Buying a Boat Part 7 - Insurance

Of all the tasks associated with this purchase insurance was the easiest.    It was easy because I'm a registered insurance broker who has specialized in yacht insurance for over 20 years.   Here are a few tips for  insuring your new boat so it goes just as smoothly for you.

Call Me 1-800-661-7211

Who do you call.  The insurance broker who handles your home and auto insurance has served you well  but he/she is not your best option for the boat.  As a boat insurance specialist I have  markets, programs and rates that other insurance brokers cannot access.  If you ever have a claim it also helps to have an insurance  broker who knows boats in your corner acting as an advocate.     No matter where you are in Canada your best start is calling me or one of my brokers at 1-800-661-7211.   Shameless self-promotion but it is good advice all the same.   If you don't call me then make sure you deal with an insurance broker who focuses on marine insurance.

When to consider insurance.  The minute your thoughts turn to "How am I going to pay for this boat" the next thought should be "How do I insure this asset."   A good yacht broker may prod you along the way about insurance and if you are financing the purchase then insurance will be mandatory to release funds.  The sooner you call me the better.

What kind of coverage do I need.  For a new boat don't settle for anything other than all risk, agreed value coverage.   There are less expensive options but if you have a claim in the next 10 years you will pay more in depreciation charges than you will save in premium over that time.  For boats over a certain age you may not be able to buy agreed value coverage but it is worth asking.

A horrible situation that you should consider

When to start coverage.   On the day you pay for the boat it should be insured in your name.  When money changes hands the previous owner's insurance or the dealers floor plan policy will no longer cover the boat you bought.    Don't make the mistake of assuming the previous owner's policy will protect you until you take possession.   Money is the trigger,  not possession of the boat.   If you purchase a new boat the dealer's insurance may provide coverage until you take possession but consider this scenario. Fire.  A fire at the dealer or yacht broker's yard  could destroy your boat and many others.   If the dealer then declares Bankruptcy, which is not unheard of in that scenario,  you could find yourself way down the list of unsecured creditors with no boat and no way to recover the money you paid.  A policy in your name protects you from that bankruptcy scenario. 

Automatic coverage.  If you have a yacht policy in force when you buy a new or replacement boat it may be  automatically covered for 15 days from the purchase date.  That is the case with my personal Skippers' Plan policy. This feature was added to protect people who buy boats when our office is closed.  Your policy may have special conditions or limits on automatic coverage so don't rely on this advice unless you know the policy wording.   The other consideration is if your boat is located in the navigation area defined in your policy.  If you live in Ontario and buy a boat in California the auto cover may not help you. 


Coverage during road transport.   Due to the miserable weather I chose to transport my Bavaria 38 from Cleveland to Ontario on a trailer. For this move  I chose Andrew's Trucking Ltd.  because  they are one of the  best in the business.   The transport companies will tell you they are insured but it is not a good idea to rely on their insurance.    The truckers  have insurance to protect themselves from damage caused by their negligence.  If an accident is caused by some other vehicle you could be out of luck unless you have coverage in your name.    Your personal insurance will also provide seamless coverage during handling, loading, transport and unloading.   More than a few  people may have custody of your boat  during a move but if you have your own policy it won't matter if the marina, the trucker or some other party damages your boat on the move from point A to point B.    You may have to pay a bit more for this coverage with some companies but get you own policy. 

Insurance tip for my Skippers' Plan clients : I have a list of Canadian boat haulers that I can recommend.  If you use one of them I can get transport coverage without charging an additional premium . 

Fortunately there is no claim component to the story of my Bavaria 38 insurance.  The marina in Cleveland did a good job unstepping the mast and loading the boat.   Then Andrew's Trucking secured the load properly brought her home without a scratch.  Once in Ontario it was safely unloaded by Bristol Marine.  So far so good.

My story pauses at this point as I work to get her commissioned.    There will be more to follow in the blog about commissioning but that may take some time.  Mike at The Rigging Shoppe will have to wait a bit longer for this report.    Before that can happens  my wife, Erica,  will have her say so expect to see a guest blogger very soon.  

I will also leave you a tidbit about an upcoming post. The topic will discuss the most difficult, time consuming and nerve-wracking part of this purchase so far.  Choosing  a new name for the boat.    I found naming my children much easier.   I welcome your suggestions and will publically thank anyone who suggests a name  that everyone in the family will support.   

