ible per incident; sometimes a deductible is
charged per item that needs to be repaired.
As mentioned above, service contracts often
don’t cover consequential damage so even if
your engine breaks down, repairs may not be
Many contracts don’t pay to remove
the engine from the boat or have the boat
hauled if it’s required for repairs, so there
may be additional expenses for that. Some
manufacturer-backed programs only pay for
haulouts if you buy the higher level of coverage, and even then it’s usually limited to a
couple of hundred dollars, though they often
don’t have deductibles. Also, wear and tear
isn’t covered by any policy and sometimes
that definition is a little squishy, resulting in denied coverage. Check the contract
details to find out how the company handles
deductibles and consequential damage.
FACT 4. Most service contracts aren’t
backed by manufacturers. Third-party
insurance companies usually write the con-
tracts, and manufacturers and dealers typical-
ly won’t step in to help if there’s a problem.
On the other hand, factory-backed programs
have agreements with their dealers. The
factory (rather than an insurance company
that may also provide service contracts on
refrigerators and cell phones) is ultimately
responsible, so you should expect better service when there’s a problem. Ask the dealer
if an offered contract is managed by the
manufacturer or a service contract company.
Those managed by manufacturers typically
provide significantly better coverage, and if
there’s a problem, you can speak directly to
the manufacturer. Keep in mind you don’t
have to buy the service contract sold by the
dealer. You can shop around for others and
compare prices and service.
FACT 5. You may be paying for coverage you don’t need. If you buy a third-party
service contract when you buy a new boat, it
won’t apply during the manufacturer’s warranty. That means that if you buy a three-year
contract on a boat with a one-year warranty,
the contract may only cover the last two years.
If you decide to buy a contract, find one that
will begin after the manufacturer’s warranty
expires. Don’t be pressured into buying an
extended service contract the same day you
purchase a new boat or engine. Many independent and manufacturer-backed contracts
offer a nine-month to one-year window for
signing on, so find out what the window is
and wait as long as possible before buying.
FACT 6. Several complaints received by
BoatU.S. Consumer Protection over the
years involve the dealer “forgetting”
to send in the premium. Unfortunately,
this doesn’t come to light until there’s a
breakdown and the service contract provider
refuses to pay on a claim. Make sure you get
verification that the contract premium was
received. Check with the company 20 days
after buying a contract to make sure all the
paperwork was completed.
FACT 7. Service contracts are moneymakers for dealers. Some contract plans
administered by independent companies
IN THE PAST FEW YEARS, CUSTOMER SATISFACTION SURVEYS FROM J.D. POWER HAVE NOTED A
STEADY DECREASE IN THE NUMBER OF PROBLEMS REPORTED FOR MARINE ENGINES.