The Boat Insurance Mystery, Unraveled!

The Boat Insurance Mystery- Unraveled!

For some, boating’s a pastime; for others, a way of life.  No matter why you boat, everyone knows one thing- it’s EXPENSIVE!  Being prepared and educated prior to a loss can help save a lot of aggravation as well as your investment.  Many people found this out the hard way after Hurricane Sandy devastated their personal belongings, and their insurance company pulled out a magnifying glass to discuss their policies details and fine print.  Needless to say, thousands of boats were left stranded because they were not properly insured and the owners could not afford to repair of even salvage them.

Boat insurance: do you HAVE to have it?  It depends on the state.  Should you have it? Do you want your boat to float?  I think we can agree the answer to both of these questions is YES!  But why, what kind, and how much?  We are here to help decipher the nuts and bolts of your insurance contract and help you choose the best insurance to suit your specific needs.

Let’s start with the basic, yet often confusing terms in a policy:

  • Boat- For most insurance companies, a boat is classified as 26’ and under
  • Yacht- For most insurance companies, a vessel 27’ and larger
  • Boat Liability Insurance- The maximum amount of money your policy could pay to help cover the expenses of injured third parties outside of immediate family, as well as property damage other than your own.  Policy limits are generally stated in an XX/XX/XX format.  For example, 20/40/20 means $20,000 is the max payment for any one injured person the policy holder is liable for; $40,000 is the max payment for all people injured in any one occurrence; and $20,000 is the max payment for property damaged as a result of an accident or event.
  • Actual Cash Value- The cost to replace damaged property, less the deductible, minus depreciation and wear and tear.  For example, if your 2001 Bayliner is damaged beyond repair and had a value of $5000 before the accident, you would most likely receive $5000 (less deductible), and not the $15,000 it would cost to replace the boat.
  • Agreed Value- A predetermined vessel value.  Should your boat be damaged beyond repair, you would receive the entire agreed value of the boat (less deductible), despite the boat’s age or wear and tear.
  • Replacement Cost- The cost to replace damaged parts (less deductible).  In the case of a total loss, a replacement cost provision would replace your boat with a new boat.  Generally this option is typically limited to the first year of ownership and then would switch to Agreed Value or Actual Cost Value.
  • All Risk Policy- This is the “cause of loss” provision which most policies are written.  This means all damaged to the boat is included (after the deductible is applied), unless specifically mentioned in the exclusions.
  • Navigational Limits- These are specific limits as to where you can use your boat.  Be sure to discuss your this information with your agent or underwriter as some policies have detailed navigational boundaries and may only provide coverage in your home state or within limited coastal waters.
  • Lay-Up Discount- For those who live in winter climates where your boat will not be used for a portion of the year, some policies offer discounts if your boat is winterized and stored.
  • Deductible- Portion of a loss the policy holder is responsible for prior to payment from the insurance company (where applicable).  This could be a flat amount or in the form of a percentage of the policy.

Now for the really confusing part- What do I actually need and where should I start?

To begin, insurance companies generally define boat insurance as Marine Insurance or Hull Insurance.  As one insurance company explains, it is the “accidental, direct physical loss or damage to the boat and equipment as well as salvage charges.”  Equipment could include sails, machinery, electronics, furniture, dinghies, outboard motors, and other equipment normally considered necessary for the use of a vessel.

In general, most boat insurance policies are “All Risk” policies which means all damage to the boat is included except for specifically excluded perils named within the policy.  These exclusions may include general wear and tear, weathering, mold, blistering, design defects, and animal and marine life damage.  It may or may not include machinery damage exclusions, depending on the specific policy.  There are a few variables that will also affect your policy, such as horsepower and type of engine, intended use, planned storage, and expected operators.

If you are new to owning a boat, there are a few questions you’ll want to ask your insurance agent or underwriter:

  1. Is this an agreed value or ACV policy (and make sure you understand the difference)?
  2. What are the deductibles and how will they apply at the time of a loss?
  3. What are the navigational boundaries of the policy?
  4. What if someone else drives my boat and has an accident?
  5. What is covered while trailering the boat?
  6. Are there any medical payments?
  7. Is boat insurance mandatory in my state; if not, would it be wise to purchase coverage for uninsured/underinsured boaters?