Next Up: The Spousal version of events.

Buying a Boat Part 6 - Yacht Brokers - the boat buyers best friend

In my first blog  about buying a boat I mentioned how  this deal was going to be more complex than my previous boat purchases.   With a cross border deal involving a repossessed boat there were a bunch of unknowns and I had a number of concerns like:

1. Information about the boat 
2. How to manage negotiations in a cross border deal 
3. Title search on a repossessed boat
4. Currency  fluctuations
5. Transferring funds to close the deal
6. Ontario retail sales tax
7. Remitting duty for a non NAFTA boat
8. Paperwork at the border and working with a  customs broker
9. Transporting the boat from Cleveland to Ontario
10. Sourcing parts for a boat built in German

All of these issues were handled seamlessly by my yacht broker.   When choosing a yacht broker I recommend   dealing with  an experienced  professional who lives by a professional code of ethics.     This means choosing a  Certified Professional Yacht Broker (CPYB).

My CPYB is Pat Sturgeon and his company is  Pat Sturgeon Yachts.    Pat and I have been boat show neighbours, done seminars  together, worked on industry committees, shared a drink or two and supported each other in business for over 20 years.   I consider Pat a friend but this was the first time I have relied on his professional services as a client.   I can't say enough good things about Pat and he exceeded my expectations at every opportunity.  

The main point I want to convey about a professional yacht broker like Pat is that he does a lot more  than just locate and sell you a boat.    In my case he removed all the complexity so the purchase was simple, seamless and fun.   That is how it should be for everyone buying a boat.

My professional yacht broker did a lot more  than just locate a boat and sell it...

If you have been clicking through internet listing and want to purchase a boat you should  call a yacht broker.   Finding the boat is just one step in the process.   It is all the other things yacht brokers  do that may make the difference between a good deal or an expensive mistake.  

As an added bonus  the buyer can access all of  this professional service and advice without any additional expense.   In most situations the yacht broker's commission is paid by the seller.    That is not why you should use a yacht broker but just know that cost is not going to be a factor.   A good yacht broker is looking to build a lifelong relationship with their clients.

**Full disclosure** - I am not being paid by or receiving compensation of any type from Pat Sturgeon Yachts or CPYB for this blog.    Pat doesn't even know I'm writing about my boat purchase.  I'm sharing this because it was such a positive experience want  to share my experience with others who may be considering a boat and deciding whether to use a yacht broker.   

Next Instalment - Insurance your new boat (you didn't think I would  skip that part did you?)

Buying Boat- Part 5 - The Surveyor

Every day I pass along the news to my clients that the insurance company requires a marine survey. The reaction varies from willing acceptance to visceral anger.  I suppose this is the same way many view their annual physical exam.   Nobody really wants to see the doctor  but you know you should do it.   The same thing applies to the marine survey.   The challenge is finding a good surveyor.  Never have a survey done by a surveyor recommended by the seller and I thought it would be wise to get somebody from outside the Cleveland area for my boat. 

I recommend many surveyors to prospective buyers but I chose Barry Goodyear of RaKon Marine Surveys.   We work closely at boat shows giving advice to first time buyers and that that has helped build a trust and rapport.   Trust is the very basis of the surveyor-buyer relationship so make sure that exists before you move forward.   Trust in their abilities but verify when possible.  A good surveyor will also co-ordinate engine tests, and oil analysis when requested.  This proved to be very important to my purchase even tough the boat was less than 10 years old.    The oil tests established   the previous owners had not adhered to manufacturer recommended maintenance so there could be a big problem with the saildrive.  This is not something I would have expected to see. 

There is a lot of preparation and planning that goes into the survey.   To get it done properly it can't be rushed and you also have to wait for the right weather conditions.

The details of Barry's report and the condition of the 2005 Bavaria 38 are not important to this story. What is important is that the survey brought the deal back to a rational discussion and removed all of the emotion.  Finally I could negotiate based on hard facts.    She was scored a  9 out of 10 but there were a few areas of concern.  Not enough concern to scuttle the deal but I had to do more research on repairing the saildrive and that could affect the closing price.

Next Up : The Yacht broker

Buying a Boat - part 4. The inspection

Without the sage advice and counsel of my trusted yacht broker I would never have made the trip to Cleveland.  I will elaborate more about the yacht broker in a later post but I was only in Ohio because I trusted his advice and opinion about the boat.

