Insurance Question's

Alvin Sydnor · Post by **Alvin Sydnor** » 3 Dec 2003 3:56 pm

I am NOT a professional musician or collector. I have a few pieces that I enjoy playing. I know the values have increased since I bought them. How do I prove to the insurance company the current value? If it is suggested that I have them appraised, how often should the appraisal be reviewed? Should I have additional coverage over and above my homeowner's policy?
I would appreciate ANY input on the precautions and how to handle insurance coverage on my musical instruments.
Also, I would be interested to hear about first hand experience in setting up a policy and handling claims, etc, etc.
Thanks for your help
Alvin

JB Arnold · Post by **JB Arnold** » 3 Dec 2003 4:02 pm

ALL instruments need to be listed on your homeowners policy if you want them covered. You must declare them as pro gear (leaves the house to earn money) or non-pro (stays home). Expect a slight increase in your premium, and limits on what they'll cover. I'm lucky, Allstate covers both classes and hsa no limit to what I can add to the list. Keep it current, and yes, you'll need appraisals if you expect value to have increased.

JB

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Fulawka D-10 9&5
Fessenden D-10 8&8
"All in all, looking back, I'd have to say the best advice anyone ever gave me was 'Hands Up, Don't Move!"
www.johnbarnold.com/pedalsteel
www.buddycage.net

http://www.nrpsmusic.com/index.html

Chris Lucker · Post by **Chris Lucker** » 3 Dec 2003 4:30 pm

Take it or leave it for what it is worth -- free advice -- but I have my instruments separate from my homeownwers policy under a special policy or rider, I think is the term. These riders are common for jewelry, art or stuff such as bamboo flyrods. I have replacement value -- not a dollar amount, but replacement value -- stipulated.
Here is an advertisement. I am insured through State Farm. I recently had a restored 1969 Mercedes 280SL (convertible) stolen. State Farm allowed me to establish replacement value and gave me every dollar. I did not seek a settlement for any item in the car that would have come under my homeowner's policy, such as my raincoat, a pair of loafers, etc. In California, at least, there are not many insurance companies that have been treated very well by the disasters over the past ten years and insurance companies look to weed out those who make homeowners claims. A separate rider, or making yourself whole through another policy, goes a long way to protect your often scrutinized homeowners policy. [This message was edited by Chris Lucker on 15 December 2003 at 02:15 PM.]

Mike Perlowin · Post by **Mike Perlowin** » 3 Dec 2003 5:56 pm

There is a company that specializes in musical instruments. CLARION musical instrument insurance.

They can be reached at 1-800-VIVALDI

Ron Whitworth · Post by **Ron Whitworth** » 3 Dec 2003 6:33 pm

Here is the link to the company Mike is referring to ( & NO i don't know anything about them ) but i am gonna check it out..Ron
http://www.clarionins.com/index/index.asp
[This message was edited by Ron Whitworth on 03 December 2003 at 06:33 PM.]

Ward Wilsey · Post by **Ward Wilsey** » 3 Dec 2003 7:27 pm

Hi Alvin,

One thing that I would recommend that you do is to hire the services a valuation expert to place a legitimate vaue on your instruments. A written letter signed by a steel guitar expert would go a long way to prove the worth of your instruments. I wouldn't rely on any valuations by an insurance company, and I would get the valuations I mentioned every couple of years. The money it would cost to do this will save you a ton of headaches should an insurance company ever dispute your claim. Just a legal thought, Ward

Alvin Sydnor · Post by **Alvin Sydnor** » 4 Dec 2003 5:50 pm

I want to thank all those that responded to this post. All were very helpful and I will be looking for more suggestions. What prompted this question was that when hurricane Isabel came through we suffered considerable damage to the rear of our house due to large trees falling on the roof and one fell across the road in front of our house which hit a car. Thank god there was no one hurt. All damages to the house were covered but I had questions on the trees that fell causing damage to other trees and shrubs which have to be replaced. I had ASSUMED that I had coverage on these trees as well as cleanup, NO WAY. From this experience I have learned that reading a policy and interpreting what they mean verses what I interpert are quite different. I had often thought of writing up my own polkicy in plain English and have the insurance company sign it as acceptable? Ha, Ha. I just wnat to be prepared just in case.
I like Ward Wilsey suggestion of a letter signed by a steel guitar expert. What do you-all think?
Just planning ahead.
Keep on pikin
Alvin

Nicholas Dedring · Post by **Nicholas Dedring** » 5 Dec 2003 11:48 am

If memory serves from when I had to insure an instrument, you are covered on homeowners policies, but only when the instrument is actually in the house. If you want coverage everywhere else against theft and vandalism etc., you have to put it on a rider.

If you want to get what vintage gear is worth, instead of what you paid for it, you need to make sure you are insuring for replacement value, and in that case, unless it's truly one of a kind (if you own a guitar with famous pedigree because it belonged to Player X), you get paid what it takes you to buy another one... an appraisal, and photos or video of the instrument are essential in the one-of-a-kind case.

I think for everywhere coverage, as part of a homeowner's policy, my rider for my tenor sax comes to $14.00 per year... peace of mind is worth that much.

