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What Type of Survey Do I Need?
Marine Surveys are performed for a number of reasons, and the procedures for each vary to best suit
your needs:
- Pre-Purchase Survey - A pre-purchase survey is a thorough and detailed inspection of a vessel,
before it is purchased and usually after a purchase and sales agreement has been signed. The survey
is performed to uncover any major defects or safety issues that need to be considered before buying
a vessel. The survey report is also used by finance and insurance underwriters to approve financing
and insurance for the buyer.
- Condition and Valuation Survey - A condition and valuation survey includes a physical inspection
of the vessel to be purchased and a detailed report. A (CVS) will give you an accurate picture of
the current condition and value of the vessel.
A CVS also satisfies and assures lenders and insurance companies that the vessel meets current safety
standards as set by the United States Coast Guard, NFPA and ABYC among others and the CVS also sets the
value to ensure that the vessel is adequately covered if damaged or lost.
- Insurance Survey - This inspection is performed so that the insurance company can determine
whether or not the vessel is an acceptable risk. They are interested in structural integrity and
safety for its intended use. Most insurance companies require a survey on older boats. They will
also want to know the vessel's fair market value.
- Appraisal Inspection - This inspection is performed to gather enough information to justify or
determine the fair market value of the vessel. This is normally needed for financing, estate
settlements, donations and legal cases.
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Why do I need a survey?
The primary benefit of a survey is the client having a written document describing condition and value
of the vessel at the time of survey. Often an insurance company or a financial institution will require
a survey. There are a variety of types of surveys. The following are the most common:
- Pre-Purchase: This involves the buyer and seller and requires a complete survey. The market value and condition are the key elements to this survey.
- Condition & Value: Most often this survey involves the insurance company and the owner. The important elements here are market value, replacement costs and overall condition.
- Financing: Prior to financing a vessel a financial institution will require a condition and value survey, centering on market value as it relates to condition and replacement costs.
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How much does a survey cost?
Costs relating to a survey vary. The type and purpose for a survey vary due to the amount of detail
required. The overall length and the complexity of the vessel's construction and systems are the basis
for the cost of the survey. The basic charge per foot is the industry standard. Costs relative to damage
appraisals, consulting and monitoring are based on an agreed upon rate.
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Do I need a complete survey for insurance purposes?
A complete survey is highly recommended in all cases. The boat should be surveyed out of the water as
well as in the water. Sea trials should also be performed. Basic consulting and monitoring can be
arranged on an agreed upon price. On completion of any work a written document will be presented to the
client.
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How Should I Prepare for a Marine Survey?
All surveys are done thoroughly and completely. Under no conditions will any survey be conducted on what
cannot be seen on your vessel. To Hasten the process, please arrange to have the following ready:
- Please let us know if you will be attending.
- Hauled vessel must be secured and blocked in an upright position.
- Please inform the yard the surveyor will be inspecting your vessel.
- Have all inspection panels and covers removed.
- Ensure all chain and anchors can be viewed easily. If possible spread them for inspection and inventory.
- Lift rugs, layout all pillows, cushions, PFS's.
- Drain bilges for viewing all pumps and through hull fittings.
- Have all necessary papers and previous inspections or maintenance records available. If possible have available all work receipts.
- Have ladders or scaffolding at vessel site.
- If sailing vessel, have all sales available for inspections and inventory.
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Am I allowed to attend the marine survey?
We strongly encourage that you attend the physical survey because it is a good opportunity to learn
about the vessel. Of course it is also very important that the number of people on board be limited so
we ask that you do not bring friends or family members. The vessel will already be full with the buyer,
seller, broker, captain and surveyor and combined with the open hatches and exposed wiring can make it
difficult for the surveyor to work and also create the potential for injury and liability.
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What is a Pre-purchase Condition and Value (C&V )Survey?
