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UPDATE ON DONATED BOATS, YACHTS AND SHIPS

by Rob Scanlan, CMS/MMS/ACMS Accredited & Certified Marine Surveyor

The new law states that the deduction value of a donated boat, yacht or ship is limited to the gross proceeds of a sale by the charity on the open market. There is however, exceptions to the gross proceeds rule which will allow you to deduct the fair market on the date it was donated. They are as follows:

An acknowledgement by the receiving charity, that it will make a significant intervening use of the boat or yacht, a detailed statement by the charity of its intended use, the duration of that use and a certification that the boat or yacht will not be sold for a period of at least three years.
An acknowledgement by the receiving charity that it intends to make material improvements to the boat or yacht increasing it’s value, a detailed description of the intended material improvements and a certification that the boat or yacht will not be sold before completion of the improvements.
An acknowledgement by the charity that it intends to give or sell the boat or yacht to a needy individual(s) or to a charitable institution at a price significantly below fair market value. This provision applies only if the gift is in furtherance of the charity’s purpose.
A special rule applies for boats with a value under $5000.00. In this case a donor may claim a deduction for the lesser of the boats fair market value or $5000.00

Most charities will provide the acknowledgment required by submitting to the donor and to the IRS form 1098-C. If the charities acknowledge on this form one of the four exceptions noted above, then the donor is entitled to take the full appraised value of the yacht or boat as a charitable deduction on their Federal and possibly State tax returns in the year in which it was donated.

Any yacht or boat having a fair market value in excess of $5,000.00 must have a written appraisal by an Accredited & Certified Marine Surveyor.

Currently, the donor of a vessel with an appraised value in excess of $5000 submits an 8283 and 1098C tax form to the IRS showing the appraised value verified by an Accredited & Certified Marine Surveyor and the intended use by the charity. I have these forms which the charity receiving the vessel, must sign and certify that it will not sell the vessel within three years. The exception to this three year rule is if the donor accepts the immediate sale price realized by the charity as his tax deduction for the donation. After three years there is no reporting requirement as the donated asset is considered depreciated to a point where the appraised value is no longer meaningful.

If for some reason the IRS should take the gigantic step of completely changing their existing procedures and tax forms for charitable donations of yachts, ships & boats, I would be notified immediately. Donating your boat, yacht or commercial vessel is still a very viable financial alternative to an actual sale with many tax advantages.

Make sure that if you or your client will be donating a yacht, ship or boat it will be stated in writing, that the foundation will keep the boat or yacht for three years. Please call me if you have any questions about the new tax law and how it might relate to donating a boat, yacht or ship. To date I have appraised 1,075 yachts, boats and ships nation wide.

Key-numbers as to how likely the problem:

[1]-Very Common.

[2]-Common.

[3]-Possible.

[4]-Rare.

[5]-Very Rare

The color and quantity of exhaust smoke tells a great deal about the condition of a marine diesel engine. All marine engines create smoke to some extent, but if the diesel engine is in good condition, the quantity will almost be invisible. Defects that affect the fuel, breathing or compression will prevent correct combustion and lead to excessive exhaust smoke.

Black Smoke is caused by partially burned fuel. When the fuel/air mixture increases there is insufficient oxygen present in the cylinders to complete the combustion process. Large quantities of carbon are then produced which appear from the exhaust as minute black soot particles. Engines with turbochargers have additional sources of black smoke.

Black Smoke Insufficient Air:

Causes: Air intake filter clogged [2] - Air intake restricted [3] - Exhaust restricted [3] - Leaking inlet or exhaust valves [4] - Poor engine room ventilation [4]

Black Smoke Excessive Fuel:

Causes: Defective injector(s) [1] - Incorrect injector nozzle [3] - Injector pump incorrectly set [4] - Low fuel grade [4]

Black Smoke Engine Overload: As load increases the governor senses the slight decrease in RPM and adjusts the injector pump to deliver more fuel. If the engine becomes overloaded then the increase in fuel does not increase RPM and no extra air is being sucked into the cylinders. Net result – soot:

Causes: Boat bottom dirty [1] - Propeller dirty/fouled [1] - Engine alignment incorrect [2] - Propeller incorrect [3] - Transmission incorrect ratio [3]

Blue Smoke: More accurately the smoke will appear white with a hint of blue. It often takes a trained eye to differentiate. Blue smoke is caused by oil burning in the combustion chamber or hot exhaust system. Engines that have turbochargers have additional sources of blue smoke:

Causes: High crankcase pressure [3] - Piston rings / cylinders worn [3] - Valve guides worn [3] - Valve seals defective [3] - Oil leaking into the intake from defective gaskets [4]

Steam: If you are not sure whether the white cloud from the exhaust is smoke or steam then watch how it dissipates. Steam or water vapor will rise and clear fairly quickly especially in warmer temperatures. Smoke tends to stay closer to the water and take longer to dilute with the local breezes.

