Financing and Insurance for a Liveaboard?

Hey Everyone,

I'm new here, but am soaking up the information like a sponge. This is an awesome community.

Anyway, I'm here because my wife and I are planning on moving off land and onto a boat full time. We're new to the boating world, so I'm still trying to make sense of the process and how this all works!

My questions is this: When discussing with a broker that we were planning on living aboard a boat, he said something to the effect of "don't tell the bank that, or they will never lend you the money"...essentially saying getting a loan and / or insurance for a liveaboard would be difficult or impossible.

Does anyone have experience with this? Is this true?

Thanks in advance!!

Loans and insurance can be more difficult to get with some banks and insurers if a liveaboard. However, others are ok with it, so you may just have to talk to more banks, more insurers, in the process. However, in no circumstance should you ever lie to either about liveaboard or anything else. Don't ask, don't tell is one thing but if there is a box to check or a question asked be 100% honest.

With insurance lying in a policy application has serious ramifications. However, they don't hit until you have a claim. Say you're not living aboard and make a claim for a fire and you may quickly find your claim in it's entirety denied. Insurers don't investigate the truthfulness of your application fully until a claim is made.

BandB said:

Loans and insurance can be more difficult to get with some banks and insurers if a liveaboard. However, others are ok with it, so you may just have to talk to more banks, more insurers, in the process. However, in no circumstance should you ever lie to either about liveaboard or anything else. Don't ask, don't tell is one thing but if there is a box to check or a question asked be 100% honest.

With insurance lying in a policy application has serious ramifications. However, they don't hit until you have a claim. Say you're not living aboard and make a claim for a fire and you may quickly find your claim in it's entirety denied. Insurers don't investigate the truthfulness of your application fully until a claim is made.

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Great feedback, thank you! I agree 100% that I don't want to lie about something like insurance or financing!

I knew a guy who lived in NYC but kept his car registered at his brother's house in SC and had insurance based on his brother's address. Car was stolen. Insurance denied claim. He threatened court and they informed him that getting the courts involved when he had committed insurance fraud (as well as licensing) might not be something he wanted to do.

If this is your first boat and it is large enough to comfortably live aboard, you may have a problem getting someone to underwrite insurance for you due to lack of experience. I would take some classes and get as much boating experience as possible before you are ready to buy so that you can build your boating resume. There are some companies that do underwrite live aboards. You might check out MTOA. They have some agreements with a couple of insurance companies. Good luck.

Insurance as a liveaboard will not be a problem, as long as you are with a marine specific insurer. The bigger challenge will be experience- the carrier may require you the complete a number of hours training with a USCG licensed skipper prior to allowing solo operations, or (in extreme cases) a full time skipper for the first year.

On the financial side- the number of banks declining liveboards has risen in the past few years. I believe that Peoples Banks is still underwriting liveaboards. Credit unions, on the other hand, generally have no problem with liveaboards.

I live aboard a 1942, 83' wood boat with a wood stove, pellet stove and diesel stove and had no trouble with insurance, but you don't go to Geico. Experience or schools with a diploma they can see is the best.
Having lots of sea time and licenses helped, but initally went thru a British company. Later went to Hagarty (https://www.hagerty.com/) because they have a classic policy that covers US and Canada and out 25 miles. They underwrite many local brokers. When I cut across the Gulf of Alaska or tuna fish, it's my risk, but no mortgage. If I sink out there I won't need insurance. Just a sword in my hand and then... Valhalla.

On an old wood boat, you have a very limited market for insurance coverage (outside of Lloyds)- Markel, Hagerty, And, yes, even GEICO.

I know this to be fact, as I underwrite for GEICO.

Well, it puts my mind at ease to know that being a liveaboard shouldn't be a deal breaker in terms of finding insurance.

One other question regarding insurance. It sounds like it's a good idea to get pre-approval for insurance and financing. Is there an especially good way to do this? Is it worth finding an insurance broker to assist? Or is it simple enough to just call a handful of companies and see what they say?