You will also want to find out the company’s coverage for the following:

  • Personal effects and unattached equipment coverage for items such as fishing or diving gear
  • Fuel/environmental damage and salvage/wreckage removal
  • On-water assistance
  • Uninsured/underinsured coverage for bodily injury
  • Specialized coverage for highly valued items on the boat
  • Consequential damage (for wear and tear, rather than an accident)

There are a few things you can do to help keep the cost of insurance down.  Many insurance companies offer discounts for boating safety classes.  These classes are offered in most areas by The US Coast Guard Auxiliary and The National Association of State Boating Law Administers, and are usually free.  You may also qualify for a discount by having your boat inspected by the USCG Auxiliary, which is also a free service.  Some insurance companies also offer discounts if your boat is only used in freshwater, or you bundle your boat, auto, and home insurance with the same company.

Ask your boating friends, boat dealers, and local marine financiers who they recommend and if they have had any personal experience dealing with claims.  A personal reference is a great way to ensure you will consider aspects that effect your marine insurance policy for your specific needs.  Finally, always consult with an insurance professional who is familiar with marine risks for that area to make sure the exposure and your asset is properly insured.

And Boat ON Friends…

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Best Places to Own a Boat!

With the recreational boating industry topping $121 BILLION in 2012, its obvious that Americans refuse to let go of one of our favorite escapes.  Here is a list of the top 10 states, ranked by economic value, along with a “no-miss” opportunity in each!

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Boat Green!

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Take Green to the Water!

Going Green isn’t just something that California residents do these days.  It’s a universal way of life and can be applied to everything we do.  However, rarely do we think about it on the water as we are loading our beer and rods onto the boat during a beautiful summer day.   Here are a few tips to help keep you green this summer so that our waterways and marine life will be around for generations to come.

 Oil and Fuel Pollution

Oil and fuel pollution is probably the most commonly contributed pollution we as boaters are guilty of.  Most of the time, we aren’t even aware we are doing it.  In fact, every year Americans alone spill, throw away or dump out more than 30 times the amount of oil spilled in the Exxon Valdez Disaster in Prince William Sound.  There are a few things you can do to ensure you are not part of the problem:

  1. When re-fueling your boat, use an oil absorbing pad to clean up any drips or spills.    A great option is the Chadd Padd- a reusable pad that minimizes fuel pollution into our waterways.  At only $9.95 for a 6pack, there is no reason not to have them handy.  They can also be used as a drip mat in the bilge before pumpout or when working with hydraulic fluids.
  2. If you change your own oil, make sure to use a closed system such as a portable oil-change pump and again, have your oil absorbent pad handy.  Make sure to recycle your oil and filters or dispose of it properly.
  3. Do not overfill your tank.  Its recommended to only fill to 90% so that there is room for expansion of the fuel as it warms and to minimize the risk of overflow.
  4. Use oil absorbent pads in your bilge and under your engine and be sure to check them often.  When full, be sure to dispose of them in the hazardous waste containers.

Cleaning

Every boat owner knows the importance of cleaning and maintaining your boat to get the most out of it.  It’s important to take that same care when thinking of our waterways, in order to get the most of them as well.

  1. If you can help it, minimize the cleaning you do while on the water.  If you stow your boat in the water this is obviously more difficult, but if you dry dock your boat- make sure to wait until you pull it to start cleaning it to avoid harmful chemicals and byproducts flushing back into the water.
  2. Only use biodegradable cleaning products and those specifically designed for the environment and boating.  Although dish soap works well in your home, it is toxic to marine life and attaches to fuel which causes it to sink to the waters floor.   Companies are now using more organic based products such as baking soda, vinegar and citrus which work better than traditional chemicals and do not cause harm is washed into the water.   If the bottle suggests wearing gloves, it’s probably a safe bet you don’t want to swim in it later.
  3. By maintaining your boats hull and minimizing the growth on the bottom, you increase fuel efficiency as well as decreasing the work your engine is expected to perform, thus extending the life of the motor.

 Reduce, Reuse, Recycle!

We’ve been hearing this for years- it’s time to bring it to the high seas!