Causes: Water vapor from condensing exhaust gases is normal in colder climates [1] - Insufficient raw water flow [2] - Excessive exhaust gas temperatures [4]

White exhaust smoke: Unburned fuel that can be caused by excessive fuel or poor combustion. Note: Excessive periods at idle can cause a build up of unburned fuel within the exhaust system that will burn off in the first few minutes the next time the engine is operated under normal power. This condition is normal for diesel engines and common in sailboats that idle for lengthy periods charging batteries or running freezers.

White Smoke Poor Atomization of Fuel:

Causes: Injector nozzle stuck open [1] - Injector nozzle seat worn [1] - Injector pressure low [1] - Low ambient temperature [3] - Low fuel grade [4] - Injection timing retarded [4]

White Smoke Poor Compression:

Causes: Leaking inlet or exhaust valves [3] - Piston rings stuck in grooves [3] - Worn piston rings and cylinders [3]

White Smoke Water in the fuel:

Causes: Contaminated fuel [2] - Defective cylinder head gasket [3]

Servicing Your SternDrive/OutDrive Units

by Rob Scanlan, CMS/MMS/ACMS

How often should it be done?

I recommend sterndrive/OutDrive unit maintenance every 50-65 hours. To most boaters here in our New England coastline and lake regions, this equates to once per season. The best time to perform this service is the same time you haul out to winterize your boat. If you exceed 65 hours per boating season, I will still recommend you to stick to the 50-65 hours and service your drive(s) when you winterize at the end of the season.

Servicing your outdrive not only performs a required maintenance function but it also can give you insight into the condition of your internal drive components. Water is a major enemy of drive units. Water in a unit, that has been recently run, will cause the oil to look milky. An outdrive that has set for a few days and had time to separate will drain water first and then the oil. Remember oil floats on water. Also check the tip of your magnetized drain plug and the oil itself for metallic shavings. this magnetized drain plug is located at the bottom of the outdrive housing just below the prop. Its not abnormal to have some very fine particles, demonstrating normal wear or break in, but larger pieces are a sign of serious problems. Any indication of water or excessive metallic fines should be brought to the attention of a qualified marine mechanic immediately.

It also important to stress the absolute need to follow drive service recommendations for new outdrive units. This even applies to older boats that have had their drives rebuilt, replaced or repaired. Manufacturers recommend a 20-hour break in period at no more than 2/3 throttle and no extended high rpm runs. At the end of the twenty hours, service your outdrive units as suggested. This time you can expect to see more metallic files. This is normal, as the gears are seating and rounding off some of their square edges.

Drive servicing is very cost effective. Think of it as an insurance policy. A few dollars worth of oil to protect a unit that can sometimes cost thousands of dollars to replace.

What is osmosis?

The problems start to occur when the water molecules migrating into the GRP (fiberglass) encounter other chemicals inside the laminate, primarily water-soluble materials (WSMs) such as the emulsion binders used to hold the fiberglass mat together before it is moulded, or pockets of uncured or partially cured resins in the hull mould. The water molecules can have a chemical reaction with these substances, forming larger molecules of a new chemical, often acidic - which unlike the original small water molecules, can not carry on passing through the GRP. These larger molecules are then trapped. This is the point at which osmosis actually starts.

The important parts are that the hull is not waterproof (it is a semi-permeable material), and that osmosis causes a low concentration fluid (water) to pass through the hull to join the higher concentration fluid (the chemical mix formed by the water plus WSM) inside the fiberglass laminate schedule.

Pressure is thus built up inside the laminate. If this process takes place in a solid part of the laminate, there is usually no problem as the structure is strong enough to contain the pressure. If however it takes place on the boundary of a small air-bubble in the moulding, or at a point where layers of fiberglass are not properly bonded, the new chemical compounds slowly fill up the bubbles or the very small gaps between layers with liquid. Almost all mouldings have these air bubbles and small areas of poor bonding, although they should not. Ideally the resin should totally fill the gaps between the fiberglass strands, and every layer should perfectly bonded. This is extremely difficult to achieve with conventional moulding techniques. The process of osmosis in a fiberglass hull is very slow, unless the moulding is a poor lay-up schedule, and no matter how long it remains in water a typical fiberglass laminate cannot absorb more than about 2-3% of it’s own weight of water.

If this osmosis (using the term in a correct manner) was all that happened, it would be a very minor problem. Even completely saturated with water molecules, a fiberglass laminated hull still retains most of it’s strength, although it does become slightly more flexible. Racers who want stiff hulls with the absolute minimum weight already mostly keep their boats ashore when not sailing, and for any properly built cruising boat 2% or so extra weight and a trace more flexibility in the hull-structure should not be a problem.

