Just as record errors occur with real estate titles, hidden problems can arise with existing mortgages and other charges for ship and boat titles, which can pose a danger to new ship owners. The best way for buyers of watercraft, yachts and boats to protect themselves from these obligations is to take out property insurance. Agencies that offer this type of insurance do thorough research into the title history to ensure that the ship’s title is “in good faith”. Ship title insurance also provides ship owners with financial protection in the event of a legal dispute or other financial loss due to title complications.
Why do watercraft need property insurance?
There are several types of problems that can occur with boot titles. Ships buyers are usually unaware of any of these issues until they are beaten with a lawsuit or fees related to past mortgages. Insurance agencies hire underwriters and title attorneys to investigate the ownership of the title to identify and resolve these issues before the sale occurs.
Common problems related to yacht and ship titles are:
Scam. Fake or fraudulent documents can appear at any time in the owner’s history. Shipbrokers or previous owners sometimes try to sell ships under false titles, thereby cheating both the ship mortgage lender and the new owner. In some rare cases, mortgages in the history of ship ownership can be found to be fraudulent. In addition, watercraft can be registered with both the U.S. Coast Guard and the U.S. State, so ships can carry more than one “valid” title. Multiple titles can trigger multiple mortgages for which the shipowner can be held responsible.
Ownership disputes. Even if a ship owner has a valid documentation certificate and a federal boat registration, there may still be disputes about the property. These documents are not authorized to determine ownership. Only the underlying contract of the yacht or ship can determine ownership. If the underlying contract of the ship title is written on fraudulent documents, the property of the buyer can be declared void.
Existing mortgages or mortgages. The new owner of a vessel is liable for all unpaid taxes, unpaid mortgages and unpaid contract work in connection with the ship title, even if he was not familiar with it at the time of purchase.
Buyers of watercraft can get a title opinion before completing the sale. While a good opinion provides some level of security against disputes, opinions on ship titles and summaries may not always be reliable. Incorrect records, improper documentation, fraud, and human error can cause insurers to write incorrect title opinions. The buyer of a yacht or a boat can only protect themselves against these complications by taking out property insurance.
How does the boat license insurance protect me?
In addition to a thorough investigation into the ship’s ownership history before the sale is completed, property insurance companies provide financial compensation in the event of a lawsuit. Legal protection insurance usually covers the costs of legal defense against attacks on the ship’s title. The insurance also compensates for financial or pecuniary damage caused by an incorrect title.
Source by Marjorie Steele