Condition & Valuation Survey (CVS) or Insurance 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.
However, this type of survey, while considerably less expensive than a Pre-Purchase Survey is only 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 CVS survey report is not sufficient to make an informed decision regarding the purchase of the vessel.
An insurance survey is mostly a visual inspection, Mechanical, fuel and electrical systems are inspected where easily accessible to inspection for condition and compliance with current USCG, NFPA and ABYC standards. Mallet testing of the hull and deck structures, except the hull bottom 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 1.5 to three 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.
Pre-purchase C&V Survey
A Pre-purchase survey (PPS) is more expensive than an insurance survey (CVS) but 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 survey report may also be used to satisfy bank and insurance company survey requirements.
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 six to eight hours for an average 30’ – 45’ vessel. For vessels from 50’ to 75’ this extensive inspection can take 3 to 5 days.
Inspection includes examination of the vessel both out of the water and in the water, plus sea trial, usually on the same day and the following items are checked:
1. 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.
2. Hull and decks are inspected using a mallet test (percussion soundings to determine possible delamination of fiberglass composite laminates,
The internal structures are visually inspected for any signs of deterioration or failure.
3. 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.
On sailboats the mast and rigging are typically inspected from deck level only using binoculars. 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.
POWER & SAIL- WOOD, FIBERGLASS, STEEL & ALUMINUM: Captain Hugenot has been surveying them all for over 30 years. He is also performs expert Mechanical and Electrical surveys.
MARINE INSURANCE CLAIMS INVESTIGATIONS: Captain Hugenot has provided independent investigations, forensic accident reconstruction and written expert opinions for numerous marine claims adjusters throughout North America.
Captain Alan Hugenot’s CV