Once again, if the air bubble simply filled with this acidic compound, the problem would still be relatively minor. However the nature of the osmosis process is that water molecules keep osmosing through the fiberglass laminate, and join the chemicals in the bubble, steadily building up hydraulic pressure. Eventually this causes the surface of the moulding to blister.

These blisters are the typical sign of what I refer to as ‘osmosis’. When pierced these blisters will give off a small amount of chemical-smelling (usually vinegary) liquid - which is the juice built up inside the pressure-raised blisters. The term ‘blister juice’ is often used. This ‘blister juice’, which is usually acid, can break down the polyester. This breakdown process is known as hydrolysis, and causes a reduction in strength of the laminate. This is however normally very localized, and the moulding as a whole will still retain most of it’s strength despite blistering. Only if the blisters are very large, or very deep-seated, is this generally a problem.

Hey Rob, Can I be present at the survey when you perform the diesel engine tests?

No problem, I welcome all my clients to be present but leave the relatives and the in-laws at home; especially the brother-in-law shade-tree mechanic. Opening all hatches to gain access to the engines and my run-up diagnostic testing, is very serious and these areas are dangerous.

My Diesel Fuel Testing Identifies Contamination in Fuel.

Most marine diesel engine problems I am seeing recently are related to fuel problems on both commercial vessels and yachts. Diesel fuel contamination problems have two different categories, biology and chemistry. Thinking you have a chemical problem when you have a biological problem and treating it with the wrong chemical will not solve your problem but compound it. The approach of the local boat store salesman telling you “this will solve your problem” after you have tried other chemicals may create a bigger problem.

The most prominent problem is chemical and lies in the creation of "asphaltene." Asphaltene or in simpler terms, diesel sludge looks like algae but there is no algae in diesel fuel. Asphaltenes are created by either the natural aging of diesel fuel, by simply adding fuel additives or mixing perfectly good clean fuels from two different suppliers.

The other common problem that affects diesel fuel is a biological problem called fuel bugs. There are many types of fuel bugs which are also bacteria and fungus that can live in diesel fuel. A small amount of water from either condensation or from entering the tank through a vent can start an ideal fuel bug condition. The growth is alarming and creates a filter-clogging situation in just a few days.

To identify these fuel problems so the proper fix can be recommended, I conduct two tests. A simple, low cost fuel test kit for biological contamination and a lab package to identify fuel instability.

The test kit is a simple dip slide. The slide comes in a plastic tube and is attached to the cap. Within 24-36 hours I can detect bacteria or mold in your diesel fuel tanks. If the fuel is contaminated the fuel tanks and related fuel lines will need a biocide treatment.

My Lab Package offers Diesel Fuel Stability Test # HLOO-0021. This program will indicate if the fuel is up to ASTM standards and if there is an unwanted rapid degrading taking place in the fuel. If the fuel indicates chemical instability I will always offer solutions to the problem.

Rob Scanlan, CMS/MMS/ACMS conducts computer engine analysis and compression testing on gasoline and diesel engines as well as engine oil analysis and fuel analysis on yachts, ships, pleasure and commercial vessels.

HOW EXPENSIVE IS BOATING

by Rob Scanlan, U.S. Master Marine Surveyor

Let’s face it; boating isn’t easy or cheap. Boat prices keep rising,

fuel costs keep escalating; slip fees, winter storage and repairs

are at an all-time high. Add to that the time and energy

required for boat maintenance, keeping up with the ever

changing regulations, weather, tide conditions and the new

environmental restrictions; the list goes on and on.

In the end, boat ownership is for those who enjoy boating so much

they are ready, willing and able to put up with the hassles and give up

other forms of entertainment and sports. It leaves behind those

who would enjoy being out on the water if only it did not cost so

much or take so much time to prepare for, to clean up after, etc.

So many of them are former boat owners, who had no idea about

the incredible costs involved in boating.

When I conduct the sea trials on a boat or yacht, I have my

own computers plugged into the engines to do an operational

assessment of the engines and instrumentation read-out

performances; one thing here, my computers and the figures are

accurate and precise – the figures do not lie.

Let’s say you have a 29’ Sea Ray powerboat with (2) small-block,

230 horsepower Mercruiser Fuel-Injected engines. The best fuel-

efficient, most economical speed is called “Cruising Speed”.

This is between half and three-quarter engine throttle; usually at

3200 – 3500 RPM’s. Each engine is burning 17-19 gallons of fuel

per hour times (2) engines; that’s 36-gallons per hour. The average

gallon of gasoline at the marina is $3.25 per gallon.

