| Just as real estate titles are subject to record errors, | | | | owner can be held responsible. |
| preexisting liens and other encumbrances, vessel and | | | | Ownership disputes. Even though a vessel owner |
| boat titles may have hidden problems which can pose | | | | carries a valid Certificate of Documentation and |
| a liability to new vessel owners. The best way for | | | | Federal boat registration, he or she may still be |
| buyers of watercraft vessels, yachts and boats to | | | | subject to ownership disputes. These documents do |
| protect themselves from these liabilities is to | | | | not have the ultimate authority to determine |
| purchase title insurance. Agencies which provide this | | | | ownership; only the yacht or vessel's underlying |
| kind of insurance perform thorough investigations of | | | | contract can determine ownership. If the vessel title's |
| title histories to ensure the vessel title is in "good | | | | underlying contract is drafted on fraudulent |
| opinion". Vessel title insurance also ensures vessel | | | | documents, the buyer's ownership could be rendered |
| owners financial protection in the event of a lawsuit | | | | void. |
| or other financial losses due to complications with the | | | | Preexisting mortgages or liens. The new owner of a |
| title. | | | | watercraft is held responsible for any unpaid taxes, |
| Why Do Watercraft Vessels Need Title Insurance? | | | | unresolved mortgages and unpaid contract work |
| There several types of problems which can occur on | | | | associated with a vessel's title, even if he or she was |
| boat titles. Buyers of vessels are usually unaware | | | | not privy to them at the time of purchase. |
| that any of these problems exist - until they are | | | | Watercraft buyers may ask for a title opinion before |
| slapped with an ownership lawsuit or fees associated | | | | finalizing the sale. While a good opinion provides some |
| with prior liens. Insurance agencies hire underwriters | | | | assurance against disputes, vessel title opinions and |
| and title attorneys to investigate the title's chain of | | | | abstracts may not always be reliable. Erroneous |
| ownership to uncover these problems - and resolve | | | | records, improper documentation, fraud and human |
| them - before the sale occurs. | | | | error can lead underwriters to draft faulty title |
| Common problems associated with yacht and vessel | | | | opinions. The only way for the buyer of a yacht or |
| titles include: | | | | boat to protect him or herself against these |
| Fraud. Forged or fraudulent documents can occur at | | | | complications is to purchase vessel title insurance. |
| any point in ownership history. Vessel brokers or | | | | How Does Boat Title Insurance Protect Me? |
| previous owners sometimes attempt to sell vessels | | | | In addition to performing a thorough investigation of |
| under false titles, defrauding both the vessel | | | | the vessel's ownership history before the sale is |
| mortgage lender and the new owner. In some rare | | | | complete, title insurance companies provide financial |
| cases, the mortgages in the vessel's ownership | | | | compensation in the event of a lawsuit. Vessel title |
| history may be revealed as fraudulent. Additionally, | | | | insurance typically covers the cost of legal defense |
| watercrafts may be registered with both the US | | | | against attacks on the vessel's title; additionally, |
| Coast Guard and the State, allowing vessels to carry | | | | insurance will provide compensation for any financial |
| more than one "valid" title. Multiple titles can | | | | or asset losses caused by a faulty title. |
| precipitate multiple mortgages for which the vessel | | | | |