The purpose of a pre-purchase and/or insurance survey is to ascertain the actual condition of a vessel, assess the possible risks associated with insuring the vessel or to establish its true value.
Pre-purchase and insurance surveys are not one and the same. As a rule of thumb, a pre-purchase survey will generally be more than sufficient to cover the requirements of an insurance survey, but an insurance survey will not be sufficient to cover the requirements of a pre-purchase survey.
The difference between the two surveys is usually reflected in the additional time and cost associated with a pre-purchase survey. Each survey forms an important purpose, but it is important for a consumer to understand the difference between the two and their requirements when engaging a surveyor.
There is currently no industry standard as to what exactly will be included in each survey type, it will depend on several factors:
- The price the client is willing to pay for the survey.
Some systems or equipment on the vessel may be inaccessible or unable to be accessed within the agreed time or cost of the survey. This should be clarified before the survey commences so the client knows exactly what to expect.
- The requirements of the insurance company
The insurance company may have standard reporting formats or special requests that surveyors must take into account as part of an insurance survey
- Does specialist equipment need to be inspected?
You may request specialist equipment on board such as mechanical or rigging and sails to be included as part of the survey. Due to the specialist nature of these components, there may be additional costs, or you may need to engage a specialist separately to your marine surveyor to assist.
- Is the survey being performed in or out of the water
To allow a full inspection of the hull, the survey will need to be conducted out of the water, but in-water testing may be required of some operational machinery. For a comprehensive pre-purchase survey, a sea trial is recommended to allow equipment and major systems to be tested.
It is vital for all parties to understand the purpose and type of the survey being undertaken, the type of report to be expected and what is and isn’t included before the survey
It is also important the client understand the surveyor’s scope for the type of survey being performed so they can request and negotiate a price for additional inclusions if required.
If you are looking to engage a surveyor, the Australasian Institute of Marine Surveyors has over 500 members from all around Australia and New Zealand.
Visit us at www.aimsurveyors.com.au or call 02 6232 6555.
The Australasian Institute of Marine Surveyors are the peak industry body for marine surveyors in our region. We strive to improve and promote the specialised discipline of marine surveying through the delivery of processes and resources to our members, while providing consumers with sufficient information to make informed decisions when engaging a surveyor.
The Australasian Institute of Marine Surveyors does not accept legal responsibility for any errors, omission or consequences of any action taken in relation to information contained in this article.
Published in print October-December 2022