The math –

36 gallons times $3.25/gallon = $117.00 per hour. If you take a

cruise from Lynn to Boston Harbor; around Boston Harbor

for a little sight-seeing and back to Lynn, this would be a five

and one-half hour trip.

The math –

Five and one-half hours times $117.00 per hour = $643.50

for the trip if you only stay at “Cruising Speed”. Now let’s say you only

do a trip like this twice per month and you only do your boating from

June to October which is the average boating season in New England,

More math –

$643.50 twice per month = $1287.00 per month of boating,

times five months = $6435.00 per boating season in just the fuel

costs; if you keep the engines at the “Cruising Speed”.

“Can you hear me now” throttle-jockeys ?

What must also be factored into boating is that monthly payment; let’s

say $400.00 times twelve months = $4,800.00. I do not know of one

boat owner in New England with a low boat payment any where near

this but work with me. Now there is insurance, and God help you if you

are above a step-10 on your Massachusetts driving record; have no

boating education, or have a loss or insurance claim. But ideally, with

proven boating experience; and proof of boating education and a very good

driving record, you may pay $900.00 per year to insure that “Water Toy”

if and if and if ---.

Now comes the storage, winterizing, covering and spring commissioning.

Figures and facts can’t be altered here; that 29’ boat will cost another

$5,250.00 - $6900.00 per year; lets say $6 grand to make the figures easy.

More math for the boat owner based on a conservative boating season-

Fuel = $6,435.00

Boat payment = $4,800.00

Insurance = $900.00

Storage, winterizing, spring commissioning = $6,000.00

Slip-fee or mooring fee = $2,000.00

Food, beverages; swimwear, etc = $525.00

Bottom painting, engine tune-up waxing/cleaning = $2,125.00

Total boating expenses for the year = $22,785.00

Now you know what BOAT means : Break Out Another Thousand

FEULISH & COSTLY

By Rob Scanlan, CMS/MMS/ACMS

United States Master Marine Surveyor

Today’s crude oils have increased viscosity and density, along with a higher concentration of impurities and water, which are not removed during the refining process. Higher levels of asphaltene and carbon residue are also present. These factors contribute to a wide range of storage, handling and combustion problems, often creating undesirable combustion byproducts. This combustion byproduct can be carbon build up on marine engine parts and exhaust pollution (NOx).

These refining issues translate into two types of diesel fuel problems that I find on pleasure yachts and commercial vessels, those that are here now, that you can see and those that are waiting to happen. You can be proactive and treat the problem or just accept it as a cost of doing business. Fix the fuel problem and increase the bottom line or ignore it and replace equipment when you think it is time.

Time after time diesel engine owners have encountered fuel problems and repeatedly these problems have been diagnosed as “Algae in the tank.” Anyone that has encountered this “diagnosis” by a marine engine surveyor or mechanic should be aware that the “expert” that made the diagnosis is NO EXPERT

Diesel sludge aka “algae” is in fact asphaltene. Asphaltene is naturally occurring impurities found in all diesel fuel. Asphaltenes are insoluble in diesel fuel. This means they will not magically dissolve in your fuel.

Bacteria and mold are also problems that may occur. For these problems you must have water in the fuel. These biological type problems ONLY grow at the point where the fuel and water meet.

Some crude oils have higher levels of asphaltene than others. The end product, the diesel you buy varies in asphaltene content. Unless you know the chemistry of the crude oil you have no clue as to the amount of solids in your fuel from day to day.

The higher the concentration of asphaltene in the crude oil, the longer the molecular chain of asphaltene. Longer chains are bigger. They all stick together. Once stuck together they do not burn efficiently. They cause engine smoke and they clog filters. This is usually found in fuel tanks on sailboats I have surveyed.

There are two options to deal with asphaltene, chemically or mechanically. Chemicals must be the correct chemical to break up the molecular chains. Read the label on your chemical treatment and see if it mentions “asphaltene” or diesel sludge. Then ask your marina what the know about it and how the marina treats it. You may be surprised by the answer. Mechanically does not mean filtering out the large particles though, it is part of the equation.

Asphaltene particles reduced to 3-to-5 microns in size and evenly blended will burn more evenly producing more power, less smoke and will make your sludge problem go away over time.

Smaller fuel droplets are injected. Improved combustion is achieved resulting in fewer carbon deposits, lower equipment maintenance costs and can lead to a significant reduction in nitrous oxide (NOx) emissions.

Dieselcraft of Auburn, CA has developed a proven two-stage fuel purification system to deal with the asphaltene. The system “homogenizes diesel fuel. It removes large solids and water plus reduces the asphaltene particle size as shown in the following lab test results. All particles from 100 micron to 6 micron were reduced where particles smaller than 6 micron were increased, indicating the effectiveness of the system process.

One of the many tests I do in my computer engine analysis and compression testing surveys, is testing the fuel.

