Investment + Insurance?

[PeruvianSkies]

Ok, got a question that I have not yet seen discussed on this site since I started coming here about 10 months ago. The question is...Does anyone have insurance on their equipment? I put together a spreadsheet that lists all of my equipment and also includes the MSRP as well as the price paid, plus it includes pictures of the equipment and I keep this in a few safe places. My equipment alone is around $16-$20,000 and I have about $25,000 in DVD's, plus another $15,000 in CD's, which I keep in a spreadsheet as well to keep on file for various purposes...the first just to know what is in my library.

So should all of this stuff be insured and if so how? I doubt the home-owners insurance would cover much...I don't really know much about insurance and such, so any help would be awesome.

[jrhymeammo]

It's hard to get a free advise from lawyers. Where are you Dean Martin?

From what I remember, price you paid or MFSR price will never be recovered. It is all based on current market price as used equipment. You can always list the value of your items but dont think that amount will be recovered. You may chose to list every single titles of your CDs and DVDs for future legal purposes with their signatures. But insurance companies will never request that, unless you have some collectors items that have much higher value. I wonder if CDs and DVD value has declined significantly due to illegal downloading.

But what do I know, I only took 2 semesters of business law. I got an A in 3000, but C+ in 4000 course.

[Bernd]

I have an add on to our normal house hold insurance. Everything is photographed and catalogued. It took us quite some time to find a very decent and compatible Insurance company.
Most we looked at, had individual item limit off 5K which is not enough in our circumstance.
In the end after about searching some 20 companies we were left with one that ticked all the boxes.
It really pays to do some research. Cause once the unthinkable happens it will be too late if you're cover is not sufficent.
Hope I never need to claim, but it's good to know that we have a safety net. Lots of money invested in this crazy hobby.

Peace

Bernd:16:

[Dusty Chalk]

One should have something I've heard called "renter's insurance" -- it's for your stuff. Take pictures -- especially of the larger collections (for example, in my case, my CD's) and the more expensive items (in my case, my stereo and home studio); keep them elsewhere (on the net somewhere, for example).

[kexodusc]

Depending on your policy, your home insurance might already cover the contents against theft, damage, etc. Mine does up to $45K, which is worth more than all my gear and furniture anyway. It's a royal pain to take the pictures, copy the receipts and mail everything in, get it certified, etc. But good piece of mind at least.
I think with the pricetag you have on some of your stuff, I'd put forth the extra effort to get this taken care of. I posted a few years back here about a neighbor and good friend of mine who lost his Plasma set, Krell, and Martin Logan gear, among other things in a fire. Over $20K. (his little Border Collie saved him and his family's life - great story for dog lovers that made the evening news). He had a real hard time getting everything accounted for but ended up getting everything replaced.

Ya just never know.

[bfalls]

I have my equipment covered under a seperate $20,000 replacement cost policy. I've had gear stolen in the past and the depreciation cut pretty deep. I don't remember how much the additional costs is (my wife handles the finances).

Even at $20,000 the policy wouldn't cover my loss. I have a lot of gear, over 750 DVDs, 100 LD and well over 800 CDs. Many LD and DVD are collections, special editions, or collector's items such as the Star Wars 6 LD CAV boxed set. However, I would be able to purchase a very, very nice starter system.

[SlumpBuster]

Okay, if your at all concerned about an uninsured loss of audio equipment or a media collection, then you need to do one simple thing: go see your insurance agent.

Alot of what has been posted so far is only half right.

1. A "renter's policy" if for people who rent. It only covers personal property and not the building itself (although that is not entirely true). A "homeowern's policy" covers the house and the contents. Both policies cover other sundry losses.

2. Both policies generally come in two flavors: Depreciated value or Replacement value. Depreciated will pay you what the stuff was worth at the time of the loss. Replacement value will pay you what it costs to replace the loss. Depreciated coverage is less expensive and many unscrupulous agents may sell you that unless you specifically ask for replacement coverage. Regardless, the insurer will almost always have the option of replacement over payment. i.e. If they can get you a set of replacement speakers for less then retail, they are free to send you the speakers rather than the cash. Either coverage will benefit from the diligent record keeping described by Peruvian.