A pre-purchase C&V is the most comprehensive survey and strongly recommended when purchasing a new or
used vessel. It includes an in-depth examination of the vessel's structural integrity, electrical system,
electronics, propulsion system, fuel system, machinery, navigation, and other miscellaneous on board
systems, as well as an out of water inspection and sea trial. A written report provides detailed
information on the vessel as relates to the above and discrepancies or variations from American Boat And
Yacht Counsel (ABYC) and National Fire Prevention Association (NFPA) standards, as well as USCG
requirements and prudent seamanship. The report will also have a "Recommendations" section listing
maintenance and repair items that need to be addressed in order to bring the vessel up to standard.
The pre-purchase C&V will also provide you with an informed opinion on condition and fair market value
free from immediate financial or emotional considerations. Regardless your level of experience and
knowledge, you'll appreciate the usefulness of this unbiased second opinion, even if familiar with the
vessel's condition and value. Financial organizations and marine underwriters require this independent
evaluation from a surveyor who is not involved in the deal when deciding on the amount to lend or insure
(although their figures may be higher or lower than the survey valuation depending on past experience
and policies). A pre-purchase C&V will also help assess suitability and safety of the vessel as compared
with its intended use. The survey opinion is an important tool that, when supported with the detailed
personal observations provided in the report, should assist in deciding whether the vessel is suitable
for your needs. Insurance underwriters will also be concerned with safety recommendations in the survey,
since this will affect potential liability claims. Don't view a survey as unnecessary "red tape" forced
on you by an insurer or lender - a good survey will save you money.
A pre-purchase C&V survey will probably be the most comprehensive, overall inspection a vessel ever
receives. For a typical 30-foot production yacht the on site inspection will typically take a full day,
with research and the written portion of the survey taking another full day. Although thorough, a typical
pre-purchase C&V survey cannot be an exhaustive investigation of every detail of every system (a task
which could easily encompass days or even weeks). While many cosmetic and maintenance items are often
noted, a typical survey concentrates more so on issues affecting the safety or value of the vessel.
Areas of inspection include the vessel's topsides, rig and all normally accessible interior spaces.
Haul out includes an inspection of the hull and all underwater machinery (props, rudders, etc.).
Visual inspection of engines, generators, fluid levels, fuel, steering, electrical, sanitation and
other systems are conducted, as well as an examination of the vessel's papers, registration, hull number
and of course all safety equipment.
Items not normally included in a pre-purchase survey (unless prior arrangements have been made) include:
- Removal of screwed, nailed, or otherwise attached paneling, liners, carpeting, etc.
- Opening, pressure testing, or sampling tanks.
- Disassembly of engines, machinery, electronics, etc., or testing with specialized equipment.
- Destructive testing (drilling holes, removing paint or gel coat, etc.)
Sellers or brokers do not routinely allow any of the above items, although we may recommend disassembly
or additional testing based on our observations. If needed, these specialized services can be conducted
during the survey, however as with any destructive testing permission of the owner/seller is required
and each will be carried out by a qualified technician. We do attend and observe testing of this sort.
For pre-purchase surveys, we usually recommend an experienced mechanic perform an engine survey in
conjunction with our survey.
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What does the written portion of your C&V survey contain?
There is no standard, industry-wide format, however our survey reports contain a detailed description of the vessel,
its systems, suitability for its intended use, detailed comments on conditions affecting value, and
recommendations addressing safety issues, necessary repairs, and maintenance. An estimated fair market
value and replacement cost is also included, as are photographs of the vessel and any unusual features
or problems.
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Can a vessel "fail" its pre-purchase C&V survey?
All vessels will have items requiring attention, however in most cases these will not in themselves
preclude the sale. The buyer has the option of purchasing the vessel and making the changes or
recommendations, or renegotiating the selling price if warranted. In cases where the survey valuation is
less than the previously agreed selling price, options for the buyer include:
- Paying the original selling price, regardless of the survey evaluation. Such a decision is based
on how well the vessel meets your particular needs and whether the higher cost is justified by the
benefit or amount of pleasure it will provide.
- Re-negotiate the original selling price with the seller and broker.
- Refusing the vessel. Your sales contract should include language allowing you to decline the
vessel if the survey results are unsatisfactory to you.
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What is an "Insurance Survey"?