Rob Scanlan is an Accredited & Certified Master Marine Surveyor covering Maine to Long Island, NY.

Rob,

I have a question about your surveys for sailboats you have done for some of our club members. On the section of your survey, where you inspect the mast, rigging and sails, you have IEPJ dimensions recorded. Where do these measurements come from ?

Thank You,

Keith & Tina Blackjohn

"P" is the luff length of the mainsail, measured along the aft face of the mast from the
        top of the boom to the highest point that the mainsail can be hoisted or black
        band.

"E" is the foot length of the mainsail, measured along the boom from the aft face of
        the mast to the outermost point on the boom to which the main can be pulled or
        to the black band.

"I"    is measured along the front of mast from the genoa halyard to the main deck.
        The main deck is where the deck would be if there were no deckhouse.

"J"   is the base of the foretriangle measured along the deck from the headstay pin
        to the front of the mast.

"JSP" is the length of the spinnaker pole or the distance from the forward end of the
             bowsprit (fully extended) to the front face of the mast.

"ISP"   is measured from the highest spinnaker halyard to the deck.

"PY"   and "EY" are, respectively the luff length and foot length of the mizzen of a yawl
            or ketch measured in the same way as for the mainsail.

"IY"   is the measurement from the staysail halyard to the deck.

"JY" is the measurement from the staysail stay to the front face of the mast.

"LP" is the shortest distance between the clew and the luff of the genoa
About 30% of my surveys are on sailboats through out New England, Cape
Cod and the Islands as well as Long Island, New York.

In response to some questions on a charter/purchase program from a 501c-3 foundation for donated yachts and boats:

Because the boat was donated to a non-profit foundation, the nonprofit needs to hold the title in their name for two years. If the nonprofit were to sell the boat within the first two years, then the sale has to be reported and the donor can only deduct the amount the foundation sells the boat for (usually less then the appraised value). It is very important that the party donating the boat or yacht, receives a written statement from the foundation, that the foundation will keep the vessel for two years.

However if the nonprofit foundation sells the boat after the two year period, the sale doesn't have to be reported and the donor can deduct the appraised value (usually more then the fair market value). So, a 501c-3 nonprofit foundation can charter the boat to you for that two year period. Then at the end of the two years, you have the option to buy the boat.

The charter/purchase agreement between that 501c-3 foundation and the charter/buyer guarantees you the option to purchase the boat at the end of the two year period.

The party donating the yacht or boat, has the security of the foundation stating in writing to them, that it will keep the boat or yacht for the full two years.

Let's say you bid $20,000 and win at $20,000. By the wording of your charter, you must pay 75% of the selling price ($15,000) and the 501c-3 foundation holds the title for 2 years. For those 2 years, the boat is officially, 'Chartered' to you.

During which time you can operate, repair, or restore the boat at your own expense. At the end of 2 years, you can pay you the remaining $5,000 and the boat will be yours.

Many boat owners, myself included, need to face the ugly fact that it will be necessary to winterize our boats against the icy blasts of a long New England winter. The discussion always comes down to this question: "Is the money you save this fall worth the risk of facing major damage next spring, in case you missed something?" It is my opinion - and I have an opinion on just about everything marine related, that unless you really know what you're doing, leave it to the pros! That said, I have a few reminders for those of us who are still going to do it ourselves.

Engine Winterization

1. Change the oil and filter.

It doesn't matter if the engine has 5 or 105 hours on it since the last change. Today's oils do not wear out, but they do get contaminated with dirt, combustion residue and acid. Leaving any of these things to settle on your engine's moving parts, during the winter, is a bad idea.

Run the engine until the oil gets warm, thus suspending all of the "bad stuff." Next, drain or pump it out, change the filter (including a new gasket), and put in the new oil.

Caution: Do not over fill, as too much oil will cause all kinds of problems. Check the owner's manual for the manufacturer's recommendations on the type and amount of oil to use.

2. Add fuel stabilizer to your fuel and top off the tank. I only recommend a product called SEA FOAM which can only be purchased at a NAPA auto store. note that any "NAPA GOLD" products are the marine line and all "NAPA GOLD" marine product top the list when dealing with the marine environment. Run the engine long enough to ensure the stabilized fuel has reached your carburetor or injectors.

3. Fogging: Fogging is accomplished by feeding a rust preventative lubricant through the carburetor or throttle body, while the engine is running at about 1000 to 1200 RPM's and is thoroughly warmed up. Very slowly pour in the lubricant until lots of blue smoke comes out of the exhaust. This method will thoroughly coat the cylinders, rings, valve seats and valve stems. DO NOT pour the liquid in too quickly or you will "choke" the engine, causing combustion knock. Besides, too much liquid added at one time can cause hydrostatic lock in the cylinders and DESTROY your engine! Follow the fogging oil manufacturers' instructions! NEVER FOG FUEL INJECTED ENGINES

4. I/O Engine: If you have an I/O (inboard/outboard), drain the lower unit and check it for any sign of water contamination (a milky color instead of clear) and/or any metal shavings (gear damage). If all looks good, refill the unit with new grease. If not, get it repaired now!

