Is Buying a Boat Damaged by a Hurricane a Good Idea?

Modern and major storms are becoming more destructive. Even if boaters follow proper hurricane prepared boating practices, sometimes boats are damaged. There's often an opportunity for storm-damaged boats to be purchased. This can be dangerous. This is a gamble that some people might take without knowing the potential repercussions. More information is needed about buying damaged boats after a storm. The following are key factors to be aware of:

• Insurance claims following storm damage
• Benefits of purchasing a boat that has been damaged by a hurricane
• The disadvantages of purchasing a boat that has been damaged by a hurricane

David Wiggin is a friend and marine surveyor. He often works for insurance companies as a representative of clients after storms like those that hit the Gulf Coast. David was a former operations manager at a large boatyard when I first met him. David is a member the BoatUS Catastrophe Response Team or CAT. He has witnessed the worst of nature over the past two decades. After six and a quarter weeks of surveying the damage caused by Hurricane Sandy, David said that it was the worst he'd ever seen. He also stated that thousands of boats were destroyed.

Storm Damage Insurance Claims

It's worth learning about the insurance claims process after major storms before you buy a storm-damaged vessel. D. Scott Croft (AVP Public Relations at BoatUS) provided some insight.

Croft stated that "we estimate that over 65,000 boats, both insured as uninsured were damaged by Hurricane Sandy in New York and New Jersey." Croft said that a boat we have insurance on may end up under a pile of boats for which we don't have insurance. First, remove all boats from intersections or weeds. Then take them to the repair yards for evaluation. When salvaging boats, additional damage may occur.

Boats that are deemed "total losses" may still have value. It's just possible for the "agreed on value" in an insurance policy to be less than the cost of repairing the damage. Your boat is valued at $50,000. Your insurance policy has a $25,000 agreed value, and the damage is $35,000. For insurance purposes, the boat is considered totaled. However, the boat owner can buy the boat back at a negotiated cost (probably less than $15,000) and have it repaired. In some cases, you may own the boat that was damaged by a storm.

The boat is usually sold to the "liquidator" who pays the owner in full. When the boat is sold or parted out, the insurer receives a portion of the proceeds.

Benefits of buying a storm damaged boat

A boat that has been damaged and can be repaired can lead to a boat that is good, for a fraction of the market price. These boats can be purchased at a low price and, sometimes, with patience and skill, you may get a great deal.

It's not uncommon for a boat to be valued at a higher price than its agreed-upon insurance value. It's not uncommon for a boat worth $50,000 to be totaled, even though it may need $25,001 of repairs. This leaves plenty of financial flexibility for a buyer who is willing to repair the boat.

Advantages of buying a boat damaged in a hurricane

It is often difficult, or even impossible, to determine the extent of damage caused by storms. This is what makes it so frustrating for everyone involved. Although a boat may be recovered from the shore with visible and obvious exterior damage such as a damaged engine, it is likely that there was also damage to the engine if the boat was submerged before being tossed onto the beach.

Additionally, there is no Carfax equivalent in the boating industry at present, so you don't always know whether a boat has been damaged before. Sandy is an example of this: a surveyor identified one of the boats as having been damaged during Katrina. It is not clear how it reached the mid-Atlantic coastline from New Orleans. Do you really want to gamble on a boat that has been subject to significant storm damage twice?

You'll also have a limited time frame to pick up the boat from the liquidator and transport it to your storage or repair facility. This can quickly reduce the savings you expect from the "great deal".

What is the bottom line? The bottom line? There is a risk involved in buying a used boat . This is a higher risk with greater potential rewards.

Visit Our:

Inventory | Parts | Services | Contact Us