An Insurance Survey or Underwriter's Marine Risk Evaluation is designed to assist underwriters in
determining a vessel's insurability. The focus here is structural integrity, safety, and inspection of
systems installations as per NFPA and ABYC guidelines. Safety gear is inspected and noted for compliance
with USCG requirements and pertinent identification information is recorded for future reference,
valuation, and claims adjustment. When purchasing a new vessel, the pre-purchase C&V survey will
normally also serve to obtain insurance. Underwriters periodically require surveys of boats they insure,
typically every three to five years depending on the vessels age and hull material. An evaluation is
also normally required when a new policy is written, such as when changing insurance companies unless an
acceptable recent survey is available. In such cases, what is considered "recent" and "acceptable" may
vary between underwriters, meaning you must ask each what they currently will and won't accept. Some
underwriters may accept an in-water evaluation (i.e. no haul-out), which will eliminate the cost of the
haul-out. When contemplating a no-haul evaluation, be sure to ask your insurance agent or underwriter if
it is acceptable. The benefit of any survey or evaluation in which the vessel is not hauled out for a
bottom inspection is significantly reduced. AN UNDERWRITERS MARINE RISK EVALUATION IS LIMITED IN SCOPE
AND CANNOT BE USED AS A SUBSTITUTE FOR A CONDITION AND VALUE SURVEY. We do not conduct pre-purchased C&V
surveys unless the vessel is hauled for inspection.
Boating insurance can be divided into to two general categories, "Agreed value (or Yacht) insurance and
"Actual cash value" insurance, either of which can have certain requirements that may determine the type
of evaluation needed.
"Agreed value" insurance means the value for a total loss is agreed upon by you and the underwriter when
the policy is written, meaning you'll receive that amount (minus any deductibles) upon a total loss.
With "Actual cash value" insurance, the amount paid upon total loss is subject to both depreciation and
the vessel's condition at time of the loss. This is similar to auto insurance, in that an insurance
adjuster will be utilized to determine your vessel's worth.
As boat insurance is not regulated by state and federal agencies to the same extent as auto insurance,
there is significant variation in boat and yacht insurance policies. Compare quotes, read each policy
carefully, develop a good working relationship with the agent or company representative you'll be
dealing with, and don't be afraid to ask questions regarding the coverage afforded by your policy.
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What is an "Appraisal Inspection"?
An Appraisal Inspection is performed to determine the fair market value of the vessel for financing,
estate settlements, donations, and legal cases.
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What is a "Damage Inspection"?
A Damage Inspection is performed to assess the extent of damage, recommend repairs, estimate repair cost,
and probable cause if needed.
When filing a damage claim with your underwriter, remember the surveyor assigned by them will be
representing the insurance company's' interest, which may or may not be your best interests. You have
the right to hire your own surveyor to inspect damage and make recommendations as to repair methods and
cost estimates. Depending on the policy, your underwriter may even pay for this independent surveyor,
subject to your deductible and of course the validity of your claim. Ask your agent to verify your
coverage.
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How quickly will I receive the survey report?
Standard turnaround is five to seven working days after the inspection. It takes on average around five
days after the onboard inspection is completed to research valuation, write, and print the report.
This time is an integral part of the survey process and is important as well, and rushing may affect
overall quality.
Please let us know in advance if you need a "rush" job, which will most likely involve additional fees.
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Who gets the results of the Survey?
When purchasing a vessel, you commission the surveyor to do the pre-purchase survey. We work for you and
no one else! We have no affiliation with any other party involved in the sale and provide the results
only to you. We do not provide our estimated fair market value or any other information to broker,
seller, or any one else unless specifically authorized by you. In all cases survey results are provided
only to you, the customer, unless otherwise requested.
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Should I attend the pre-purchase condition and value survey?
Although you do not have to be present, we encourage buyers to attend the survey. The notes and
recommendations presented in the written report will have more meaning for you when present during the
actual inspection. It also affords us the opportunity to answer any questions you may have in person and
to point out minor observations that might not be significant enough to be included in the final report.