No real magic- your broker should be able to advise you on lenders, or go here:

https://www.essexcredit.com/home/boat/

Or, check with your credit union.

For the insurance side, find a marine insurance broker and work with them. Touch base if you need referrals.

Since you will be land based when you buy the boat, use that address for any applications for loans or insurance. I have never seen a box to check that you are a liveaboard. Then you can move aboard and give the lender/insurer a new legal address like a relative and you will be fine.

As others have said, your boating experience is the important thing in getting insurance as well as where you will cruise. Credit history and the ability to repay the loan are the important things in getting a loan. Liveaboard status is never discussed in my experience.

David

AIG also insures old wooden boats. At least they insure my 1936 woody.

Pau Hana said:

No real magic- your broker should be able to advise you on lenders, or go here:

https://www.essexcredit.com/home/boat/

Or, check with your credit union.

For the insurance side, find a marine insurance broker and work with them. Touch base if you need referrals.

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Thanks! That's great info.

djmarchand said:

Since you will be land based when you buy the boat, use that address for any applications for loans or insurance. I have never seen a box to check that you are a liveaboard. Then you can move aboard and give the lender/insurer a new legal address like a relative and you will be fine.

As others have said, your boating experience is the important thing in getting insurance as well as where you will cruise. Credit history and the ability to repay the loan are the important things in getting a loan. Liveaboard status is never discussed in my experience.

David

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Thanks David, this is excellent feedback!

In regards to boating experience, we are pretty much new. We did take 2 ASA Sailing courses a few years back, and have since joined a sailing club. We'll rent a sailboat a handful of times each year and cruise around Puget Sound for a few hours. But.....

When it comes to bigger boats, or power boats in general, we have no experience. My plan, at the moment anyway, is to hire a captain to spend a few days with us on our eventual boat. My hope would be that after a few intensive days of training on the boat with a captain showing us how it's done, and signing off on our competency.... it will make the insurance company feel better about us taking our boat out on our own.

If anyone has any thoughts on this, is love to hear them!

So not to hijack the thread. But if you are a snowbird and spend 6 months north on the boat, then park the boat while traveling across the country visiting grand kids in the winter and returning to the boat for a few 2 week stays until you depart for the north, are you really a livaboard?

Alaskan Sea-Duction said:

So not to hijack the thread. But if you are a snowbird and spend 6 months north on the boat, then park the boat while traveling across the country visiting grand kids in the winter and returning to the boat for a few 2 week stays until you depart for the north, are you really a livaboard?

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It'll be our full time home, at least for the next few years. We live and work in Seattle.

Alaskan Sea-Duction said:

So not to hijack the thread. But if you are a snowbird and spend 6 months north on the boat, then park the boat while traveling across the country visiting grand kids in the winter and returning to the boat for a few 2 week stays until you depart for the north, are you really a livaboard?

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A lot of different definitions depending on who or why. For instance, a marina may call you liveaboard after more than 30 days or another may not allow you to spend more than 1 night aboard (yes, we ran across one with a 1 night limitation). True marine insurers don't really care, but others have their own definitions and it is similar to banks. If it's your primary physical address then they have issues. The real concern of banks is you not having an attachment to land, not being able to find you or your home. It's more a collection issue than anything else plus a bit of old stigma tossed in.

I would think an insurance company would like a liveaboard situation, as any problem will be immediately noticed.... fire, leak, chaffed dock lines....are all much smaller problems if caught quickly. I suppose the value of the stuff on the boat goes up substantially however..... I'm sure the math works out....their financial models guide all their decisions, and are well thought out.

