Avoid Boat Warranty Woes

While granddad may have been able to get by with the dealer’s word and a firm handshake on his new boat purchase, sadly those days are long gone, particularly when it comes to service after the sale. Want to make sure you’re covered before Murphy (and his law) has a chance to climb aboard? Check out these five commonsense warranty tips that every buyer should heed when purchasing a new boat.

‘Boat Warranty’ Defined

A boat warranty is simply a manufacturer’s written promise to stand behind its product after the sale. Although required to state the basics (what’s covered, how long it’s covered, and how it will be corrected should problems arise), boat warranties are different from the terrestrial versions with which most buyers are familiar. More on this in a moment.

1. Read The Warranty Before You Buy

Reviewing the warranty beforehand allows you to verify that the warranty delivers the service and protection claimed by the dealer for the entire warranty period. For example, the five-year engine warranties offered by manufacturers A and B appear identical, except B uses the term “prorated,” while A states its warranty is “non-declining.” It may seem like a small difference, but it’s one that could cost you big money.

Prorated means B can reduce its liability costs for repairs over the life of the warranty. A’s non-declining warranty coverage is the same on the last day of your warranty as it is on the first, meaning coverage doesn’t decline based on engine age or use.

In any case, you have the right to understand your warranty. This includes knowing exactly who is covered by the warranty. Is it you? Is it your lender? Someone else?

Does the warranty include consequential damage? For example, if your boat collides with another boat and injures people because your steering failed (from poor installation or manufacturing), will the warranty cover you for tort liability claims of injured parties in the other boat? Probably not, as this is why you get marine insurance. However, if your warranty specifically excludes third-party claims, will this let your underwriter off the hook?

If you have any doubts about any aspect of your warranty, insist that whoever is providing the warranty explain it so that all your questions are answered – preferably in writing. If any doubts remain, provide the warranty documents to your attorney prior to signing and ask them to explain and answer any questions you have.

2. Don’t Assume Your Warranty Covers Everything

Unlike your new car, boat warranties are often comprised of numerous warranties offered by the manufacturers of its various components. The builder warranties the hull, but buyers can receive separate warranties for most anything else, from engines to ice makers. These individual warranties can vary greatly among manufacturers (both in scope and duration), meaning you’ll want to review each carefully to see what’s covered and for how long.

Some manufacturers offer “bow-to-stern” warranties, a nod to the bumper-to-bumper coverage of the automobile industry. This means the dealer will either cover any issue that arises or coordinate warranty repairs with the various manufacturers during the all-inclusive warranty period it’s offering (typically five years). Not all such warranties are created equal, so make sure the manufacturer’s definition of “all-inclusive” matches your expectations and you know who exactly is on the hook to cover a warranty claim.

3. Beware Of Weasel Words

Certain words and phrases can reduce the effectiveness or coverage of your warranty. These include terms such as “as-is” and “waived,” as well as phrases like “use of boat constitutes agreement.”

Along those same lines, beware of hidden waivers or words of limitation. Some warranties deprive you of rights that you would otherwise have had if you hadn’t signed the warranty. Are there provisions like “due diligence,” which may mean the warranty won’t cover aspects of a problem if you “should have” seen and recognized the telltale signs leading up to the issue?

Be on the lookout for waiver of venue language. Some warranties force the aggrieved party to go to a court and/or state that is not only inconvenient and more costly, but which also may have laws that are more favorable to the grantor of the warranty.

4. Understand The Claims Process

Start by asking the who, what, when, and where questions regarding your coverage. What’s the process for filing a warranty claim? Are there time limits on claims? Do you return to the original place of purchase for repairs, or can you use any authorized service facility?

Explore gray areas or unusual circumstances that may not be clearly addressed. Can you void the warranty by doing your own maintenance? If the boat must be returned to the builder for repair, who pays the haulout fees and transportation costs? That massive oil leak at the generator may be covered by the manufacturer, but who foots the bill for cleaning the bilge afterward?

When making a claim, follow the requirements as described in your policy while ensuring the entire process is properly documented. It’s OK to phone your dealer to discuss a problem and how it will be addressed, but always follow up in writing. Paper and/or email trails are crucial, not only to confirm all parties are aware of the issue and are in agreement as to how it will be resolved but also as backup should a legal dispute arise.

5. Clarify The Rules On “Transferable” Warranties

Builders hype the benefits of transferable warranties (those that can be passed to new owners) as a valuable selling point, however, some have more loopholes and exclusions than a signed-in-blood contract with Old Scratch himself. Make sure you understand the transfer process and documentation requirements, as well as any fees or time limitations to prevent voiding this part of your warranty.

Finally, if you’re considering purchasing an extended warranty, put on your “let’s make a deal” face before pulling out that wallet. Most manufacturers are almost always offering some type of incentive when purchasing a new boat – cash back, free warranty extensions, and so on. Planning your purchase around such events can save you money on an extended warranty or even allow you to get it for free. Don’t be afraid to use inclusion of an extended warranty as a bargaining chip to close the sale.