THE ADVOCATE BoatU.S. CONSUMER PROTECTION BUREAU BY CHARLES FORT
ARE STORM-DAMAGED BOATS TRASH OR TREASURE? Hoping for a great deal out of Hurricane Sandy? You may get lucky, but here’s what you’re getting into
HAVE YOU EVER DREAMED of buying a bargain-priced banged-up boat, and wondered if you should? It’s a fact of life that every so ften a major storm comes ashore and wreaks havoc on thou- sands of boats. Case in point: Hurricane Sandy that pummeled the East Coast last fall and damaged an estimated 65,000 recreational boats. Many were so badly damaged, they were written off by insurance
companies, including BoatU.S. Looking behind the scenes to see how some of those boats
make it back on the water can help you decide if a bargain boat is right for you.
TREASURE TO TRASH
The BoatU.S. Catastrophe Team (CAT Team), a group of experienced surveyors and claims
adjusters, spent months finding, salvaging, and cataloging thousands of boats that were damaged by Hurricane Sandy last year. Many were destroyed beyond fixing, some sank, and many
more had significant enough damage that they were declared a constructive total loss (CTL).
After a disaster, CTL designations are usually given to boats after the CAT Team provides an
estimate in the field for repairs that exceed the boat’s value. A boat may be declared a CTL
because the damage is great, or because the owner didn’t insure it for much, in which case it
may be well worth repairing. But it’s not easy to tell one from the other. A boat that appears
relatively undamaged may, in fact, have been sitting underwater for days.
Once a boat is dubbed a CTL, the insurance company sends a check to the owner,
along with settlement documents, and in
return receives the boat’s ownership papers.
Most people view a CTL designation as the
kiss of death. Though owners usually have
the option to buy back their boat at its salvage value, most choose not to do so. Even
if they don’t, the boat may still have a bright
future. Mike Costa is a broker for Certified
Sales, a company that finds new homes
for boats that the insurance company has
deemed not cost effective to repair. “Once
the insurance company has declared a boat
a CTL, we’re given an assignment to the
boat, which gives us the authority to pick
it up, move it, and store it,” he says. “For
Hurricane Sandy, we rented space in both
New Jersey and New York, where we stored
several hundred boats while we worked to
find people to buy them.”