  1. Reduce fuel consumption by keeping your hull clean, driving at slower speeds, properly using trim tabs, minimizing idle time, plotting your course ahead of time, and ensuring your boat is properly fitted with the correct equipment for load size.
  2. Reuse products as much as possible.  Keep rinse buckets on board to avoid wasting fresh water, invest in reusable towels for cleaning up messes, use refillable water bottles and jugs, reuse filters, and recycled oil.
  3. Recycle!  So many of our everyday boating items can be recycled yet we rarely take care to do so.   Monofilament fishing line not only gets tangled in your prop, but kills marine life.  Plastic bags are eaten by hungry Sea Turtles when they are mistaken for jellyfish.  And we have all seen the picture of the turtle who got caught in a 6pack plastic ring holder.  Clip each section, tie plastic bags in a knot and bring everything to recycling units.  Marinas has started to take action to help protect our environment so look for recycling bins when you stop!
  4. Being a “Plus Oner” means coming back with everything you took out PLUS something someone else left behind.   Make sure you tie down anything loose that could blow away or fall overboard.  Stow your trash.  Don’t throw anything into the water.  Cigarette butts are the most prevalent marine litter found during coastal cleanups.

Ultimately there are a million different things we can do to become greener boaters.  Although ideally we would consider the environment with every action of every day, if we can just start with a few things until they become native, and add as the season goes on, we’ll have pristine waters and flourishing marine life for years to come.  For more information on how to be green, check out the following site: http://www.oceanconservancy.org

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What Sandy Means to Boaters

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Sandy’s Aftermath

We all know about superstorm Sandy.  We’ve seen the pictures.  We’ve heard the stories.  A lot of us have probably felt the effect and are STILL feeling the effects of the devastation.  It will take years and billions of dollars to restore all that was lost in her aftermath, and even then, some things will never be the same.  As a boater though, what does that mean for us?

Well there is always the obvious hundreds of thousands of boats that were damaged and destroyed by high winds, flooding, rain, looting, and lack of adequate preparation.  If your boat was tied down really well, it may be been flooded.  If it wasn’t tied down well, then it probably ended up on top of another boat.  If it was dry-docked, the building probably crashed down on it.  If it survived the storm, it was probably a victim of theft.  There’s no shortage to the stories we’ve heard about the loss people have experienced.

Then there is the insurance headache and surge of boat sales.  When you were finally able to get to or find your boat, you had to deal with the insurance companies and claims.  Take photos.  Document what was on the boat.  Provide evidence of what is missing off the boat.  Work with already overwhelmed and exhausted agents who are trying to get homes for people before replacing your “toy.”  If you were lucky enough to have everything handy and get it in early, you may be holding on to a nice chunk of change and contemplating a new boat purchase.  Which brings us to our next set of issues.

A huge increase in the resale of salvaged boats!  Many people are fixing up the boats and trying to resell without documenting the boats damage.  A little bit of fiberglass and some good cleaning agents and the boat is looking better than new.  However, underneath everything, the stress cracks grow bigger, the mold continues to build and the integrity of the boat continues to slip away.  How do you know if the boat is worth what it’s being sold for?  How do you know it’s safe?  How do you know it hasn’t been flooded?

And if you get past all of those hurdles, what will you do differently with your boat this time?  Will you store it in the water?  Will you dry dock it again?  If you are going to dry dock it, where?  Many of the marinas and storage areas have been destroyed and they have made the decision NOT to rebuild.  If they are rebuilding, it’ll be a while before they are ready for more boats.

And lastly, where did all of the debris go from the storm?  Oh that’s right- into our waterways.  Is it even safe to boat in the area right now?  Have they been able to clean up the oceans/lakes floors?  What submerged item will you hit?  What contamination is in the water that could cause harm to your family if you are swimming or fishing?

Typically following a storm like this, boat sales increase significantly as people whose boats survived the storm try to sell and people who have insurance checks try to upgrade.   The remainder of this year might be an extraordinary time to buy a new boat because there will be a surplus of them on the market.  And just because a boat has been swamped or considered a salvage does not mean the boat should be not be considered.  These days repairs can make a boat better than new!  Now is definitely the time to buy a used boat.  You’ll get a much larger boat, or better manufacturer than if you tried to buy a new boat.  Just make sure you are taking every precaution to ensure that the boat you are looking at is safe for your family and friends.  Do the research.  Ask questions about the history.  Run a Boat History Report on it.  Get a NAMS certified surveyor to inspect it and inform them that the boat may have been a storm victim.  As long as you’re smart about your purchase, you could end up with the deal of the year on the gem of the sea!