Cleveland is not the best destination city but we weren't there for nightlife .    My  potential future boat was nestled in a fenced compound in a less than desirable neighbourhood just outside the downtown core.   After overcoming the previous day's blizzard the plan was to get in, complete the mission and get out like we were a Special Ops team on a life or death assignment.  I agree I'm being overly dramatic but that was how it went down.  It wasn't life or death but even Navy SEALS don't have to deal with hungry, tired kids  fatigued from too many miles in the car and too many movies on a small screen.  It wasn't going to be pretty but it had to get done.  

Six hours of driving for a 1 hour  inspection.  This was like some kind of crazy speed dating.  Yachtworld listings are supposed to make the boat look as nice as possible but you never know until you walk the deck.   After seeing the boat I saw the good and the bad and I knew this much, I wanted a second date.

We then hit the downtown core of Cleveland for some food before hitting the road.  At the restaurant we were already discussing names for our new boat.  The deal wasn't closed but it was now "our boat".    Just a couple more steps along the road to make this boat show dream into a reality.  

Next Up  : Calling In the Surveyor .  

   

Buying a Boat Part 3 - Trial by Snow Storm

Who goes to see a  Boat when it looks like this outside?

March break seemed like a good time to go see the boat in Cleveland.  It wasn't my first choice for a March break vacation but it was the only chance to see the boat.  It would be a lot of driving for the kids but when you have a Honda Odyssey with a DVD player anything is possible.  

A change in the weather turned this plan into a really bad idea.  By the time we drove to Burlington  in the blizzard my knuckles were white.   It was then I realized emotion had trumped  reason as we drove in the one of the season's worst storms  to see a boat.    We rationalized that  reaching the destination of Niagara Falls was just as far as turning back to Toronto.  For the record it was all my wife's idea.  But really this was a good sign because now I knew her heart was in it too.  The kids were just along for the ride but they had lots of DVDs so it was quiet in the back seat.

Three hours after departing Toronto we arrived safely at Niagara Falls.  Tomorrow it's onward to Cleveland and the weather is looking much nicer - but first a few cocktails and a good night's sleep in Niagara Falls.   

Buying a Boat - Part 2 - Inspiration, Intervention, Motivation, Acceptance & Spouse Approval

Inspiration, Intervention, Motivation, Acceptance,  Spouse Approval -The  Five stages of boat buying

Working at boat shows over the last two decades always included a little shopping during the quiet times.  It has been both fun and expensive but never too crazy.    Occasionally  I meet people at  shows who get caught up in the emotion  of buying a boat but this has never happened to me.   This year was different and my heart has started to rule over my head as far as boats are concerned. 

Inspiration - At the 2014 Toronto International Boat Show my brother took a break from the booth and  returned  holding a bill of sale for a new Catalina 315.  This is a very nice boat and I'm looking forward to sailing it when summer arrives.   Later in the week I wandered around the show with my wife, Erica,  and the kids.  We liked Catalina 315 but we all agreed the Hanse 415 was our "Best in Show".   The kids will likely attend university at some point  so financially our dream of a new Hanse was not going to be a reality this year.   When I showed everyone  a more affordable (but not so comfortable )  J70 sport boat I was shot down in flames.  It seemed to me that a  cruising boat was a GO, a sport boat was a NO.

Intervention -  A few weeks later at the Sail Canada Rolex Awards I was fortunate to have the company of a friend from Nova Scotia.   I shared my experience from the boat show and his response was immediate.  "Forget the Hanse, there is a nice Bavaria 38 Cruiser  in Cleveland that is the perfect boat  and you could get it for a great price."   My East Coast buddy set the hook  that night.  When we met again after the Halifax Boat Show and he worked it some more.  But by that time I had viewed the Yachtworld listing dozens of times and was a quite smitten.

Motivation - Sadly, I have attended far too many funerals of great men in the last year.  Gary Poole,   Bob Eaton, Hans Fogh and Larry Later.   I have also seen too many  friends battling all types of  illness.  Our short time on this earth is precious and I intend to live it to the fullest while I'm still able.   With my daughter turning 12 and a son turning 10  the timing is perfect  for a family boat.  A place for us to grow together in adventure and to introduce a new world that is fun, challenging, and rewarding.   A place to build a lifetime of memories together.

