Insurance Risk Surveys and Evaluations
Marine insurers are increasingly requesting boat owners to provide an insurance survey or insurance risk evaluation. In this article, we will provide you with some important information on why insurers are requesting these reports and what this may mean for you and your boat.
Insurance Survey Types
There are three common types of insurance risk evaluations for boats, these consist of vessel condition reports, vessel risk evaluations and insurance survey reports. These are further detailed as follows:
- Boat Condition Report: A general condition report for a vessel or boat and usually less formal than the other reports. The purpose of a boat condition report is to better understand the general condition of a particular vessel, some insurers may accept these reports for insurance purposes for trailer boats, however, some may not.
- Insurance Risk Evaluation: These reports are generally completed in a pre-defined checklist which is provided by your insurer. The checklist requires the inspector to check, comment and report on the condition of essential areas of a particular vessel or boat. Recommendations are provided where defects are found. For trailer vessels, your local shipwright or marine technician may be able to complete this report for you, however, for larger vessels, a marine surveyor is required.
- Insurance Survey Reports: Insurance surveys can be completed on every vessel type, however, are more suitable for larger vessels 25ft – 80ft+. The scope of the insurance inspection is at the discretion of the surveyor and typically goes beyond the above reports and not limited to a pre-defined checklist. This allows the surveyor to provide a more comprehensive report and comment on all areas of the vessel providing more detail and information to the boat owner. Such a report is also useful for completing and planning ongoing maintenance for the vessel. Insurance Surveys take more time in both inspection and reporting, thus would usually result in a higher fee.
It is worth noting, if you have just purchased a vessel and had a pre-purchase survey completed which is always a good idea, these surveys can also serve the purpose of an insurance survey saving you money on requiring both.
Although the money outlay may place some pressure on the purse strings, it will also give you peace of mind that your vessel is in a more seaworthy state for you and your family to use. - Josh Deacon
Why Is an Insurance Risk Survey Required?
Insurers are increasingly requesting risk evaluations for vessels, typically these are required once a vessel reaches 10 years of age and then every 5 years going forward. This assists the insurer in identifying the condition of your vessel and determining the risk of damage or loss occurring.
Boats are relatively high in maintenance due to the environment in which they operate and require regular maintenance and service to operate safely. If such maintenance is neglected, the risk of a vessel submersion, fire or damage increases not to mention the risk to people aboard. The purpose of an insurance risk report is to assist in identifying that such risks and areas of neglected maintenance or defect are rectified or prevented.
How is the boat inspected?
A boat should always be inspected out of the water, for boats permanently berthed in the water this means a haul-out is required. It is a good idea, to align this with hull maintenance if possible such as an antifoul to reduce out of pocket expenses.
The main areas of the vessel are inspected but not limited to the hull bottom, topsides, deck, hull structure, propulsion, engine, external mechanical, electrical. Inspection is usually visual only without the removal of fixed parts, panels, or inaccessible areas.
Who Can Provide an Insurance Risk Report?
Your insurance company may have a list of businesses in your state or area that can provide boat insurance report. A marine surveyor can provide the report you require, in some cases for trailer boats your local boat builder or technician may suffice. It is important to make sure that the provider you choose can meet the requirements of your insurer, for example, the report provided will be accepted by the insurer and the inspector meets the qualifications. Otherwise, you may be just wasting your money.
What’s The Cost?
The cost of inspection and report is generally dependant on the boat size and location, for a typical 30ft vessel, the cost for such a survey would be around $600.00 AUD +/- for larger and smaller vessels.
In summary, an insurance risk inspection and report is a good thing for all parties. It will assist the boat owner and insurer that your vessel is in good, well-maintained order. On the other hand, the inspector may find several defects that require rectification and money, although the money outlay may place some pressure on the purse strings, it will also give you peace of mind that your vessel is in a more seaworthy state for you and your family to use.