3. Remember an insurance policy in nothing more than a contract between you and the insurerer. Accordingly, if you don't buy the coverage, you aren't entitled to squat. A policy generally consists of two documents: 1) a declarations page, or "dec sheet" for short and the policy book. The dec sheet is a single page that particularly describes the coverage you bought. The policy book is usually a small "onion" paper booklet maybe 20 to 50 pages depending on insurer that contains all the legalese and fine print. Both documents make up the policy contract and should be read together to determine your coverage. AND YOU SHOULD READ YOUR POLICY PRIOR TO SUFFERING A LOSS NOT AFTER SUFFERING A LOSS.

4. THIS IS IMPORTANT: Not all insurance is the same. It varies widely from state to state and company to company. Many specialty items such as $5,000 speakers will need to be covered by a "rider." A rider is a specific coverage bought subsequent to a specific disclosure of a piece of property. They are especially employed for property that is often stolen. Most commonly you will see it as a "jewelry rider." This is why it is so important to see you agent.

5. Finally, and most importantly, insurance companies make money by collecting premiums, not paying out claims. Remember, these are the fcuk sticks that looked at Katrina and said "I don't see no wind damage." They will try to screw you, so govern yourself accordingly.

[dean_martin]

I agree wholeheartedly w/SB's advice. Read and understand your policy. Know whether you're covered for "replacement cost" or for "actual cash value" and understand the definition of each as stated in your policy. As a general rule, when you own valuables exceeding the limits of your policy, then you need a "personal articles floater". This is in addition to your regular contents protection and requires additional premium. It's often recommended for furs, jewelry, antiques, works of art, etc. Your contents policy may state that it doesn't cover these "special" items and to cover these items a special rider or floater is needed.

I have a personal articles floater (some companies may call it a rider), but it doesn't include my gear. It includes some of my wife's jewelry. Right now, my gear is covered under my contents. As an example of a piece of gear that should be on a rider/add-on/floater addition to your policy, let's say you have a Marantz 10B tuner that goes for $2,500-3,000 (haven't checked the going rate in a couple of years). Actual cash value won't replace it and you would be arguing with the insurance co. from now on over replacement cost and there's no guarantee that you could replace it.

The spreadsheet/inventory is an excellent idea and many companies provide a sample inventory sheet on their websites. With a digital camera, it shouldn't be too difficult to take and store pics as well.

[PeruvianSkies]

Thanks to everyone for the helpful hints and knowledge....I am glad I have this site in my life!!!

[nightflier]

Dean, Slump,

I have a lot of items that I have purchased second hand, traded, purchased at swap meets, etc. (art, antiques, and some of my gear). None of these have receipts and their value is hard to determine (some of my art has appreciated, and most of my gear has depreciated). I have photos of most of my valuable items and I suppose I can print blue book values for the gear. I know this will need to be reviewed on a per-item basis, but generally speaking, will this be enough documentation? If not, what else will I need or am I then not able to insure these items?

[SlumpBuster]

Yeah, I'd have to refer you to my original post: Talk to an insurance agent.

There are alot of devil's advocate problems with what you describe. Most of my concerns run along the idea that "one man's treasure is another man's trash." You have to remember that $3000 vintage tuner is worth precisely $0 to 99.99% of the population. Ours is an ever decreasing in popularity hobby. So imagine you have to sue your insurance company because your house burned down and they won't pay, and you have to convince a jury that "no my Appogees really were worth $20k and had $10k worth of upgrades." Nevermind the fact that your going to have to spend thousands on a valuation expert to corroborate your assertion. Yeah, I doubt a jury's gonna buy that. If you don't believe me ask around. While you at it ask anyone you know how much they would pay for a Klimt. However, its an entirely different story if you and the insurance company agreed to a value in advance of the loss.