The owner, broker, or their representative may be present to operate the vessel or equipment, however we
will not discuss the survey or convey any findings to them - only to you.
That being said, it's best to refrain from bringing anyone who does not have a direct interest in the
purchase.
Boats are a lot of fun, however friends, relatives, small children, or pets can cause distractions.
Surveying is a very serious part of what is often a substantial investment - help us get the most out of
it for you.
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How about a sea trial?
You probably wouldn't buy a car without a test drive, so a sea trial is an excellent idea and highly
recommended. Most buyers will take a "test sail" with the owner or broker (normally prior to the survey)
to determine if the vessel's performance is in general satisfactory and warrants the additional expense
of a survey, however a sea trial provides the surveyor valuable insight on how a vessel and her systems
operate in the "real world." Many surveyors factor in a one hour sea trial into their prices. As it
normally takes longer to perform a thorough sea trial, you either pay for the additional time required
to do it right or receive a less than comprehensive evaluation. We can and will conduct a formal sea
trial if requested, however we do not arbitrarily charge you for one and our prices are reduced
accordingly. We feel you should be able to decide if you require a sea trial and if so want to ensure we
have the proper amount of time to provide you the best evaluation possible.
Items to consider if you'd like us to conduct a sea trial:
Like hot coffee and clumsy McDonalds customers, surveys and sea trials don't go together - meaning that
we cannot conduct them simultaneously. Both are important enough to deserve a surveyor's full, undivided
attention. Both can be conducted the same day, however the order should be survey first, sea trial
second. This allows the buyer to determine if any problems found during the survey preclude the need for
the added expense of a sea trial, and facilitates inspection of the engine and engine room (which will
likely be too hot to move around in freely for a number of hours after a sea trial). We ask that the
engines not be cranked prior to our arrival. Sea trials and surveys can be conducted on separate days
and often a sea trial can be conducted while on the trip to the yard for haul out or on the return trip,
at which time we can also check any items you may have noted from your "test sail". We do not operate
the vessel during the survey or sea trial. The owner, broker, or a hired captain will have to be present
to operate the vessel. We will need to give our full attention to inspecting the various equipment and
systems while underway, something which can't be properly done while captaining the vessel.
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How are rigging and sails inspected?
The rig is given a close visual inspection from deck level, which is common practice among surveyors
nationwide. For an additional fee inspection of the rig aloft can be included as part of the survey,
however it does involve additional time, difficulties, and prior arrangements. A thorough deck level
inspection is normally adequate to determine the vessel's overall condition and value, however there are
numerous cases (extended cruising, offshore passage, etc) in which you'll want a full inspection
performed by a qualified rigger. Some underwriters require an aloft inspection of the rig (particularly
when upgrading to a "blue water" type insurance) so be sure to ask what's required by your policy.
Sails are given a general inspection as found (i.e. bagged or furled), which is normally adequate for a
typical pre-purchase survey. Weather permitting, we may have the owner or broker hoist the main or
unfurl a jib, however in most cases we will recommend all sails be given a complete inspection by a
qualified sail maker (particularly when planning extended cruses or off shore passages).
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Broker or seller responsibilities?
Open all normally accessible compartments and spaces and ensure unobstructed access.
The vessel should be reasonably clean and all items not included in the sale should be removed.
Provide ship's papers or title and registration.
The seller, broker, or other representative of the seller will be expected to operate the vessel, engine,
or other equipment as required and to deliver the vessel to and from the yard for the haul out.
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What are your qualifications?
The owner, Karl W. Nickel, Captain Karl Nickel has been in the boating industry for over 30 years and
holds a Coast Guard License Master 50 gross tons. He is also a graduate of Chapmans School of Seamanship,
a member of Boat US Technical Exchange, completed training in marine surveying at the Chapman School in
Stuart, Florida and became a member of the Society of Accredited Marine Surveyors as a Surveyor Associate.
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Karl's Marine Survey, Inc.
123 Meadow Ln. Phila. Pa 19154
Office: (215) 280-1109
Fax: (215) 637-9490
eMail: KWNSkip@AOL.Com
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