batteries
• Finding the Leak
• Sinking Due To Rain
• Fire Investigations
• Machinery Failure Analysis
• Fraud Investigations
• Interrogation Techniques
• Deposition & Court Testimony

Published by: D. H. Pascoe & Co., Inc. Articles, Images: Copyright © 1997 - 2018 David H. Pascoe All rights reserved. Articles, Images: Copyright © 2019-2022 Junko A. Pascoe All rights reserved. Web site design & developement: Copyright © 1997 - 2023 Junko A. Pascoe All rights reserved. Web site: Maintained by Junko A. Pascoe

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Sunken Superyacht Likely to Cost Insurers at Least $150 Million, Experts Say

Insurers of the Bayesian superyacht that sank this month, killing tech entrepreneur Mike Lynch and six others, could be on the hook for at least $150 million, according to the first estimates by industry experts.

The British-flagged 56-meter-long (184-foot-long) yacht, which the experts estimated cost around $40 million, capsized and went down on Aug. 19 within minutes of being hit by a pre-dawn storm while anchored off northern Sicily.

The superyacht’s hull was insured against physical damage by yacht insurance provider OMAC and a consortium of insurers including Travelers Cos. Inc., Navium Marine, and Convex, Reuters reported last week.

Yacht Insurer OMAC Is Hull Carrier for Yacht Sunk Off Sicily, Sources Say

Its protection and indemnity (P&I) insurance, which typically covers third-party liability claims including for environmental damage, injury and death, was provided by British Marine.

The hull was likely insured for around $40 million, while the P&I cover would be larger, insurance sources said.

“Our understanding is that the cost of the boat was between $40 and $50 million, so the limit of the hull & machinery policy was probably around those values,” said Marcos Alvarez, managing director, global financial institution ratings at Morningstar DBRS.

The P&I policy would likely be “several multiples” of the hull policy, or $200-300 million, Alvarez added, noting it would also likely cover liability payments even if the captain or crew are found to be negligent.

Prosecutors in the town of Termini Imerese, near Palermo, are investigating the captain and two other crew members. An investigation does not imply guilt or mean formal charges will follow. Prosecutors have said the probe would take time and require salvaging the wreck.

Oscar Seikaly, CEO of broker NSI Insurance Group, that provides yacht insurance, estimated the hull value at $40-70 million, but said P&I cover might not total more than $100 million.

P&I insurance would also cover recovery of the Bayesian, said Francesco Dubbioso, country manager for Italy for insurer Alta Signa Europe, who estimated the superyacht’s value at $30 million to $40 million.

Reuters is the first to report the potential insurance costs. OMAC, Travelers and Navium Marine did not immediately respond to Reuters’ for comment. Convex declined to comment.

The Bayesian disaster, which has puzzled experts who said the boat would have been built to withstand a severe storm, adds to recent woes for yacht insurers, who have faced a raft of hurricane losses in the past few years.

Premium rates have risen by four to five times in the past couple of years in parts of the U.S. and the Caribbean, and yacht insurers have cut the amount of cover they provide because of the risks, Seikaly said.

As a result, insurers have increased rates and re-evaluated their guidelines and risk appetite, according to industry experts.

As well as hurricanes, insured losses have mostly stemmed from severe storms, floods, and other weather events in North America, the Caribbean, and Europe, according to a report by broker Marsh.

Seikaly said four clients had last week been ready to buy boats but changed their minds because of the high cost of insurance.

Climate change was also likely to add to yacht insurers’ worries, Seikaly added, as it throws up more unexpected events.

“Whoever thought a storm in the Mediterranean in the month of August is going to sink a ship?”

(Additional reporting by Sinead Cruise; editing by Michelle Price and Sandra Maler)

Photograph: Italian Firefighters scuba divers bring ashore in a blue bag the body of one of the victims of the UK flag vessel Bayesian, on Wednesday, Aug. 21, 2024. (AP Photo/Salvatore Cavalli)

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Written By Noor Zainab Hussain

Written by carolyn cohn, interested in carriers .

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• Categories: International & Reinsurance News Topics: British Marine , Convex Group Ltd. , marine insurance , marine liability insurance , Navium Marine , NSI Insurance Group , OMAC , protection and indemnity (P&I) , superyacht insurance , The Travelers Cos. , yacht insurance
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Sunk Superyacht Likely to Cost Insurers at Least $150 Million, Experts Say

FILE PHOTO: Bayesian, a 56-meter-long sailboat, which later sank off the Sicilian capital Palermo, is seen in Santa Flavia, Italy August 18, 2024 in this picture obtained from social media. Baia Santa Nicolicchia/Fabio La Bianca/via REUTERS/File Photo

By Noor Zainab Hussain and Carolyn Cohn

LONDON (Reuters) - Insurers of the Bayesian superyacht that sank this month, killing tech entrepreneur Mike Lynch and six others, could be on the hook for at least $150 million, according to the first estimates by industry experts.

The British-flagged 56-metre-long (184-foot-long) yacht, which the experts estimated cost around $40 million, capsized and went down on Aug. 19 within minutes of being hit by a pre-dawn storm while anchored off northern Sicily.

The superyacht's hull was insured against physical damage by yacht insurance provider OMAC and a consortium of insurers including Travelers Companies Inc, Navium Marine and Convex, Reuters reported last week.

Its protection and indemnity (P&I) insurance, which typically covers third-party liability claims including for environmental damage, injury and death, was provided by British Marine.

The hull was likely insured for around $40 million, while the P&I cover would be larger, insurance sources said.

"Our understanding is that the cost of the boat was between $40 and $50 million, so the limit of the hull & machinery policy was probably around those values," said Marcos Alvarez, managing director, global financial institution ratings at Morningstar DBRS.

The P&I policy would likely be "several multiples" of the hull policy, or $200-300 million, Alvarez added, noting it would also likely cover liability payments even if the captain or crew are found to be negligent.

Prosecutors in the town of Termini Imerese, near Palermo, are investigating the captain and two other crew members. An investigation does not imply guilt or mean formal charges will follow. Prosecutors have said the probe would take time and require salvaging the wreck.

Oscar Seikaly, CEO of broker NSI Insurance Group, that provides yacht insurance, estimated the hull value at $40-70 million, but said P&I cover might not total more than $100 million.

P&I insurance would also cover recovery of the Bayesian, said Francesco Dubbioso, country manager for Italy for insurer Alta Signa Europe, who estimated the superyacht's value at $30 million to $40 million.

Reuters is the first to report the potential insurance costs. OMAC, Travelers and Navium Marine did not immediately respond to Reuters' for comment. Convex declined to comment.

The Bayesian disaster, which has puzzled experts who said the boat would have been built to withstand a severe storm, adds to recent woes for yacht insurers, who have faced a raft of hurricane losses in the past few years.

Premium rates have risen by four to five times in the past couple of years in parts of the U.S. and the Caribbean, and yacht insurers have cut the amount of cover they provide because of the risks, Seikaly said.

As a result, insurers have increased rates and re-evaluated their guidelines and risk appetite, according to industry experts.

As well as hurricanes, insured losses have mostly stemmed from severe storms, floods, and other weather events in North America, the Caribbean, and Europe, according to a report by broker Marsh.

Seikaly said four clients had last week been ready to buy boats but changed their minds because of the high cost of insurance.

Climate change was also likely to add to yacht insurers' worries, Seikaly added, as it throws up more unexpected events.

"Whoever thought a storm in the Mediterranean in the month of August is going to sink a ship?"

(Additional reporting by Sinead Cruise; editing by Michelle Price and Sandra Maler)

Copyright 2024 Thomson Reuters .

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