Living Aboard

Is your houseboat nearing the time when you must buy or renew extended warranties? As a liveaboard you can’t afford to have your floating home out of commission. However, if you’re also cruising and are a stranger everywhere you go, making a big investment requires extra caution and research.

Around the nation, state attorneys general report that extended warranties are high on the list of complaints they receive. Before you shell out big money, keep these tips in mind.

            * More than half the 50 states allow people a cooling-off period when they can change their minds after signing a contract or lease. As a cruising liveaboard, you can’t know every law of every state, so find out how long you have to cancel the deal or change the terms. It’s smart to have a lawyer read the contract, especially one who understands marine lingo.

            * Don’t buy new warranties until you review what you already have.

            * Things get confusing when it comes to what repairs and spare parts are covered and how they are covered. For example, one part failure leads to a more catastrophic failure, but you are covered only for the cheap part, not the big repairs that came later. Or, a part is covered, but not the labor. Or, the part is covered but you have to air-freight it to the Outer Hebrides for repair. 

            * According to Kiplinger’s Personal Finance magazine (12/09), dealer profit for extended warranties is about half the retail price. Shop around. Try asking for a discount.  

            * Look too at the deductible. A high deductible is a plus because it keeps the cost of the warranty down, but is the deductible per breakdown or per component?  Let’s say a series of failures leads to a transmission melt-down. If you have to meet the deductible for each part that gave way, you’ll still have a big repair bill. 

            * Is the warranty according to hours on the engine or generator, or is it measured in months regardless of how little you use the machinery?

            * Does the warranty require you to pay for repairs, and then submit a bill? You could be in for a long wait.

            * Does coverage include towing? All the way to the repair yard or just to the first available safe harbor?

* Know company names, then check with chambers of commerce, Better Business Bureau and other authorities to see if the company has had complaints filed against it. The deal probably involves the retailer who simply sells the warranty and another company responsible for paying claims. 

            * Does the warranty specify an hourly rate for labor? If trouble hits when you’re cruising a high-priced part of the country, you pay the difference. 

            * If you sell the houseboat will the warranty go with it? It could be an excellent selling point.

            * To keep a warranty in force you probably have to prove that you held up your end of the bargain by keeping strictly to the maintenance schedule: inspections, fluid changes, replacements, re-coatings, haul-outs, etc. Keep scrupulous records including your receipts.

            * Is the company that holds your warranty headed toward a financial shoal? Pulling a credit report on a company costs several hundred dollars but you can learn a lot just by doing a Google search for the warranty company by name, plus key words such as financial health, credit rating, rumor, scandal, litigation or bankruptcy. This will bring up references in magazines, newspapers and blogs to that company, its parent company, holding company and so on.  

            * As a liveaboard you need freedom to roam. How restricted are you in choosing a shop that will do the warranty work?

            * While researching this column I heard from two angry boat owners. One was stranded when the boat manufacturer went bankrupt. He simply ate the loss. The other went straight to litigation as soon as he noticed osmotic blisters in his fiberglass. He was $12,000 in the hole with no end in sight. It appears the company will fold anyway. Sue only as a last resort and only if you’re certain the company has assets. Even if you win the case you may not be able to collect.

In this troubled economy, honest dealers have sold what turned out to be worthless warranties, and perfectly honest warranty companies have gone bankrupt despite their best efforts. Be a wary shopper.

About the Author

Gordon and Janet Groene lived on board full-time for ten years. Their books include Creating Comfort Afloat and Living Aboard. Contact Janet at www.BoatCook.blogspot.com.