5. Cooling Systems: Preparing your cooling system for winter depends on the type of system you have. Remember, always follow the manufacturers' instructions and use the following procedures only as a guide.

Raw Water (Direct) Cooling System. Proper winterization of a raw water system should start with a thorough flushing of the system with fresh water running through the engine while it is running at normal temperature. This part is REALLY important if you have been running in salt water.

First, disconnect the intake hose from the thru hull fitting and attach it to a garden hose. Note: if you have an I/O, you'll need a set of "ear muffs" to attach to the water intake on the lower unit. Remember, running an I/O for even a few seconds without water will destroy the impeller in the water pump!

After flushing, drain the engine block, manifolds, risers and oil coolers by opening the petcocks on the various units. After all the water has drained out, close each petcock. Disconnect the garden hose from the intake hose and place the intake hose in some environmentally friendly ("Pink") antifreeze and drain the fluid by running the engine. When the antifreeze starts coming out the exhaust, shut the engine down.

Now here's a very important note: Don't forget your engine has a thermostat! This whole procedure must be done with the engine totally warmed up and the thermostat OPEN. A closed thermostat will not allow the antifreeze to enter the block or heads. This means the antifreeze will go through the manifolds and out the exhaust, leaving the block and heads completely void of any antifreeze. If this happens, next spring you may have a cracked block or head and find it necessary to buy a new, very expensive engine. One of my sons stores many boats over the winter, most of which are laid up by the owners themselves. Each spring, one or two of them fall victim to this oversight

Closed (Indirect) Systems: These systems do not require annual draining and flushing of the closed part of the system. HOWEVER, the open part of the system DOES require the same procedures of flushing, draining and antifreeze infusion as previously described in the Raw Water (Direct) System.

Finally, some additional thoughts:

* If any of the above instructions seem to be confusing or over your head, that's probably the best clue that you need a professional to winterize your engine.

* Also remember, if a pro lays up your engine and something goes wrong, next spring he has a problem. If you've done your own work, you have a problem!

ROB SCANLAN IS AN ACCREDITED & CERTIFIED MASTER MARINE SURVEYOR CONDUCTING COMPUTER ENGINES ANALYSIS AND COMPRESSION TESTING ON GASOLINE & DIESEL ENGINES THROUGH OUT NEW ENGLAND.

BOAT & YACHT INSURANCE

Let's start by describing the two basic sections of a typical boat or yacht insurance policy: physical damage and liability. The physical damage section covers accidental loss or damage to the boat and its machinery. This not only covers the hull and the engine(s), but also the sails and other equipment on board that are required to operate the boat.

The liability section, sometimes referred to as P & I (Protection & Indemnity), covers your legal obligations to third parties. This legal liability can arise from bodily injury or loss of life, or damage to someone else's property, as a result of the ownership or operation of your boat. Liability coverage also helps pay for your legal defense if you are sued for a liability that may be covered under your boat insurance policy.

Physical Damage — What Losses are Covered?

Physical damage coverage generally pays for repairs to your boat that are necessary as a result of damage caused by a wide range of perils. The best policies provide "all risk" coverage, which means that if the cause of loss is not specifically excluded, it is covered. Typical causes of loss that are covered include: weather-related perils such as wind, rain, hail, lightning and wave action; fire; loss or damage caused by theft or vandalism; and collisions with docks, submerged or floating objects or other boats. It is wise to select a policy that continues to cover your boat while it is stored on land, or while you transport your boat over land by trailer.

The boat owner has the responsibility to maintain their boat, and so normal wear and tear is often excluded under a boat or yacht policy. The number and type of physical damage exclusions vary from company to company, so take the time to compare to avoid surprises later.

Loss Settlement - Agreed Value vs. Actual Cash Value

When comparing physical damage coverage, the most significant difference that can be found among boat or yacht insurance policies is whether the coverage is based upon "agreed value" or "actual cash value" (ACV) loss settlement. Agreed value policies normally pay the amount shown on the policy if the boat is considered to be a total loss. Under such a policy, damage resulting from a partial loss is generally paid for on a replacement cost (new for old) basis, less your deductible; that is, physical depreciation will not be factored into determining the value of the lost or damaged items. However, some items that are subject to higher amounts of normal wear and tear, such as canvas, sails, trailers and some machinery, may be subject to allowance for depreciation in the event of a covered loss.