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Four Sites Making Waves for Summer

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Four Sites Making Waves for Summer

There are a million different boating sites out there for all of your needs.  We found 4 must have sites for this summer though- and we promise you won’t be disappointed!

A new up and coming business that we’ve all been waiting for is BoatsGo.com.   With all of the daily deal sites out there, it’s about time someone created one specifically designed for boaters!  BoatsGo does just that, offering deals on products, services, labor and events (http://www.youtube.com/watch?v=MMSL4mLjwtw).  BoatsGo is just getting started in South Florida but is rapidly working on expansion. BoatsGo creator, Stephen Munive created the site because  “Boaters are very passionate and social. And, since boating is not an inexpensive hobby, most boaters are always looking for a way to save some money, so they can spend more time on the water.”    As a bonus for Boat History Report members, they are offering a special $10 credit to your BoatsGo account when you sign up. Use the promo code (BHR13), which is good towards purchases on BoatsGo. Register here to take advantage of this offer: http://boatsgo.com/user/signup.

Why do we like it?  With all of the costs associated with boating, a little break here and there is much appreciated!   You never know what deal you’ll see come through the website!

Another website you’ll want to check out is the Alliance.  A nonprofit company, the Alliance was formed through the collaboration of 6 individual marine companies looking to make boating safer for all.  They make it easy to get updated chart information and connect with the people that can help.  One particular partner in the Alliance, OceanGrafix, is one of the leading providers of marine navigation charts and works closely with NOAA to ensure every chart is up-to-date at all times.  One of the most critical items for any boater, especially with the influx of debris littering our waterway floors from storms and runoffs, is an updated chart of your planned course.  This is an ESSENTIAL FIRST STOP when preparing for boating season this summer.   Updating your charts can save not only your boat, but your life as well.  Please make this a must before hitting the waves.

Why do we like it?  We all have that friend that still uses paper charts from 1973 but it’s time to frame and display the ole paper page.  Besides, we don’t want him missing out on buried treasure from 1984!   Let’s keep him, as well as ourselves a little safer on the water.

If you are in the process of buying a boat, there are a surplus of classified sites at your disposal.  One of our favorites is BoatingBay.  Founded in 2006, Christopher Bailey has quickly made BoatingBay.com one of the largest networks in the USA with over 60,000 boats for sale.   With prompt customer service and ease of use, the site provides fast, easy and FREE ways to search for new and used boats.  The site is also optimized for the iPhone, iPad, and Android devices which is ideal for people on the move.  If you are shopping for a boat in your local area, the “Quick Boat Finder” automatically and quickly finds boats for sale based on your physical location without having to waste time manually inputting your information.  Also, for Boat History Report members, BoatingBay.com has offered a free boat listing by simply logging in under www.boatingbay.com/bhr.  Definitely a great one stop shop for quick and easy boat research.

Why do we like it?  BoatingBay.com has unparalleled customer service and ease of use.  The site is clean and everything you need is incredibly easy to access.  We love the drive and determination from Mr. Bailey that has quickly made this one of the best sites on the market.

Once you have found your perfect boat on BoatingBay, how do you know if you’re getting a good deal or not?  That’s simple-  NADAGuides.com.   NADAguides is known for its comprehensive pricing guide, offering a wide range of data, products and services, informational articles, tips and advice and video buying guides.    Whether it’s a private seller or a Brokerage/Dealer, NADAguides serves to give you a great starting point in your negotiations.   As the leading provider of vehicle pricing and services, NADAguides should be an essential step in your decision making process, also giving you an idea of how well the boat will hold its value through the years.

Why we like it:   We have worked with NADAguides.com since we first began and have enjoyed their level of professionalism and integrity.  They are the best site out there as far as pricing guides and are definitely a go-to on our list.

It’s summer- get out there and boat!