Ben Slaughter · Post by **Ben Slaughter** » 5 Dec 2003 3:42 pm

Alvin,

As an appraiser, I agree with Ward's comments. Although I specialize in agricultural real estate appraisal, there are those that specialize in personal property (like a steel guitar). If you need to contact a personal property appraiser, I would start with the American Society of Appraisers (ASA), on the web at www.appraisers.org The folks that belong to the this organization (and other organizations which have different specialites, like myself) must subscribe to a code of ethics. I would advise against letting a dealer do an appraisal, especially if they may be interested in purchasing your instrument. I would also advise against paying an appraiser based on a percentage of appraised value. The appraiser should charge a FLAT rate. If you are having the appraisal done for insurance purposes, the appraiser should determine "insurable value" which is different from "market value." Finally, ask the appraiser for qualification before you sign a contract. I think you'd be hard pressed to find an appraiser who has appraised a PSG, but maybe look for someone that has done pianos and/or violins. Personal property appraiser do not have to be certified by a state, unlike real estate appraiers. However, membership in, or a designation from, a professional organization lends credibility to any appraisal.

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Ben
Zum D10, NV400, POD, G&L Guitars, etc, etc.

Alvin Sydnor · Post by **Alvin Sydnor** » 11 Dec 2003 10:26 am

I want to thank all that responded to this post. All have been very helpful in guiding me in the correct direction. Ben, your suggestions sound like the way I will go.
Thanks again and keep on pikin
Alvin

Jake L · Post by **Jake L** » 11 Dec 2003 7:54 pm

Hi Alvin...
I am a claim representative for State Farm. Like these guys said, make sure that you get a rider, or even a specific policy, to cover your instruments (or any other item of value for that matter) such as a personal article policy, or a business policy if you play outside the home for money. The reason for this is, your homeowners policy by itself does not take into consideration antiquity. For example, if you have a '66 Emmons PP, your insurance company, without having the guitar scheduled (listed with a specific value), will consider that just an old musical instrument, and will adjust the value accordingly. The amount of actual cash value that you would receive is not nearly what the guitar is worth from a collectabilty standpoint. I understand that you might not have State Farm as your carrier, but most all of the homeowners policies out there contain similar language. If you get confused looking at your options, and need an insurance company point of view, I will be glad to offer any help I can.
Jake Lowe

Jim Smith · Post by **Jim Smith** » 11 Dec 2003 8:09 pm

Jake, I have State Farm for my vehicle and apartment renters insurance policies. I play out a few times a month, so should I ask my agent for a personal article or a business policy?

What are the cost structures and advantages of each?

Alvin Sydnor · Post by **Alvin Sydnor** » 12 Dec 2003 8:52 pm

Hi Jake
Thanks for your response, you are the pipeline we need to discuss our insurance needs with our agent. Your example of the 66 Emmons PP is exactly what I have been afraid of, which is NOT being able to replace it for what the insurance company will allow. Is the term "replacement value" the way to go? OR if I list each item at a specific value, can I change that value as the replacement value increases?
All your suggestions will be welcome to all of us here on the forum, especially those that don't want to loose their old Emmons PP and that Super Amp.
Keep on pikin
Alvin

Gary Harris · Post by **Gary Harris** » 15 Dec 2003 10:56 am

A few years ago I had the chance to talk to a famous steel player who I'm not going to mention his name but he said his steel is promised to a collector who has promised to pay a huge price upon his death to his widow.
I asked him, "Do you have insurance on this guitar? He looked kind of shocked that I would ask such a question as if he had never considered this a potential problem. His answer was, "No".
A thief could steal this instrument and sell it for a couple hundred dollars, not knowing its real value.

Nicholas Dedring · Post by **Nicholas Dedring** » 15 Dec 2003 11:21 am

Yes, "replacement value" and an appraisal amount are the things you want included. Plus, make absolutely sure that either your own policy as it stands, or a rider if need be, will cover theft/vandalism/loss/whatever outside the home. As I understand it, homeowner's/renters insurance covers the apartment and its contents, not those items when they are outside of the apartment... hence the rider for the specific item in question. The rider I have covers any time, place, or situation in which loss or damage occurs, and is replacement value as well... a collectible item would otherwise be assessed as "$1,000 in 1966, less depreciation." Not good.

Alvin Sydnor · Post by **Alvin Sydnor** » 15 Dec 2003 12:10 pm

Thanks for all your suggestions and ideas on this subject. The more ideas and suggestions we get the better we can be prepared to deal with our insurance company. I think "It's better to be safe than sorry"
Thanks again

Keep on pikin
Alvin

Jake L · Post by **Jake L** » 16 Dec 2003 10:49 am

The way replacement of personal contents works, in most cases, is that actual cash value is paid upon claim settlement. In the case of the '66 Emmons, (if I were handling the claim), settlement would be done one of two ways, whichever is the least expensive. I know that a '66 Emmons can be replaced with another '66 Emmons. Therefore, I would base my value on today's cost of a '66 Emmons, then depreciate that value to give you your settlement amount. From the date of settlement, you then have 2 years to replace the item. When you do that, and show me proof, (receipt, etc.) I would pay you the difference between the actual cash value that I already gave you, and the replacement cost that I had based the value on.
Now...if someone who did not know steel guitars was handling the claim, the actual cash value would probably be based on the price of a new Emmons. The process would be the same. Keep in mind that your policy offers 2 types of settlements. B1 and B2. The replacement cost scenerio above only applies if you have the B1 settlement option. With B2, all you get is the depreciated value.Hope this helps.
Jake[This message was edited by Jake L on 16 December 2003 at 10:55 AM.]

Jake L · Post by **Jake L** » 16 Dec 2003 10:52 am

Jim...
In response to your question, your Homeowner's policy protects your personal property anywhere in the world. If you get paid to play, your rig becomes business property. As for pricing, I would suggest that you contact your agent.

Alvin Sydnor · Post by **Alvin Sydnor** » 16 Dec 2003 11:04 am

Jake L, You are a blessing to this post as well as to me. You have been very helpful Thank you, Thank you. And keep on pikin

Alvin