An actual cash value policy provides less coverage than an agreed value policy, but generally at a lower cost. An ACV policy provides coverage up to the current market value of the vessel in the event of a total loss, taking into account depreciation and the condition of the boat at the time of the loss. Payments made for partial losses are usually reduced based upon physical depreciation of the lost or damaged items, and the policy deductible is also applied.

While an agreed value policy typically costs the boat owner more, and provides broader coverage, an actual cash value policy may suit the needs of an owner looking for an economical alternative. I discuss all options with my clients and their intended cruising plans.

Personal Property and Towing & Assistance

Two additional coverage’s often found in boat and yacht insurance policies are: Personal Property coverage, and Towing & Assistance coverage. Personal Property coverage includes such items as clothing, personal effects, and sports and fishing equipment belonging to you or your family while those items are being loaded/unloaded and while aboard your boat. Similar to physical damage coverage, there are exclusions that vary from company to company, so it pays to compare.

Towing & Assistance coverage reimburses you for the costs that you incur when you need emergency assistance for your boat, and you and your boat are not in immediate danger. Some examples of emergency services that you may need which may be covered include: towing to a place where repairs can be made; delivery of fuel, oil or parts; or emergency labor while underway.

Liability — Other Important Coverages

The liability section of a comprehensive boat insurance policy provide many coverages that are important to boat owners. Coverage for the removal or disposal of the wreck of your boat is important to have, especially if the wreck is deemed to be a hazard to navigation. Boat owners may also be responsible for any containment and clean-up expenses resulting from oil pollution or contamination caused by their vessel. It's important that your boat or yacht insurance policy covers your liability for those clean-up expenses, which could add up to a considerable amount. If you ever intend to borrow someone else's boat, confirm that your liability coverage extends to the other boat. This is called "non-owned" boat liability coverage. Finally, boat owners who employ paid crew members should ensure that their policy covers their liability to the crew under the Jones Act and General Maritime Law.

A good policy will also provide a separate coverage for your liability under the Federal Longshoremen's and Harbor Workers' Compensation Act. This will cover your statutory liability to temporary shore-based workers, such as a mechanic or marina employee, if they become injured aboard your boat.

Most boat and yacht policies exclude coverage while your boat is chartered to someone else, or used to carry passengers for a fee. Under the right circumstances, a good marine insurance company may extend your coverage to include those situations.

Medical Payment Coverage

You should verify that your policy has an adequate limit of coverage for Medical Payments. Medical Payment coverage will pay for first aid treatment, ambulance, hospital and other costs that result from someone being injured on your boat, even if you are not legally responsible. It is important to ascertain whether the coverage also applies while someone is boarding or leaving boat, and while being towed behind your boat, such as while water skiing. Check to make sure that injuries to you and your family are also included in this coverage. Given equal amounts of insurance, coverage on a "per person" basis may be preferable to coverage on a "per accident" basis.

Uninsured Boater Coverage

Since boat liability insurance is not mandatory, there are many boaters operating without liability coverage. Uninsured Boater coverage is designed to compensate you for injuries to persons aboard your boat that are caused by an operator of another boat who has no liability insurance. If you are legally entitled to recover damages from the other uninsured boater, or if you or your guests on your boat are the victims of a hit-and-run boater who cannot be identified, this coverage can help ease the financial impact of those injuries.

Factors Affecting the Cost of Insurance

The underwriter must consider many factors when determining the rate (or premium) to charge for a boat policy. The most common determinants are: value, length, and age of boat; type of boat (i.e. power, sail); type of engines; mooring location; intended area of navigation; previous boating experience and claim history of the owner and the underwriter will also consider the automobile driving record of the owner(s), and whether they have taken any safe boating courses.

There are several ways that you can reduce the cost of your boat insurance. The most common way is to select the highest deductible amount that you are comfortable with. In general, physical damage deductibles start at around 1% of the insured value of the boat, and can be increased to sometimes as much as 5%. Each higher deductible amount reduces your insurance premium. Think about how much you could affordably pay out of pocket if a loss occurred.

Many yacht policies include a lay up period which is a time that the yacht is normally laid up and out of commission, such as during the winter months in colder climates. The underwriter will normally allow a discount for each month that the yacht is decommissioned. You can usually reduce your premium by requesting the longest possible lay up period that would be reasonable for your part of the country.

Think about where you will actually be operating your boat. If you consistently navigate close to your home port, you should inquire whether a more limited navigational area on your policy can save you money. In other words, you may not need coverage for the entire east coast of the U.S. when you only operate your boat in Maine.

The condition of your boat was also mentioned as a rating factor. If you own an older boat that is around 26 feet or larger, the underwriter may request a recent marine survey of your boat before quoting or insuring it. The better the condition, the greater the likelihood of its being approved for insurance and your receiving a competitive quote. Anything that you can do to update and repair critical systems prior to the boat being inspected may improve the results of the marine survey and leave a better impression with the underwriter.