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Tow Tow Tow Your Boat!

If you plan on towing your boat in and out of the water, having the proper trailer is essential.  It’s like having the proper tires on a car in the snow or on a racetrack.  If you don’t, all sorts of things can go wrong.   Buying the right trailer however is not determined by the amount of frills and bling it adds to the road but rather by a proper fit, working parts and secure hookups.  This article will give you a basic outline of things to consider when purchasing your boats “wheels.”

  1. Will you need a bunk or roller trailer?  What’s the difference?   A bunk trailer is designed for loading and unloading boats in deeper water and will need to be backed fairly far in to load your boat.  It is generally the more affordable type of trailer and is a bit easier to drive on. It is also very easy to float on, due to the deeper depth of water.   Typical reviews also suggest that bunks are easier to center your boat and provide excellent support for longer trailering distances.  A great brand, especially for salt water use, is Float-On Boat Trailers.  They have recently added waterproof lighting which really illuminates the boat both on the road and while loading and unloading.  Roller trailers are preferred for launching and trailering in shallower waters.  These trailers are designed for easy loading without having to submerge the trailer axels, and if properly adjusted, offer very easy drive-on drive-off capabilities.  They work well in all tide stages and distribute the boats weight over many points.    Shoreland’r offers a large selection of roller trailers for all sizes and is a very reputable company.  Make sure you check your boats warranty however- some manufacturers will void the boats warranty if a roller trailer is used as it can dimple the hull.
  2. The second step is determining the length and weight of your boat for your trailer needs.  You want to error on the side of too big and strong over too small.  When considering the weight of your boat, remember to add the motor, fuel, water, batteries, gear and accessories and not just the hull weight.  Also consider your vehicles towing capacity as the weight of the trailer and fully loaded boat can add up quickly.  As far as the length, you’ll want to include the bow pulpit if your boat has one, but do not include the swim platform.  The trailers support ends at the hulls running surface.  A general rule of thumb is to purchase a trailer 2 feet longer than your boat hulls length.
  3. Look for a trailer with larger tires.  The larger the tire, the longer the life of both the tire itself and the wheel bearings due to less rotations.
  4. Although not all states require trailer brakes and lights, it wouldn’t be wise to not have them.  Any added protection for the motor and back end of your boat is a must.  Ensure they are designed for boat trailers (in other words, make sure they are waterproof and sealed) and check them regularly to ensure they are working properly.  The additional brakes for your trailer will help keep not only your boat safe, but you safe, as well as the other drivers around you.
  5. Type of material used for the trailer is another thing to consider- If you will be using your boat in saltwater, you should only be considering aluminum or stainless steel.  Anything else will rust so fast you’ll be lucky to use it an entire season.  When I say aluminum, be sure to inspect ALL parts of the trailer.  Another option would be hot dipped galvanized steel but these can become very heavy.  Again, don’t forget to consider your vehicles towing capacity when determining which type of trailer to purchase.  Don’t go with a 3 axel if a 2 axel will do- less is more in that respect and makes maneuvering in tight spaces significantly easier.
  6. There are a few add-ons you should consider if the budget allows for them.  Load guides will help you center the boat on the trailer.  A transom saver reduces engine pressure by adding additional support.  As we mentioned earlier, waterproof lights that run the length of the trailer, although not providing functionality per se, do provide pride and FUN!  A spare (or two) trailer tire is a great thing to have available as it is not safe to leave your boat and trailer on a jack road side while you drive miles to get a new tire.  You may want to add a complete correctly sized hub if space permits.

Boating is an expensive hobby but well worth it if you are prepared.  Make sure you don’t neglect the trailer- it can literally make or break your day on the water!  I hope this article gave you a bit more insight on what to look for.  As always, speak with your boat manufacturer as well as a rep from the trailer companies to ensure you get the proper trailer fit and type for your boating needs.

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Are You Cruisin’ For A Bruisin’?

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The groundhog missed his shadow- SPRING IS ON THE WAY!  Some people see picnics.  Some people see flowers.  And if you’re like me, you see boats and fish and beer and sunblock and any other number of things to do on the water!  But… lets rewind for a minute before we take off cruisin’- is your boat even ready for its glorious reunion with fresh air and wakes?  Read on to find out!

