All Boat & Yacht Inspections, LLC

ABYI Services

Types of Surveys

Pre-purchase | Insurance | Appraisal | Damage

A Pre-purchase condition and valuation (C&V) survey is intended to provide the buyer with the detailed information that they need to make an informed purchase decision. The survey report is often used as a tool to negotiate specific repairs with the seller and/or a change in the purchase price. A Pre-purchase C&V survey report is also used to satisfy bank and insurance company survey requirements. The buyer is strongly encouraged to attend the survey. At the end of the survey, a debrief is conducted with the buyer to go over the survey findings and to answer any questions while still on the vessel.

A Pre-purchase survey is a very thorough inspection of the hull and deck structures; equipment and machinery; as well as fuel, plumbing and electrical systems. The survey typically takes five to eight hours for an average 30’ – 45’ vessel. This includes inspection of the vessel both out of the water and in the water, plus sea trial, on the same day. Operating systems and equipment are tested to determine if they operate in a normal manner, including propulsion engines, AC generator, air conditioning, galley equipment, electronics, etc. The hull and decks are inspected using hammer percussion soundings and moisture meters to check for delamination of fiberglass composite laminates, relative moisture in a hull bottom, and elevated moisture in structural core materials. The internal structures are visually inspected for any signs of deterioration or failure.

The engines are tested during a sea trial to check their wide open throttle RPM ranges, cooling system temperatures and alternator outputs. Test equipment is used to check engine RPMs, temperature and voltage, where accessible. Oil pressure is monitored using the vessel’s gauges. Visual inspection is used to determine fluid levels, presence of leaks, crankcase blow-by, excess vibration, and exhaust smoke.

The mast and rigging of sailboats are typically inspected from deck level only using binoculars. However, on sailboats 32’ and over a rigging aloft inspection may be conducted if the halyards and deck hardware are suitable, and there are qualified people at deck level. Sails are hoisted and/or unfurled during sea trial. Sails found aboard in bags may be inspected unfolded on land, where conditions are suitable.

A Pre-purchase survey does not include: compression testing of machinery; oil analysis; internal inspection or pressure testing of tanks; destructive analysis of hull and deck structures; or invasive inspection of hidden spaces or inaccessible areas. Hardware and fastenings are not removed for evaluation. Navigation instruments are not tested for accuracy. Limitations of inspection sometimes include an inability to test equipment and systems that have been decommissioned for winter storage. Boats blocked ashore in the back of a boat yard for winter storage sometimes cannot be launched for sea trial.

It is always the option of the buyer to have the engines and AC generator further evaluated by a mechanic that is factory certified for that specific equipment. It is somewhat common and strongly recommended that vessels such as motor yachts, sportfish, and trawlers with large diesel engines have a separate mechanical survey due to the potential high cost of repair of hidden engine problems.

Insurance C&V Survey

An Insurance Condition and Valuation (C&V) survey report is typically used for insurance company requirements, but may also be used to satisfy bank financing requirements. This type of survey is a limited inspection intended to identify any readily detectable defects or conditions that may make the vessel a greater risk when compared to other vessels of similar size, class and age. Essentially, insurance companies are interested in data about the vessel that could cause them to suffer financial loss. So the main focus of the inspection is on things that could cause the vessel to catch fire, blow-up, sink, etc. The information contained in an insurance C&V survey report is not sufficient to make an informed decision regarding the purchase of the vessel.

An insurance survey is mostly a visual inspection, with operational testing limited mainly to navigation lights, horns, bilge pumps, and possibly electronics. Mechanical, fuel and electrical systems are inspected for condition and compliance with current standards, where accessible for inspection. Hammer percussion soundings and moisture meter analysis of the hull and deck structures are not typically part of an insurance survey. The mast and rigging of sailboats are inspected from the deck level only. Sails stored on booms and roller furling gear are not hoisted or unfurled for inspection, and sails stored in bags are inventoried but not removed from their bags.

An insurance survey typically takes between two and four hours to complete. The presence of the owner is not required but is encouraged. Whether the vessel is inspected in the water or out of the water is at the discretion of the insurance underwriter. Vessel’s over 20 years old are often required to have an out-of-water survey.

The vessel’s fair market value is developed using assumptions about the condition and serviceability of the engines and equipment. If the survey is conducted with the vessel in the water, assumptions are also made about the condition of the hull bottom, through hull fittings, running gear, keel, etc.

Appraisal Survey

An appraisal survey may be conducted for a number of reasons, including:

Estate settlement
Divorce settlement
Donation to a charity (tax purposes)

An appraisal survey inspection is similar to an insurance condition and valuation survey, but with an abbreviated report. The vessel’s condition needs to be clearly defined to provide an accurate valuation. The report will identify valuation methodology, assumptions as to the operating condition of machinery and other systems, as well as limitations of inspection.

For charitable donations, the IRS requires boats with a value of $5,000 or more to be appraised by a qualified professional. This is typically done by a marine surveyor. The surveyor will fill out the appropriate sections of IRS Form 8283 “Noncash Charitable Contributions” and provide a signed original along with the appraisal survey report.

The IRS rules for donations of boats, cars, RVs, etc. changed in 2006. Anybody contemplating donation of a boat to a charity should fully investigate all of the benefits and possible complications. This should include consultation with a CPA or tax attorney.

Damage Surveys

Boats get damaged. That’s why you should have insurance. Surveyors are typically hired by the insurance company to investigate claims made by their insureds or by claimants. Sometimes a surveyor is hired by a boat owner to investigate unusual deterioration or damage, especially on newer boats. Some of the typical types of damage investigations include:

Sinking
Collision
Groundings
Striking submerged objects
Mechanical problems (caused by external source)
Accidents involving boats on trailers
Leaking fuel tanks
Fire/Arson
Pollution mitigation
Severe weather

A damage survey report typically includes:

Reported circumstances of the problem or loss, including statements from owners, operators and witnesses
Identification of the vessel(s) and description of its overall condition
Description of damages associated with the loss
Opinion as to the cause of loss
Review of repair estimates prepared by marinas or other repair shops for completeness and reasonableness. Negotiate revised estimates, when appropriate.
If no estimates are available or obtainable, preparation of a Damage Appraisal
Pre-loss and post-loss valuation of the vessel, where applicable

The surveyor will identify and recommend third party experts which may be needed to further evaluate damage and help define suitable repairs, especially for:

Fire investigations
Complicated mechanical problems
Large areas of hull damage
Electrical problems in complex systems