Avoiding Warranty Pitfalls

The Devil’s in the Details

By Frank Lanier

A warranty is simply a manufacturer’s written promise to stand behind their product after the sale. Although required by law to state the basics (what’s covered, how long it’s covered for and how it will be corrected should problems arise), boat warranties are different from the terrestrial versions most buyers are familiar with. Here’s a look at four common sense warranty tips every buyer should heed when purchasing a new boat.

1. Read the warranty before you buy

A pre-sale warranty review allows you to verify it actually delivers the service and protection claimed and that it does so for the entire warranty period. For example, the five year engine warranty offered by manufacturers A and B are identical, except for B’s use of the term “pro-rated” (whereas A states its warranty is non-declining). It may seem like a small difference but it’s one that could cost you big money. Pro-rated means B can reduce its liability costs for repairs over the life of the warranty. A’s non-declining warranty coverage is the same on the last day of your warranty as it is on the first, meaning coverage doesn’t decline based on age or use.

2. Don’t assume your warranty covers everything

Unlike your new car, boat warranties are actually comprised of numerous warranties offered by the manufacturers of their various components. Of course, the builder warranties the hull but buyers can receive separate warranties for most anything else, from engines to icemakers. These individual warranties can vary greatly between manufacturers (both in scope and duration), meaning you’ll want to review each one carefully to see what’s covered and for how long.
Some manufacturers offer “bow-to-stern” warranties, similar to the bumper-to-bumper coverage sometimes offered in the automobile industry. This means the dealer will either cover any issue that arises, or coordinate warranty repairs with the various manufacturers during the all-inclusive warranty period they’re offering (typically five years). Not all warranties are created equal, so make sure your definition of all-inclusive matches theirs.

3. Understand the claims process

Start by asking the who, what, when, and where questions regarding your coverage. What’s the process for filing a warranty claim? Are there time limits on claims? Do you return to the original place of purchase for repairs, or use any authorized service facility?
Explore “gray areas” or unusual circumstances that may not be clearly addressed. Can you void the warranty by doing your own maintenance? If the boat has to be returned to the builder for repair, who pays the haul-out fees and transportation costs? That massive oil leak at the generator may be covered by the manufacturer, but who foots the bill for cleaning the bilge afterward?
When making a claim, follow the requirements as described in your policy while ensuring the entire process is properly documented. It’s okay to phone your dealer to discuss a problem and how it will be addressed, but always follow it up in writing. Paper and/or email trails are crucial, not only to confirm that all parties are aware of the issue and in agreement as to how it will be resolved, but also as back-up should a legal dispute arise.

4. Clarify the rules on “transferable” warranties

Builders hype the benefits of transferable warranties (those that can be passed to subsequent owners) as a valuable selling point. However, some have more loopholes and exclusions than a contract with the Devil himself. Make sure you understand the transfer process and documentation requirements, as well as any fees or time limitations in order to prevent voiding this part of your warranty.