Boat & Vessel Title Insurance – Protecting Your Watercraft Investment


Just as land titles are subject to registration errors, pre-existing liens and other charges, ship and boat titles can have hidden issues that can be a liability for new ship owners. The best way for buyers of boats, yachts and boats to protect themselves from these responsibilities is to purchase title insurance. Agencies that provide this type of insurance conduct extensive title history surveys to make sure the title of the vessel is 'good'. Vessel title insurance also provides financial protection to vessel owners in the event of a lawsuit or other financial loss due to complications with the title.

Why do powerboats need title insurance?

There are several types of issues that can arise with boat titles. Buyers of ships usually don't know that any of these issues exist – until they're slapped with a property lawsuit or fees associated with prior liens. Insurance agencies hire underwriters and title attorneys to investigate the title chain of ownership in order to uncover these issues – and resolve them – before the sale.

Common issues associated with yacht and boat titles include:

Fraud. Forged or fraudulent documents can arise at any point in the history of ownership. Ship brokers or former owners sometimes attempt to sell ships under fake titles, defrauding both the mortgage lender and the new owner. In some rare cases, mortgages listed in the vessel's ownership history may be shown to be fraudulent. Additionally, personal watercraft can be registered with both the US Coast Guard and the state, allowing vessels to carry more than one "valid" title. Several titles can precipitate several mortgages for which the shipowner can be held responsible.

Property disputes. Even if a vessel owner has a valid documentary certificate and federal vessel registration, he or she may still be the subject of ownership disputes. These documents do not have the ultimate power to determine ownership; only the underlying contract of the yacht or vessel can determine ownership. If the underlying ship title contract is written on fraudulent documents, the buyer's property could be voided.

Pre-existing mortgages or privileges. The new owner of a watercraft is held responsible for all unpaid taxes, unresolved mortgages, and unpaid contract work associated with title to a vessel, even if it was not. aware at the time of purchase.

Personal watercraft buyers may seek an opinion on the title before finalizing the sale. While a good opinion offers some assurance against disputes, opinions and ship title summaries may not always be reliable. Wrong records, incorrect documentation, fraud and human error can cause underwriters to write faulty securities notices. The only way a yacht or boat buyer can protect themselves against these complications is by purchasing ship title insurance.

How does boat title insurance protect me?

In addition to conducting a thorough investigation of the vessel's ownership history before the sale is completed, title insurance companies provide financial compensation in the event of a lawsuit. Ship's title insurance typically covers the cost of legal defense against attacks on the ship's title; In addition, the insurance will compensate for financial or property losses caused by a defective title.

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