Lastly, installing certain safety devices on your boat can sometimes reduce the premium that you will pay. Some marine insurers will give credits for such safety items as: an automatic fire extinguishing system in the engine compartment, a fume or vapor detector in the bilge, or certain anti-theft alarm or tracking devices.

Now that I have described some of the key elements of boat and yacht insurance policies, I hope that you are in a better position to understand marine insurance. It is also wise to call me for a thorough inspection or survey of your boat or yacht .

Rob Scanlan is an Accredited & Certified Master Marine Surveyor

How small of a boat would you check out for me and my brother and do you think we are to young to own a small boat and have you check it for us. I am 15 and my brother is almost seventeen.

Theresa and Jeff Block

SO MANY OF MY CLIENTS ARE ALL AGES AND HAVE INTERESTS IN ALL SIZES OF BOATS AND YACHTS. OF COURSE I WOULD BE GLAD TO INSPECT THAT BOAT FOR YOU AND YOUR BROTHER.

LET ME INTRODUCE YOU TO ONE OF MY YOUNGEST CLIENTS.

ONE PICTURE TELLS A THOUSANDS WORDS ~

What's the difference between the green and orange colored anti-freeze/coolant?

Green antifreeze means that it is an IAT (inorganic additive technology) formulation. It has a 3 year recommended anti-corrosion additive life and no anti-cavitation additives unless specifically rated for diesel engines. Most of them aren't.

Orange antifreeze like Shell Dex-Cool is an OAT (organic additive technology) that has a 5 year additive life and a high quality anti-cavition inhibitor for gasoline and diesel engines.

The (2) types should not be mixed. Doing so negates the benefits of the Dex-Cool extended life and anti-cavition inhibitor.

IAT might be fine for winterizing marine engines and exhaust systems, but it is not the optimum choice for the engine's closed cooling system itself.

Mixing the IAT and OAT in a power boat however where the engines are the prime movers, cavitation vortexes will over time drill pin holes in the engine blocks.

If boating will be a family activity, members of the family should be involved in choosing the boat. Will it be a fishing boat most of the time? A water-ski tow machine? The basic picnic cruise boat? Determine what it is the family wants the boat to do, then go find the model to fit those needs. Most boats are multifaceted – they can be fishing boats in the morning and ski boats in the afternoon.

CAN YOU GET A GOOD DEAL ON A DONATED BOAT ?

ARE THESE GOOD BOATS TO CONSIDER ?

Robs reply,

Understand that these donated boats/yachts/ships are takin in by foundations as assets and not liabilities. Although the yachts and ships; (yes ships are donated also) that I appraise have been looked at by a representative of that foundation to determine if that foundation wants to accept it.

Recently, I had a call from a marina wanting to donate "a few boats". I went to appraise the boats which turned out to be abandoned wrecks and no foundation would take them.

I instruct all of my clients donating yachts and ships to have all maintenance logs, receipts and paperwork available for my inspection on the date of the appraisal.

You will in fact need a "Condition and Valuation" survey done on any donated vessel you intent to charter/purchase because the appraisal done on that vessel is for " Donation Purposes Only". No bank, financial institution or marine insurance underwriter will accept the "Donation Appraisal" for financing or underwriting.

Keep me posted and feel free to call the office.

It depends on how this heater system was installed. Is the system diesel fuel fired or LPG (Propane gas) fired?

Either way, the two systems must meet ABYC (American Boat and Yacht Council); NFPA (National Fire Protection Standards) and USCG safety standards.

If the current owner of the sailboat had it professionally installed it is probably installed to meet these standards.

You must also have Carbon Monoxide detectors installed in the living/cabin areas of the boat.

I would like more information from you about the manufacturer of the heating system and hopefully the company that installed the system.

ROB SCANLAN, CMS/MMS/ACMS

I notice that motor yachts are built on a modified-V hull while trawlers are constructed on either a semi-displacement or a full displacement hull form. What's the difference?

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BOAT & YACHT INSURANCE

Physical Damage — What Losses are Covered?

Loss Settlement - Agreed Value vs. Actual Cash Value

Personal Property and Towing & Assistance

Liability — Other Important Coverages

Medical Payment Coverage

Uninsured Boater Coverage

Factors Affecting the Cost of Insurance

YACHT & SHIP DONATIONS

FINDING A REPUTABLE MARINE SURVEYOR ~

A potential boat purchaser has asked Rob the following questions.

I am looking at buying an older sailboat. The question I have is it has a forced air RV heater installed, made by suburban. It is well done but are these type heaters allowed to be used in boats and will it pass a insurance survey. Thank you for your time.

Rob's Reply: