Costs of buying,
living and cruising
on a large sailboat

... [If] you purchase a vessel that is under state numbering:
If the state is a title state, the title for the vessel would show the lien from any financial organization.
If the state is a registration state, there is virtually no way to determine if any liens or mortgages exist for the vessel. ...

The benefit of U. S. Coast Guard documentation is the fact that the Coast Guard bill of sale bears a warranty statement that the seller sells the vessel free and clear of any encumbrances and should something ever come up against the vessel this is your legal recourse back to the seller.

Vessels are very odd pieces of property. The maritime law states that liens and mortgages do not have to recorded anywhere to be valid. ...
[Seems to be right; see David Brown's "Secret Liens"]

Our fee schedule for a transaction differs from boat to boat depending on many factors. A UCC search may not meet the needs of the transaction if for example the boat was currently Documented. A UCC search usually costs between $25 and $40 per name per search. If a person had more than one address it would be per address. If there is a fear of a Federal Tax lien then that issue should also be searched. ...

[I asked for clarification of the "A UCC search may not meet the needs ..." statement:]

Once a boat is federally documented it falls under federal law and as such null and void state filings. The reason lenders require documentation over state titling is that if they title the boat, then the borrower decides to document the boat on his own, the bank's state lien filing or title in essence becomes voided. Since there is no higher level of law the federal is always the safest for the lender. Also other nations recognize the federally registered (documented) boat since the national registries are a result of internationally conceived laws that most nations will honor.

I hope this offers you a flavor for the scope of the undertaking. It is difficult to cover all aspects of all types of transactions in a few words. ...

The first fee is for our office to handle the closing, or funds on the transaction. This $350 fee includes lien and ownership searches, preparation and filing of the buyer and seller documents necessary to transfer ownership at the state level, and our company's fees. To have a full UCC/Tax lien search it is $85 per individual. If you decide to purchase a documented vessel and choose to keep it documented there is an additional fee of $350. This includes the Coast Guard Filing fees, our company preparing the necessary documents, and transferring ownership with the U.S. Coast Guard. ...

The abstract of title for vessels ... shows all previous owners who documented the vessel with Coast Guard and any mortgages or encumbrances which may have been recorded against the vessel. It also shows when these mortgages were "satisfied". If the present owner has borrowed funds, this First Preferred Ship's Mortgage will show on the abstract. At that point, we would ask the seller to obtain a "Payoff Letter" from his bank showing the amount it would take to clear the title. Once the bank is paid, they would sign a Satisfaction of Mortgage which we would have recorded.

For almost all locations, it's not *where you buy* the boat, but *where you keep* the boat that determines the tax.

Buy a boat in St Thomas and tie it up in Ft Lauderdale, you pay 6% of the purchase price [to Florida]. Buy the boat in Ft Lauderdale and tie it up in Ft Lauderdale, you pay 6% of the purchase price. Buy the boat in Ft Lauderdale and keep it in St Thomas ... no tax!

...

As far as how long you can stay in one place without attracting the attention of the tax police, that will vary from location to location. Florida is 90 days. Maryland is 30 ...

... MD and VA, particularly, hire a lot of dock walkers who record boat names and hailing ports and then check again to see if they've been in the state over xxx months, which by law makes you a resident of that state, regardless of where you domicile, for the purposes of taxes (a lot of people from PA, WV, NC, DE, even NY keep their boats on the Chesapeake full time). OTOH, we were in MD for over 4 years and because we didn't use commercial marinas they'd never caught on to us before that. It's a toss of the dice. [But very expensive if you're caught.]

Florida is really bad, too. But if you keep your boat hailing port from somewhere else (like Texas, or one of the western states) and keep on the move, you can do pretty well at evading the tax man. The rub comes if you're in an accident, have a long hospitalization, a family emergency, or need extensive yard work and you settle in for a while and get spotted or turned in.

The very best strategy is to go ahead and pay a sales tax / use tax / excise tax somewhere. If you are nabbed, you've got something to wave saying you're not a scofflaw. And if you are fined or taxed or both, they usually reduce it by the amount of tax you'd already paid in another state (although if you paid more in tax than that state would have taken, they never seem to offer you a refund).

Taxes and Residence/Domicile - a primer

This primer is very general, but should give you an idea of what you need to be thinking about when you change your residence/domicile, or when you move about and _don't_ want to change your residence/domicile. ...

The examples I've used are based on personal experience. The legal stuff is based on my experience as a lawyer in the Navy JAGC for 30 years and having to deal with taxes and residence/domicile issues as they apply to an extremely mobile military and civilian population!

There has been so much discussion in the past week about taxes on boats, that I thought I'd put together a little summary of how the tax laws work. Related to the topic is the matter of "residence" and "domicile" so I'm throwing in some info about those topics as well.

Legal Residence

You'd best consult a tax adviser or an attorney who's familiar with this area of the law, but here are a few general rules:

(1) EVERYONE has a legal residence somewhere. Residence is sometimes referred to as "domicile," and although there is a legal distinction between the two, it's not critical for this discussion. (I don't have my Black's Law dictionary with me as I'm writing this.)

(2) You can change your "domicile," but you can't change it to someplace where you do not currently reside. You must have an _intent_ to change your domicile, and you have to exhibit your intent to change when you are in the place you intend to make your "domicile" (if changing from your old one) if you want it to "stick" when push comes to shove with the local tax authorities. On the other hand, if you do *not* _intend_ to change your domicile (when living in a location other than the one you consider to be your domicile), you must avoid doing things which might be interpreted as an indication of your intent to change (for example, you should *never* vote in a state election in a location you do not consider your domicile. (Most big-money legal issues surrounding residence and domicile arise after you're referred to as a "decedent," so by then it's too late to do much to convince the authorities one way or the other!) Examples of not intending to change your residence even after a prolonged stay in one location would be where a person is hospitalized and unable to be moved, or where your boat is subject to some catastrophe that disables it to the point of requiring long-term repairs and you don't have any other form of transportation - both of those situations would result in an _involuntary_ stay in the location, and in the absence of other manifestations of an intent, would not establish a new residency.

(3) Residence has different meanings for different things. For example, states impose their own rules of "residence" for tax purposes - you may have to pay income tax in the state where you reside for a minimum period of time and earn a certain amount of income, even though that state is not your "domicile." States also have residency requirements for voting in _state_ elections.

(4) Various tangible things are evidence of an intent to establish a "domicile." Driver's license, bank accounts, ownership of a home, registering to vote (in a state election - you can vote for President/VP anyplace), titling a vehicle, etc. These things establish your "domicile." They also establish your "residence," but as indicated above, "residence" means different things for different purposes.

Unless you do something affirmative to change your "domicile" it will remain the state where you currently live, even though you might be cruising the ICW, etc. You can keep your driver's license there, vote (perhaps absentee), pay taxes, etc. You can also change your domicile by living in Florida, for example because it has no income tax, and registering to vote, opening bank accounts, paying local taxes, voting, etc - all of which are simply manifestations of your intent to change your domicile.

It's complicated, and at the same time rather simple. You could easily end up with several states claiming that you are a resident there for tax purposes, and more importantly, state inheritance tax purposes!!! It's not something that should be undertaken on a whim - there are far too many ramifications.

If you have a personal situation that requires an answer and big $$$ are at stake, you'd best consult with your attorney or tax advisor who's familiar with this area of the law. Events can be interpreted differently and the legal rules could be different in your state. In the long run, you'll be dealing with the state tax authorities and (the Gods forbid) the legal system!

Taxes

This is a very general discussion of taxes and their consequences for the boat owner, so if you have a real situation, you'd best consult with your accountant or a tax attorney.

States generally impose four kinds of taxes: income, sales, use, and property. There are a few others, such as business taxes, that aren't really germaine to this discussion.

(1) Income tax is imposed on income earned within the state, or by a person who "resides" in the state, wherever earned. (See previous discussion re legal residence.)

(2) Sales tax is imposed on the sale of an item within the state. Generally, the rate is the same no matter what the item within the state, but states may choose to exempt certain items from the imposition of the sales tax, such as food. Other specific types of items may have a specific sales tax imposed, such as the sale of real estate, that is at a different rate from the general sales tax.

(3) Use tax is a tax imposed on items BROUGHT INTO THE STATE upon which no sales or use tax has been paid in any other state. Generally, the rate is the same as the rate of the sales tax.

(4) Property tax is generally an annual tax imposed at a set rate for different categories of items LOCATED WITHIN THE STATE. For example, the property tax on commercial real estate may be different than the property tax on residential real estate; the property tax on cars different than that on trucks; the property tax on boats different than that on cars, etc. Some states exempt certain items, such as boats owned for recreational purposes; others impose a property tax on all boats.

Now that the generalities and definitions have been dispensed with, the real question is - Where are you THINKING of locating? If you have options, you might be able to take advantage of the fact that some states do not have an annual property tax on boats. Other than that, with very few exceptions, you'll have to pay either a sales tax in the state where you buy the boat, or a use tax in the state where you eventually house/keep the boat. While some states don't have a sales tax on certain items (groceries, for instance), they may impose a sales tax on big ticket items like cars and boats. A use tax is sort of a complement to the sales tax. You pay one or the other, but not both, and the tax rate is generally the same for both.

Property tax is a different matter. Some states have it, others don't. Some tax boats, others exempt boats (Maryland, for instance). As an example, I live in Virginia and keep my boat in Maryland. I bought her in Massachusetts. She's documented with the Coast Guard, and I renewed the documentation in my name when I bought her. I did not pay a sales tax in Massachusetts because I knew I wasn't going to keep the boat there and didn't know where I'd eventually end up. I had the option of keeping the boat in Virginia, Maryland, or the District of Columbia, all of which would have about the same convenience factor. Once I chose to keep the boat in Maryland (for cruising considerations), I had to obtain a Maryland "USE" decal by paying the use tax. Maryland does not have a property tax, so I won't have to pay any other taxes there. Had I chosen DC, I would have not had to pay either a sales, use or property tax. Had I chosen Virginia, I would have had to pay the one-time use tax, plus an annual property tax. Coast Guard documentation does not eliminate the need to pay taxes, although some states MAY exempt documented boats - depends entirely on how the legislature decides to handle the matter.

Once the sales or use tax is paid in any state, KEEP THE RECEIPT. No other state SHOULD require you to pay their use tax once you show proof that you've already paid an amount at least equal to or greater than the tax which that state would impose - you'll normally be credited with the tax (sales or use) paid in another state. If you paid less than that state would impose, you may have to pay the difference; if you paid more, normally no tax would be due.

If you are a transient (not staying permanently in any location), you may be able to "get by" without paying the property tax if one is imposed on boats - but you'll need to keep moving. Most states have a time limit on how long the boat can be in the state without paying the sales/use and property taxes. In Maryland, as an example, it is 30 days (sales/use tax only). States with any sort of transient boater traffic patrol their waterways and marinas to try to catch boats who are not in compliance with their local tax laws.

In short, once you decide what your options are, check with the tax authorities, your attorney or tax adviser. Some states have information about their tax structure available through the internet!

I wouldn't advocate lying or "coming up with a good cover story" in any event in order to avoid the taxes. The burden is on the taxpayer to show that the tax isn't owed, once the state establishes a likelihood that it should be paid. There are penalties for non-payment, and interest that accrues at a steep monthly rate!

If you have a personal situation that requires an answer and big $$$ are at stake, you'd best consult with your attorney or tax advisor.

Budget a hundred grand will get you into a [40-foot or so] boat, and give you options. Figure the first's year expenses to be closer to twenty and the second probably the same even if you attempt to control the bloodbath.

Also figure that it is going to take eighteen months to thirty months to go from purchase to ready-to-cruise. This does not mean you won't be sailing, but if you're smart you won't be sailing far.

There are several categories of vessels for sale. One major category are the boats that have passed from current usage to "for sale" and have sat for a while, sometimes years without use, with minimum maintenance. These boats can survey well. I can guarantee with this category of vessel that systems failures are just around the corner and will be beyond what one would expect.

Cruising is like exercise: you may think that you are using all the muscles you need to play tennis but till you actually play tennis you will never know. And invariably when you do finally play you will hurt in places that you didn't even know that you had. Same with the boat.

Personal experience: I once met a couple who were friends and neighbors of one of my students. They had purchased a vessel, nearly fifty feet, some three years earlier. And over the past three years they spent almost every Friday night, Saturday and Sunday working on the boat. They lived about four hours away and drove to the boat each weekend, and many times during the week, to stay on board and fix up their dream machine. They had not sailed much, but they were now at that point and asked me to help. So I agreed, gave them a reading list. Unfortunately, it took four attempts and six grand to successfully make the trip from their slip to the ocean, about three miles. Now this is a boat that had continuous, enthusiastic maintenance for three years. In that first month of our relationship they replaced or repaired: one head, the fresh water system, a transmission, the fuel system, a starter, an injector pump, one winch, and about twenty little items that were not big enough to mention. They were daunted, and expressed their amazement.

The truth ... this is so common that it could be called normal.

Another student in my inventory of stories, full of enthusiasm purchased a vessel, one that had sat for a number of years without use, the boat was in excellent visual condition. This student spent thousands of dollars of his limited budget upgrading systems and putting on the newest toys. At the time, I attempted, to the point of being a nuisance, to dissuade him from spending so much of his commissioning budget so early in the game. He listened to a minor degree and was glad he did. The first six months he suffered some rather large expenses.

This is a common occurrence, spending too much in the beginning.

Another type of common vessel for sale is the "current" cruiser. This a boat that has been actively used and maintained. Unfortunately this vessel type has its own unique elements. Either the boat is loved and cared for in a professional manner and the purchase price reflects this, the boat does not sell, and then the vessel moves into the category of boats which we already spoke of.

Or the owner knows that any excess expenditure is a waste of good money that he will not be able to recoup in the vessel's sale. So, there are a hundred weak points that he knows of and does not share this information.

Perfect scenario:

1. Find a good boat.
   
   
2. Survey it to death. This is the ONLY TIME in your entire boating life that you will be in the driver's seat. This is an opportunity to make the best deal possible. You may not be able to control the price you sell the boat for, or the expenses you will incur, but you can control what you pay for a vessel up front.
   
   
3. Go to the yard with a list of immediate problems and tasks. Stay focused and get out of the yard as quickly as possible. This is important; it is so easy for the boatyard to turn into a bloodbath of expenses. Just one more thing, one more thing, one more thing. My suggestion is to work from a detailed list of items. You will have a number of repairs that you will want to take care of after a good survey.
   
   I would like to expand on surveying a vessel. Like I said it is your only time to be in control. You need to be able to work from a list. To this list you will add a number of items that should be done to any new purchase. Change all the engine and transmission fluids, change all the engine hoses, change all the belts, service all the thru hulls, check every single hose for condition and change if at all suspicious.
   
   Changing hose is more time-consuming than expensive but this will be the only time you have the enthusiasm and probably will be the only time you will ever do this. Most sailors move on to another vessel before they ever get to do this task a second time. Which means that when you do this it will be the first time since the boat was purchased by the previous owner, if then.
   
   Vessels now-a-days have ball valves instead of proper seacocks, which last forever and can be serviced. Ball valves cost about a tenth and last only a few years before dying.
   
   
4. Go sailing ... after the bloodbath of yard time you will need to go have some fun so that you can remember why you have volunteered for such abuse.
   
   
5. You will need to haul again in a year and you will have a list as long as your arm. This second haul out is most important. The first time around you were operating from a position of ignorance, you had no personal knowledge of the vessel. After the first year to eighteen months you are beginning to know your vessel. Her personality, what she likes and what she does not. Her weaknesses and her strengths, what you can adapt to and what has to be changed.
   
   
6. During that first year of sailing, stay close to facilities, you will need to be able to get parts and professionals. Being in Belize with an engine that refuses to run, borders on horrendous. Who needs the stress ?
   
   
7. At the eighteen to twenty-four month mark you should be in good shape. You have survived screwups, fixed about every thing at least once. Know where your weak spots are. Thrown away some of the whiz-bang, can't live without purchases. Realized why the previous owner did some modification that you have spent money FIXING and now are spending more money putting back the way you found it.

Rosy picture? Not quite. Doable? Yes. Worth it? YES.

... I characterize refit as an over-ripe onion. Peel a layer, then cry. Peel another layer and cry again. Eventually you get down to the good stuff. Every project seems to spawn new projects.

...

If you're using contractors to any great degree, count on your expected expenses in a major refit to be not less than triple your (and their - likely it will require a much higher multiple for yours) worst guess, unless they're willing to make firm job quotes vs time and materials - but very few will, other than for cut-and-dried, simple projects (bottom paint on a prepped bottom, e.g.).

Don Casey, the good old boat writer, says the way he figures time on projects he does himself is this: Break each project down into the smallest envisionable tasks. Assign what you think to be a *worst-case* length of time to accomplish each. Add them up. Then apply the fudge factor. His is 3. He says, for him, that usually works out pretty close.

That's for a guy who makes a living writing about keeping up old boats, and does lots of it along the way. So, unlike us, he doesn't have to learn each job (we don't know how to do this well, since we don't do it all the time) and, just when we get the hang of it, move to the next one. Yet, his jobs usually take three times the worst he can figure. For us, it's probably more like a 5 to 10 fudge factor. For contractors, if it's a T&M *estimate*, I think the Casey fudge would probably be reasonable. That is, whatever a contractor thinks it will take, multiply by 3. ...

I still have on the mast a list of stuff which, when Lydia was here last year, in May, and I went home for a couple of weeks, my contractor said would be finished when I got back. Not one of them was finished, when I returned. And, today, 11 months later, there are still several items left on the second list which he said would be finished in June (another month).

...

... if you're not at the job site at least very regularly, nothing happens. ... if you're going to use contractors, plan on visiting the site daily, if not more frequently ...

...

... if you're talking about equipping (vs refitting), you can probably come pretty close in cost estimates.

...

... if we let it, the boat would continue to generate projects, and it would never leave.

Ok, two years ago Feb I bought the boat. I made a list of 16 things that had to be done before we left to see the world in 6 months. The cost would be $15,000 and we would be on our way by July 1997.

Then I didn't retire but stayed on two more years. The list grew to a max, at one time, of 120 things to do. And the cost was approaching "over run".

Now I am planning on a January 2000 departure (after hurricane season). I finally retired in January 1999 and began serious work on the boat. The cost so far is up to $13,000 which is not too bad from my original estimate. The list is now down/up to 48 things to do from my original 16 things to do.

I ran a complete audit of the things-to-do list yesterday and the 48 items will require $6,000 and 112 hours of time. If I divide 112 by 8 I find that working 8 hours a day I can be done in three weeks, yeah, sure. Since I have 7 months left it looks like that will be just about enough time ... #8-)

The total cost will come in under $20,000 so I don't feel too bad. Only a 33% overrun is much better than the government does on most of its work.

Much of the remaining work is little stuff such as purchasing an item to be carried so the time involved is not that bad. Many of the things are convenience items or cosmetics so are not so critical.

The two big costs not yet met are the survey and refurb of the standing and running rigging and the purchase of a liferaft. (The life raft I have now is 20 years old and was last inspected 8 years ago. I expect when we open it we will find garbage.) These two items will run about $3,500. The remaining $2,500 will go for a water maker and a hot water heater and some incidentals.

I am hoping to find a used watermaker and a used liferaft but have budgeted for new equipment.

But not included in my $6,000 budget are a few things that are unknowns as yet, such as possibly a new sail or two and maybe replacing the current head.

I figure when I get the list down to about the original 16 items I will be about ready to go and will finish on the run.

Cheers

[In 1996,] We spent 95K for our '86 Wauquiez Hood 38 and then immediately spent an additional 30K on equipment.

The boat I bought [13 years ago] was a seven year old Cabo Rico 38 in quite a state of misuse as it had sat at the brokerage for over two years. The teak was gray, the gelcoat thick with grunge, the canvas faded. It had gone on the market for $98k, and I bought it for $69k. Today [2000], Cabo Rico's of this size and age sell on the East Coast for $125k. I also bought it the last year that sales taxes were deductible.

That said here's a list of things I've done:
The biggest was painting the mast, boom, and staysail boom, installing conduit on the mast interior for wiring, replacing the rigging, installing a RADAR mount and new tri color light, new halyard attachment, new safety lines for the deck and misc. stuff for $12k plus.
Next came the gelcoat job on the hull for blisters and replacing the foam interior in the rudder for about $10k.
Having someone else do a full seven coat varnish job can be had for just under $5k so I only did this one once.
Gel batteries, monitor, inverter, alternator, and regulator installed is close to $5k
Electric windless installed, chain, upgrade anchors $4k
Below deck autopilot installed $4k
Monitor windvane installed $4k
Liferaft $4k
Dinghy, outboard, hoist for motor, swimsteps between $3 and $4k
Then you get into the new 125% jib, new main, asym. spinnaker, GPS, SSB, EPIRB, roller furling. There's about $10k

Or converting from CNG to propane (new stove and heater, tanks etc).
Dodger and sail covers? did that.
Transmission and starter? replaced
Refrig., head, water heater - replaced
Currently replacing cushions $3k

So - I got a good deal on a basic boat, lived aboard for 13 years and have it ready to retire/cruise this fall.

The dream continues.

Refit costs - wow. I added up the refit costs from the last 2 years since I bought Hope, a 1966 Lecomte Northeast 38. She came with a Yanmar motor, good main sail, Newmar electric panel, and good top side and bottom paint. The total cost for everything (including sandpaper) from thru hulls to standing rigging is $22,000 so far plus my labor. I've done all the work including engine R/B myself. I estimate another $7000 for autopilot, windlass, chain, and little stuff this winter. I still want a water maker and ssb but not until I'm ready to leave on the "big cruise".

... what we have spent in the last 2 years upgrading our boat [1979 CSY 44, bought 2 years ago for less than $100k]. Some things are essentials that were noted on the original survey (such as replacing the cutless bearing) and some are luxuries - I have not attempted to segregate out the luxuries, and the numbers are rough round numbers. Things are listed in order of price, and not in order of purchase or importance.

Max prop (feathering prop) $3600
Autopilot $1700
SSB $1600
2 LectraSans $1400
RADAR (Si-Tex) $1000
Dinghy davits from Kato $1000
2 solar panels ($500 @) $1000
New bimini top $800
Wind generator $800
EPIRB $800
Used non-electric windlass $795
Inverter (sine wave) $700
Upholstery fabric $700 +-
Mast steps, ascenders, etc $680
10 PFDs and rebuilt kits $680
Charts/electronic charts $610 +-
Para-tech anchor $600
Tank tender $600
Sewing machine for sails etc. $600
Replacements for motor mounts $600
1/2 barrel chain rode @290 ft $500
RADAR arch $500
ICOM VHF with hailer etc. $480
Computer nav program $480
SuperMax anchor $450
Portabote - 2nd hand $450
2 GPS $439
Spare starter $390
Wire and hose for Lectra Sans $350
Dripless packing $300
2 binoculars $229
Link 20 $200
2 marine toilets $200
New shaft (original scored) $200
13" color TV-VCR - dual power $200
Spare engine cooling pump $150
2 alternators $130
Cushion for helm seat $125
Battery cable and crimping tool $120
2 strainers $120
2 Fenders $100
Wood for projects $100 +-
Cutlass bearing $90
Stainless plate/stern rail Danforth $80
4 dock lines $80
Exhaust elbow $70
2nd hand VHF (handheld) $65
High level alarm $50
Spare exhaust elbow $40
2 bilge pumps and grey water box $40
2 bearings for roller furler $30

Does not count numerous stainless fasteners, or stuff we already had like a pressure cooker, a climbing harness and 4 batteries, or stuff we got out of the city house when we sold it like a microwave, stereo and CD changer. Bottom paint, repainting the trim, purchase of new name graphics, and books bought for each other as gifts amounts are also not specified.

Adds up to about $25,000; a little over 25% of the purchase price.

We have sold our home; we have sold all our cars. Now, how do we get liability insurance while we drive rental cars? In the past, our homeowners liability umbrella and our auto insurance liability covered us in rental cars.

We can buy insurance from the car rental company. The problem is that it is expensive and limited. For example, insurance on the Ford E250 Cargo van we are currently driving, and will drive to California in mid-July, is $24/day and provides only $50,000 liability. We also have a mid-size Hyundai car rented. That insurance would cost us $77 per week with the same liability limit (the car rents for $140/week).

It has been suggested that we keep our old dead Saab in storage and continue to insure it. That way we would have coverage on the rental cars when we drive them. That option would cost us over $700 per year for insurance and licenses and $500 per year for storage costs.

My insurance broker and two others I have called have said that there is no "broadform" liability available for rental cars if you don't own a car.

How do you other cruisers who don't own cars but do rent cars provide liability insurance for yourselves while in the USA ? (I know my USA coverage does not insure me in Mexico, the Caribbean, etc.)

It has also been pointed out that if we cruise for five years without auto insurance and then try to buy auto insurance we will be assigned to a high risk pool for at least a year, even though we have spotless driving records and no claims since 1991.

Has anyone tried to get auto insurance in the USA after cruising for years without it?

[more ...]

I am only concerned about auto rentals in the USA since very few USA insurance carriers provide coverage outside the USA. When I had a real job I averaged over 100 days of car rentals a year for 15 years. I rented in Africa, Europe, Australia and North America. Since I owned my own business I purchased special auto insurance that would cover me worldwide in any car. That extra insurance only cost me $198 per year but it was tied to my business auto insurance. State Farm will not sell me such a policy if I don't own a car.

I have MasterCharge, Visa and AmEx Platinum and have always used them for car rentals all over the world. I talked to all three companies yesterday and today. They all provide SECONDARY insurance that picks up the deductible and other amounts NOT provided by your primary insurance company. If you rent a car thru either AmEx or Visa or MasterCharge and carry NO primary insurance they will provide comprehensive/collision and a very small amount of liability (less than $50,000 which is totally inadequate). I spent several hours on the phone with them - they are adamant that they provide secondary coverage.

It is not possible to purchase an umbrella liability policy (also known as "broadform" liability coverage) unless you already insure either an automobile or a house. The umbrella policy is tied to the primary homeowners or auto owners policy. An umbrella or broadform is what we want, we have always carried an umbrella on both the car and the house insurance. As I said, I have talked to five brokers or agents while trying to buy an umbrella - I can't find a way to do it!

We have had State Farm for 20 years - they will not provide any insurance if we don't own a home or an auto. I have talked to two larger insurance brokers, to Royal and Sun Assurance, and to Blue Water Insurance. They have all told me the same thing - if you don't have a land based asset that is insured you can't purchase any liability insurance.

The policies that Blue Water brokers only provide liablility coverage for damage the boat causes. If I cause the damage when away from the boat - that is not insured.

Yes, I can purchase insurance each time I rent a car - at a minimum of $10 per day and it provides very little liability insurance.

1. Umbrella policies are designed primarily as excess policies. That is, they pick the next million or more after the primary policy is exhausted. If there is no primary policy you are personally exposed for the first $300,000 or more of any judgement.

2. Credit cards typically cover only damage to the rental auto.

3. Keeping a clunker with coverage on it is an option, BUT your policy will only cover the rental car up to the value, and for the coverages maintained on the clunker.

4. Are there solutions? Not good ones, but:

a. We sell Zurich's liveaboard policy which covers your personal liability as well as the yacht liability. No problem, but expensive.

b. Buy the rental car company's coverage. No problem, but expensive.

From my experience with a Wilderness 40 (Gary Mull, Santa Cruz built, 72-81 PHRF), I would guess you should budget at least $10,000 and probably closer to $20,000 per year for the boat (repairs, systems upgrades, cosmetics, insurance).

Stuff wears out, gets old, gets damaged in use, or needs to be replaced. Sails last 3 years if you really sail, and would cost about $5,000 for a dacron main and a 110% on a furler. Chutes are another $2,200 every 4 years. Rod lasts about 7 years and a rod and turnbuckle rerig is another $5,000. When you replace the rod, you will probably replace or upgrade the furler $2,000. Rebuilding the watermaker is $500 or so every couple years. LP for the decks is probably $6,000, for the hull $4,000, and for the mast $1,500. Heads die, pumps die, autopilots die. Halyards die. You want to upgrade to line adjust lead cars. The cabin sole needs varnish. The interior needs varnish. You want new foam in your bed, and new covers in the salon. The heat exchanger needs to be replaced. The exhaust elbow needs to be replaced. The raw water pump needs to be replaced. All the belts and hoses on the engine and the coolant pump all ought to be replaced. The stainless steel gallery sink pits through from the salt water being used in it and needs to be replaced. You want a new stove. The TV, never designed to be used on a boat, dies. Batteries last say 500 to 1,000 cycles, 3 to 5 years. Rafts cost $300-$500 per year. EPIRB batteries are $300 or so. You need a new awning. The cabin ports need to be replaced. The winches need to be serviced and reanodized. The keel leaks: it needs to be lowered, the bolts inspected, and then rebedded. The anchor windlass self-destructs. You need new Lexan in your deck hatches. You want to upgrade from a folding Martec to a geared folder or a feathering prop. A diver is say $30 per month; a bottom job is at least $1,000. You need to repair water damage to your deck core. The depth sounder stops sounding. The bracket holding the fridge compressor breaks. You are tied up at the end of a dock and the low voltage sensor on your air conditioner does not shut it down fast enough and you need a new compressor. Your fuel tanks are 15 years old and are starting to leak thru pits in the stainless and need to be replaced. I cannot remember whether the J40 uses hydraulics or blocks for the backstay, the vang, the outhaul. Either way, they all go. Etc., etc., etc.

Then there are the inevitable "accidents." Your new LP hull gets massive scrapes from a bumboat. You round down and put the spin pole in the water and need a new tube. ("Let's get a lighter one, like that black one on Steve's boat.") Your dinghy gets trashed at the town dock because someone sandwiches it between the rock wall of the dock and a 20' panga while you are ashore for dinner. Your bimini is blown down in a 60 knot squall, and the same squall mangles your bow roller when the snubber breaks and the chain pulls tight. Some kids are fishing off the dock, and they catch your dinghy, puncturing one chamber and sinking the motor. You are boarded for an "inspection" and the boarders mess up your lifelines and stanchions, oh and by the way, one of them grabbed your SSB whip to keep from falling ("Sir, we are almost done, and if you will just sign this release, you may go on your way ...").

Whatever you do not do as you go along either has to be done when you finish or just lowers the value of the yacht when you sell it.

A guy I know, the chief carpenter on a 100' plus motoryacht, budgets 20% of the new value of the yacht for maintenance each year to keep it "new" (and it stays new). The longer I am at this, the less I think he overstates the real costs. I get similar estimates from the professional captains of sailing yachts (e.g., $60,000 per year to keep up a Deerfoot 2-62, used value about $500,000, and not to such a high cosmetic standard).

Yes, they pay people anywhere from $2 to $15 cash per hour to clean, paint, varnish, sand, and scrub, and they pay the yards and marine specialists to do things. Some of this you may be able to do yourself, but a lot of this you probably cannot, and ought to hire an expert to do so as to not diminish the value of your yacht. (Whatever thoughts I had about LP, I watched a very good painter try 4 times to get a perfect dark blue Awlgrip finish on a Farr 40.)

Your maintenance estimates are too high. If I have to spend 10% of my boats value ($10,000) a year, I will shoot myself. My plan is about $2,000 a year to cover a bottom job every two years and whatever breaks. There might be some surprises but I don't think so. The big cost was getting the boat ready in the first place. I bought it for $52,500 and will have an additional $20,000 in it on upgrades and repairs before I leave. This has been a 3-year project.

I've always thought the "10-15% of boat value for maintenance" was a ridiculous figure. It in no way accounts for an economy of scale. Let's say a 42-48' trawler costs $400K (actually they cost about twice that these days). You would have to perform a major overhaul on both engines every single year to account for the $40K; replacing all the electronics might run you $40K but not every year. You might claim that something costing $40K comes up every year but you'd have to have astoundingly bad luck to string along a series of years like that. I think this 10% figure is probably more accurate for boats that cost under $50K. Sure, larger boats do cost more to maintain, larger bottoms to scrape and paint, larger decks to cover and so on but I think that the actual dollar amounts don't increase at a clean 10% of cost.

The enemy of sails is two-fold: the wind and the real culprit, UV rays.

A full suit of sails for a 40 ft, blue water boat could easily approach $10K-$15K.

If you sail in relatively high latitudes, life of those sails could easily exceed 10 years.

OTOH, sail at low latitudes, say 1,500 hours/year, and those same sails may be rags in 3-5 years.

Assume a worst case of $15K cost and 3 year life and you have a sail cost of $5K/year.

($5K/year)/(1,500 Hours/year) = $3.34/hour of sailing.

BTW, 1,500 hours is a lot of sailing time in one year IMHO.

If you assume 6.68 miles/hour as an average speed, then ($3.34/Hour)/(6.68 Miles/hour) = $0.50/mile.

Sail from San Francisco Bay to Cabo, say about 1,400-1,500 miles, you will have depreciated your sails about $750.

The numbers are quite variable; however, they serve to illustrate the point.

From the day something is created, it starts the inevitable march to the junkyard, and that includes us.

$10K-$15K ??? Absolutely custom made new sails? Maybe.

I can buy a slightly used but serviceable mainsail for my Coronado 35 for under $1000 any time I want. I've been quoted the price by 3 different used sail sources.

I am never going to buy a new sail to depreciate it'd first 59% in the first year anymore than I bought a new sailboat.

So let us recompute the costs.

Let's say I spend a whole $2500 (main and jib only - I ain't flying no spinnakers :-) )

Let's say they last 2 years (I think you are all wet here, too many letters from too many people out there in the tropics. The main cause of sail loss is damage from too much cloth in too much wind.)

So I amortize $1250 over the 1500 hours (never gonna happen - I'm WAY too lazy to sail that much!) at a more realistic 4 knots. I think I got about $0.21 per mile? Maybe my math is bad, or is it really that much cheaper than fuel?

And, as I said, most letters I read from people cruising from Mexico to the South Pacific describe blown-out spinnakers, not mains, usually caused (by their own admission) by carrying the spinner when they should not be doing so (overnight in deteriorating weather).

I'm still using the original sails that came with my boat, a Whitby 42 built in '77. I have had a few repairs made, but the cost of repairs is "in the noise".

I'm about to replace these sails and the price of three sails (main, mizzen and jib) is $3259. Amortize that over 26 years and sail cost is insignificant.

> How much does a non-business mailbox cost ?
Small $10/mo; medium $14/mo; large $19/mo. ALL have a 3-month minimum and a $5 non-refundable key charge.

> What will the mailing address look like ?
Street address with # ---

> Will DMV accept such an address for getting a driver's license and car registration ?
Yes, because it's a street address - also good for accepting UPS and Fed-Ex packages during the day.

... three years later, I've paid more in storage fees than the price of buying all new belongings. I've also forgotten what's in storage. That's how much I miss the stuff.

Down most of the Atlantic coast, transient rates for dockage (per night) vary from $0.75 per foot to $3 per foot, depending upon location, and to a lesser extent, services. Weekly rates are about 75-85% of what you would pay on a per- night basis, and monthly rates are often a great bargain, commonly in the $5 to $20 per foot per month range.

Annual rates, including in-water storage during summer, and on-the-hard in winter seem to be from $900 per year to $5000 per year.

Mooring (as opposed to dockage) is usually even cheaper, often $15 per night for transient. Unfortunately, I am not thrilled at the idea of leaving my boat unattended at a mooring, so I usually don't look for a mooring if I have to leave the boat for a while. Also moorings available to transients are much more rare than slips.

Anchoring is free, and the most fun. I try to be at the dock if I have to leave the boat unattended, for working on the boat, or in very bad weather.

...

It pays to shop around. I have almost always been able to find slips and moorings at the low end of the ranges described, cos I'm naturally cheap. Skipper Bob puts out some excellent publications describing costs of boating along the Atlantic coast. Get one at any good marine bookstore. I have used them with great success for frugal cruisin.

...

> What is the average charge, per day/week/month/annual, for a mooring?

We have used a transient mooring several times and it was $15/day.

A notable moorage was at the 79th Street marina where for $15/day NYC was our playground.

> When you are anchored or using a mooring buoy, I realize there is often a
> dinghy docking fee at a marina. Is free docking ever available?

We have cruised from Key West to Maine. Key West dinghy dock was $2.50/day, $15/week, $45/month. St Augustine was $7/day, $120/month. Norfolk Waterside at ICW mile zero was $2 day the first year, free the second year, and $2 the third year - guess it depended on who was on watch. Everywhere else was free and varied between town docks, restaurants/bars, and Annapolis, where by local law every street that ends at the water is a free dinghy dock. We love Annapolis.

I presume that if you pay for a mooring that includes dinghy dock.

> When paying a mooring or dinghy docking fee, does this fee include use of
> marina shower/laundry/etc services?

Key West and St. Augustine had head/shower/laundry included.

The city of Key West has recently began a mooring area for about 150 boats. The cost will be $150 per month the first year, $250 in year 2 and $325 in year 3. After that the price will rise based on the CPI. Transients will be charged $12 per day. For this price you get the mooring, dinghy dockage and 3 pump outs per month. Though this sounds good on its face, the down side is there will be no more liveaboard or anchorage in the sea plane basin which is now home to lots of boats and liveaboards for FREE!

I just spent a week doing a marina tour on the Florida gulf coast. I visited marinas from Bradenton to Naples. The average price was $10/ft +/- electric plus $100 - 250 for liveaboards / month for a 40' sailboat. Most of these included such amenities as laundry, showers, pool and sauna or jacuzzi, some even had workout facilities. Every marina I visited allowed liveaboards, although not all of them had slips for a 40' boat.