With modern and major storms becoming more destructive, even when boaters follow proper hurricane preparation boats get damaged and after a big weather event there’s often an opportunity to buy storm-damaged boats. However, this can be a gamble. A gamble which some people may be taking without understanding the possible repercussions. So, more information seems to be needed on buying storm-damaged boats. Key factors to consider include:
- Insurance claims after storm damage
- Advantages of buying a boat damaged in a hurricane
- Disadvantages of buying a boat damaged in a hurricane
I contacted a marine surveyor acquaintance of mine, David Wiggin, who often ends up working for insurance companies on behalf of their clients in the aftermath of such storms. I met David years ago when I was the operations manager at a large boatyard. As a member of BoatUS’s Catastrophe response team or CAT, David has seen the worst that nature can dish out over the past 20 years. After returning from six and a half weeks of surveying damage in Hurricane Sandy, he said simply, “It was the worst damage I’ve ever seen, with thousands of boats a total loss.”
Insurance Claims After Storm Damage
Before you consider buying a storm-damaged boat, it’s worth knowing something about how insurance claims processes work after big weather events. I spoke to BoatUS’s D. Scott Croft, AVP of Public Relations, for some perspective.
“We estimate that there were over 65,000 boats total, both insured and uninsured, damaged in New York and New Jersey alone from Hurricane Sandy,” said Croft. “In a storm like this, a boat we insured may be under a pile of boats we don’t have policies for. Job one is to get all the boats out of the weeds or intersections and off to the repair yards to be evaluated. Often additional damage can happen when you’re salvaging a boat.”
Boats deemed a “total loss” may still be worth something; it’s just that the “agreed-on value” listed in the insurance policy is less than the estimate to repair the damage. For example your boat is worth $50,000, your insurance coverage has an agreed value of $25,000, and the damage is estimated at $35,000. The boat is totaled for insurance purposes, but, in this case, the boat owner may buy back the boat at a negotiated price (presumably less than $15,000 in this instance) and have it repaired themselves. So, in some cases, the storm-damaged boat you buy may be your own.
In most cases, however, the owner is paid off completely and the boat gets assigned to a “liquidator.” Boat liquidators are something like a consignment shop. The insurer gets a percentage of the money to defray their costs when the boat is finally sold or parted-out.
Advantages of Buying a Storm Damaged Boat
Much like buying a house that is a fixer-upper, buying a boat with known damage and repairing it can result in owning a good boat, at below-market costs. You can often buy these boats for a very low cost and sometimes, if you are capable and patient, get a fabulous deal.
There’s often a big gap between the agreed-on insurance policy value of a boat and it’s real-world value on the used boat market. So, it’s not at all unusual for that boat worth $50,000 to end up being totaled even though the damage may only be $25,001 in repairs. That leaves a lot of financial maneuvering room for a savvy buyer who’s willing to do some repair work.
Disadvantages of Buying a Boat Damaged in a Hurricane
The hardest part for all concerned with storm-damaged boats is that determining the scope of damage is difficult or sometimes impossible. A boat recovered from land may have visible and obvious exterior damage, for example, but if the engine was submerged prior to the boat being tossed ashore there’s doubtlessly damage that’s not so easy to see, too.
Plus, there is no equivalent of a Carfax in the boating industry at this time, meaning that you don’t always know if you’re buying a boat that had been damaged previously. A case in point from Sandy: one of the boats was identified by a surveyor as having been previously damaged in Katrina. How it got to the mid-Atlantic coast from New Orleans is still a mystery. Would you really want to roll the dice on a boat that’s been through significant storm damage not once, but twice?
And on top of all that, when bought at auction from a liquidator you’ll have a short timeframe to pick the boat up and transport it to your own storage or repair facility. If you have to hire a hauler and rent space, this can quickly eat into the savings you expected from the “great deal.”
The bottom line? As we stated up front, buying a boat damaged in a hurricane is a gamble. In fact, any time you buy a used boat there’s a bit of a gamble involved. But in this case it’s a bigger risk, with bigger potential rewards. If you think it’s the right move for you, check out How to Buy Boats Damaged in a Hurricane for details on how to make it happen.
Editor’s note: this article was originally part of a series published in January of 2013 which was combined and updated in January of 2023.
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