Unfortunately many marinas and insurance companies view liveaboards as undesirables or squatters

Most of this discussion is about insurance and you need to do your research. For financing you need to be pre-approved before you spend a lot of time on this goal. Yes, you do not know which boat you will buy, but you can do a hypothetical boat or find one similar to what you might actually buy on your pre approval application. Many marine lenders will not finance liveaboards as the collateral could be moved to points unknown. If you own or rent now, they may not lend to you based on the calculation that you cannot afford rent or mortgage plus a boat payment. Financing should be available but getting pre approved will give you facts not dreams. Plus your offer to buy will not need to be subject to financing, only to lenders approval of value.

PNW Jeff

Suggest you arrange a meeting and eventual insurance through Pau Hana. He is the guy on this forum to consult with regarding PNW insurance and live aboard status. Plus he is a good guy!

yachtbrokerguy said:

Most of this discussion is about insurance and you need to do your research. For financing you need to be pre-approved before you spend a lot of time on this goal.

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Thanks for the feedback!

For clarification, are you saying that I should be pre-approved for financing BEFORE seeking out insurance options. Or the other way around?

sunchaser said:

PNW Jeff

Suggest you arrange a meeting and eventual insurance through Pau Hana. He is the guy on this forum to consult with regarding PNW insurance and live aboard status. Plus he is a good guy!

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In my (very) short time on this forum thus far, I have already found Pau Hana to be incredibly accommodating and helpful. He's already helped guide me on where to go to get the ball rolling on insurance.

As a bit of a side note, I am INCREDIBLY impressed with the Trawler Forum community. You all have been a huge help and I truly appreciate it! I'm very much looking forward to contributing and helping others once I have enough knowledge to do so. Until then, you'd better believe I'll be asking y'all a lot of questions! :lol:

Jeff,
Looks like you answered your own question about insurance by contacting Paul. However when talking to potential live aboard boaters, I still suggest at least talking to some marine lenders, or your own bank to get a better idea if you can get a loan. If you can't get a loan and that is the only way to buy, then you could be very disappointed after a lot of effort and a lot of dreaming.

yachtbrokerguy said:

If you can't get a loan and that is the only way to buy, then you could be very disappointed after a lot of effort and a lot of dreaming.

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And you could be wasting the time of the broker. You just didn't say that, but it's a lot of the potential buyer's effort and one or more brokers efforts.

yachtbrokerguy said:

Jeff,
Looks like you answered your own question about insurance by contacting Paul. However when talking to potential live aboard boaters, I still suggest at least talking to some marine lenders, or your own bank to get a better idea if you can get a loan. If you can't get a loan and that is the only way to buy, then you could be very disappointed after a lot of effort and a lot of dreaming.

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Yes indeed, this is a good point. That would be quite disappointing, haha.

I will reach out to a few marine lenders in the area to see if a "pre-approval" is possible.

Interesting thought provoking thread. Im my case, I intend to buy the boat outright so I won't be needing financing. That leaves insurance. Guess I have a lot of reading to do and phone calls to make.

Tinman said:

Interesting thought provoking thread. Im my case, I intend to buy the boat outright so I won't be needing financing. That leaves insurance. Guess I have a lot of reading to do and phone calls to make.

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Check with Pau Hana in post #6. He is an excellent insurance broker.

If the boat is inexpensive enough, if insurance becomes an issue.... go with liability/salvage/environmental insurance only. Much less expensive and to me was easier to secure.

Remember though.... without homeowners or renters insurance, you might not have any kind of liability insurance when off the boat. I had "liveaboard insurance" it but wound up switching it to "fulltimers insurance" when I bought my RV and finally to renters insurance so I could have full time/anywhere protection. I raised my liability from $300,000 to I million for like $3/month on the renters policy.

Also if you sell off all you vehicles, get a "non-owners auto policy"...not having auto (vehicle) insurance even for the shortest period of time can really penalize you if you resume it down the road. The good news is it for me was about $400/yr...but that cost is recouped if you resume owning a vehicle even a few years down the road and makes resuming easier.

We will be keeping our vehicle so that should not be a problem. Although I will admit that I had not considered that angle. Thanks for the heads up!