Acceptance - This is just a small piece of the puzzle but a cruising boat is a done deal as far as I'm concerned.  I accept that this is the proper course and   I'm  committed to buying a boat.

Smiling wife avatar - not  Erica

Spouse Approval - The buck stops here.  If you do not have a meaningful value proposition, if the finances aren't in order,  if it doesn't engage the family,  if it is just about YOU - then this is where the boat buying story ends .

Fortunately for me things were just getting  started in earnest.

I Bought a Sailboat. Sounds Simple Doesn't It?

Part 1 - Buying a Boat.

It has been about 20 years since I bought a boat.  That deal was done in 30 minutes with a handshake and cheque.  I knew the boat and had raced against her many times.  I knew the  owner and there was an unspoken trust that a fair price was paid for a good boat and nobody was taking a risk.   No survey, no certified cheque, no lawyers, no brokers and no third parties in the deal.  Simple.   That boat has been fun, exciting, challenging and rewarding.  It has paid dividends a 100 times over but most importantly the sailors I competed against became an  important part of my life.  Competitors, mentors, business colleagues,  and most importantly good and trusted friends.  I also met my wife of 15 years through the Thunderbird class but that is for another time - maybe.

Now with a family  of 4,  my priorities have shifted and I recently purchased a new boat for cruising.  The process was completely different from my earlier experience.     I fell in love with  a repossessed boat, in another country (USA) that was not build in a NAFTA country.   Having just returned from the marina where it was delivered tonight I finally feel at peace with my decisions.    Safely landed in Canada with all legal obligations met I can say I was not always certain I would get to this point as pleased as I am today.

If you are thinking of buying a boat in the US you will want to follow along as I share the story of this deal in bite size instalments.   

What is your Most memorable Boating Experience?

If you love boating then  there are moments in time  that mark the start of the love affair.  I consider myself fortunate to have been born into a boating family so my boating memories are from my childhood.   I have a lifetime of wonderful boating experiences but  a few really stand out.

When I was a boy we would take trips to the Toronto Islands aboard my grandfather's Gordon Boatworks 32 ft Commuter .  The boat's name was "Skippin" - short form for Skippers Insurance.   We would start out from an old boat yard behind Tip Top Tailors and enter the inner harbour on an epic journey (or so it seemed to me) to for a picnic on the island.   It was a strange new world of ferries,  freighters, and other pleasure boats.  I remember thinking my grandfather was something special as he navigated through the harbour signalling other boats with his horn and making calls on the VHF.   This was when boating became part of my DNA and I have never strayed very far from the water ever since.

 Those early days on the Inner harbour set the hook but I swallowed it whole once I was Captain of my own vessel at 10 years of age.  She was a patched up 8ft fibreglass tender powered by a lovely old Johnson Seahorse 3 hp outboard.  This was my first memory of independence and freedom on Georgian Bay.     My freedom was actually limited to a 300 ft radius from the watchful eye of my father but it sure felt like freedom at the time.   I have sailed many finer boats in my life but  no other boating experience compares.  

Have you ever thought back about your first boating experience?  Give it a try and I would love to hear what comes to mind.

Largest vessel ever launched.

Prelude is a 'floating liquefied natural gas facility owned  Shell.  It is is 488 metres long and 74 metres wide making it the biggest ship in the world.  By comparison, the Empire State Building, which was the world's tallest structure for almost 40 years, is 443 metres high.  It is hard to believe that even larger vessels are being designed today.

We're Moving - Sorry for any Inconvenience

On Friday April 4 our marine department will be shut down as we move to our new office at 80 Richmond Street West (near Bay Street) in Toronto.  Our IT staff are working diligently to ensure we have phones and computers for 9AM  Monday April 7.   There may be a few glitches or delays with the phones so let me   apologize in advance for any inconvenience. 

Our new mailing address is 80 Richmond Street West, Suite 700, Toronto ON  M5H 2A4 .   Policy Holders will receive a mailer soon with all our new phone numbers but they will be redirected in the interim.    If you have any urgent matters and cannot reach us by telephone please email me at andrew.robertson@cgbgroup.com  and it will come to my Blackberry. 

Farewell Markham, it was fun while it lasted but now we are Downtown bound.