Of course you read our winterizing article so the answer to the above questions is YES (with just a few touchups of course).  What’s that?  You didn’t?!? Well, we hope you enjoy the embarrassment of loading your boat with friends, beer, and toys, while sitting docked and hearing nothing but the sounds of the working boats around you.  Thanks for keeping the waterways a little less crowded.

So, let’s get started because spring only lasts so long…

  1. CLEAN!  Just like when you put your boat away, cleaning is a critical.  Use a mild detergent or a boat cleaner and give her a good scrub down.  While you’re at it, give her a good wax job also.  It’s like applying sunscreen- protect her from UV damage or she’ll look old and used before you even take advantage of her.  If you have teak on the boat, make sure to give it a good coat of oil to keep it from blistering.  And don’t neglect the steel- it’s the perfect mirror for a quick glance at your wind battered hair when looking for next weekend’s best friend.
  2. Always check your batteries!  Is there corrosion?  How are the fluid levels?  Is the battery hooked up correctly?  And is it working?  Have you charged it properly?  If the fluids are fine and there isn’t any corrosion but nothing will turn on now might be a good time to invest in a new battery.  Also, while checking on your battery, make sure to reconnect any electronics you disconnected during the winter.  You may want to use a wire brush to clean the terminals and cable ends.  Ensure that each piece of equipment is working before moving on to the next.
  3. Inspect your fuel system- a half tank means half the fun.   If you drained it in the winter, make sure to check the lines for cracks, brittleness or softness.  Look for leaks and loose connections.  Verify all clamps are properly secured and change your fuel filter.  Lastly, top your tank off to avoid moisture and condensation from forming in your tank.
  4.  Check your belts!  Make sure they didn’t stretch with your waist line during the holidays.  Tighten belts if needed to ensure they fit tightly around pulleys, which prevents slipping.  When fitted properly, you should only be able to push the belt down slightly.  A loose fitting belt will wear faster due to increased risk of slipping.    If the belt is worn, you may notice a black substance/residue near the pulley.  If you notice cracks or swells on the outer jacket of the control cables, you’ll want to take immediate action to repair them, or you could be left up the creek with an…engine?
  5.  Flush the antifreeze out of the motor, fresh water systems, holding tanks, and even the loo!  Check fluid levels and re-lubricate each of these areas and fill what needs to be filled or replaced.  Don’t overlook anything as one missed reservoir is all you need to ruin your boating season.  Extra areas to make sure aren’t overlooked: engine oil, power trim reservoirs, coolant, power steering and drive lubricants.
  6. Spend a little more time on the engine now that the preliminary checks are complete.  Take a look at the spark plugs- would now be a good time to replace them?  Probably.  How about the propeller- is it free of dings and pitts and fitting properly?  A damaged propeller can cause excessive vibration, damaging your drive train.  It’s not a bad idea to keep an extra propeller on hand.   Put engine muffs on and test your engine with a garden hose before taking your boat out for the first time.  Do you see a steady discharge stream?  If not, you may need to replace your water pump impeller, which is typically necessary every 2-3 years.  Lastly, don’t forget to check your filters.  Your fuel filter should already be done but how do your oil and air filters look?

There are a few other things you should look over before launching your boat for the season:

  1. Test the bilge pump to ensure it runs properly.
  2. Test the trim tabs, especially if you intend to run heavy.
  3. Check to make sure all safety equipment is on board and not expired.  This includes flares, safety jackets, fire extinguisher, and distress signals.
  4. Don’t forget to update your fishing and boating permits, and boat registration.
  5. What are the conditions of your dock lines?  Anchor line? Bumpers?
  6. Check lighting fixtures including navigational lights, and ensure you have spare bulbs just in case.
  7. If you aren’t keeping your boat in the water, don’t forget to go over the trailer.  Look at the rollers and pads, lubricate the wheels and winch, test the lights and brakes and check the safety chain.

This list is a great starting place for making sure you are “fun” ready, going into boating season but you should check with your manufacturer for more specific recommendations depending on the boat type, engine type and size of your vessel.  Also important to remember is how the boat will be stored during the season and what extra precautions should be taken.

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