Originally Posted by Kawini
I am buying a boat from a gentleman who will carry a small loan for about a year. As a condition of this short-term financing, he is requiring that I maintain appropriate insurance coverage until the loan is paid. I find this totally reasonable, and would have of course insured the boat in any event.
The wrinkle is that the seller is -- for some reason -- requesting that I maintain "liveaboard insurance" on the boat. I live in New Mexico, and I plan to cruise the boat throughout the PNW for 4-5 months/year. For the remainder of the year, the boat would be alone in its slip with occasional visits and short cruises. My understanding is that this is not "liveaboard."
Can someone out there in the insurance industry (looking at you PauHana) clarify for me what constitutes "liveaboard" status insofar as insurance is concerned? Does 4-5 months recreational cruising constitute liveaboard status for purposes of insurance?
For your lienholder, the only stipulation should be that you carry Agreed Value coverage with him/her named as the lienolder. This will ensure that, in the case of a total loss, the lienholder is made whole (the note is paid off, and any remaining funds will come to you).
Liveaboard coverages/endorsements generally extend the following coverages from onboard/while loading or unloading to anywhere in the world:
- Personal Effects
In essence, this replicates the coverages of an HO-3 policy (standard homeowner's policy).
As a general rule, we (agents and underwriters) look at liveaboards in this way- your primary residence is aboard your vessel year round. For your situation, I see you as a seasonal cruiser, and (since you have a primary residence elsewhere) would have no need to offer you any liveaboard coverage.
I'd be happy to speak with your lienholder if you'd like.