But, California is a perfect example of differences between states. Cali is a "bad faith" state as far as I know (unless they've changed anything recently). That means that if you can demonstrate that the claim was denied in bad faith, the insurer may be responsible for your attorney fees.

All of this belies my most important point: Understand your coverage, get it in writing, ask lots of questions, if it sounds to good to be true it is, you get what you pay for, you are buying a product so kick the tires, and do this all BEFORE you have to make a claim, not after. An ounce of prevention is worth a pound of cure.

Finally, to quote Back to School "Your wife was just showing me her Klimt."

[nightflier]

Finally, to quote Back to School "Your wife was just showing me her Klimt."

What exactly do you mean?

[SlumpBuster]

Sorry, my banal attempt at humor. Gustav Klimt was a painter. Until recently one of his paintings was the most expensive ever sold for like 120 million. My point in the post was that most people would not pay a $120 for a Klimt, let alone 120 million dollars. Similarly, many people would pay cash money to haul away some of our audio monstrosities, let alone compensate you tens of thousands of dollars for an insurance lose.

In the movie Back to School, starring Rodney Danderfield, there is a joke. Rodney, having just caught his wife cheating on him during a party they are throwing at his house, returns to the party. A man, standing below a painting by Klimt, remarks "Your wife was just showing me her Klimt." Rodney, having no idea what a Klimt is, states "You too? She's been showing everybody." "Yes, its a remarkable painting," says the man. "Oh yeah, the painting. Thanks," retorts Rodney.

My reference to Klimt made me think of the joke. By no means a reference to your wife, if you have one.

[Groundbeef]

One other thought to keep in mind w/insurance. I often obtain riders for expensive electronics (DVD Camcorder, Laptop, etc) even though my homeowners insurance would cover the loss if it is stolen or lost.

The main reason is that a rider does not require you to pay your deductable for your homeowners insurance. Also, the loss does not go against your insurance, so no raise in your rates. This is because you are actually paying for individual coverage of the item.

Riders are a bit expensive generally about $1 per $100 in coverage for yearly coverage. But, the lack of rate increases if you suffer a loss may negate the higher cost. Anyway, just my 2 cents worth.

[hermanv]

My house burned down last year. I listed all my 2 channel electronics, my home stereo, DVDs, CDs tapes and Laser Disks. All listed and itemized by brand age and cost (a lot of damn work, for which you will not be compensated) my insurance company insisted on detailed itemized lists not all of them do.

Some companies will look at your coverage limit and say it to you "this looks like 85% destruction how about 85% of the dollar amount of your coverage" and you negotiate from there. Other's like mine, want to negotiate every last item, teaspoon, paper back book and Martin Logan speaker.

They look at replacement cost and depreciation using "experts" to valuate each item and offer you some percentage of that (they are not required to use licensed experts, but you are). I challenged some audiophile item valuations by submitting actual used prices paid over the last 5 years (this is available from Audiogon for a small fee). So far they have come around. They don't allways, many companies assume you wont make as big an effort to collect as their permanent paid staff does to stop you. They might make you get appraisals.

If they can prove you are a "collector" then you probably need to have a seperate rider, just having expensive stereo equipment does not let them off the hook, after a long tussle (no courts or lawyers) they paid.

So far we are 15 months into the process, my house is just starting to get rebuilt and I have probably been paid for about 60% of my possesions that were listed. We didn't list them all. We lived there for 35 years and like many, had accumulated vast armies of stuff.

[Bernd]

Wow, what a nightmare to have your house turned into charcoal. That's one of my biggest fears.
I have, as you, amassed large amounts of stuff and have a couple of large music collections.
I wish you a speedy rebuild and may that be the worst thing that will happen to you.

Peace

Bernd:16:

[nightflier]

What about items that can't be replaced, like limitted edition recordings, signed LP's, one-of-a-kind artwork? They can re-imburse you the blue book value, I suppose, but that's the kind of stuff that is priceless in my book.

[hermanv]

You can submit a claim for what you think is the value of rare items, they might demand an appraisal (your cost) or declare you a collector and therefore needing a rider or they might even pay. I know someone who lost a guitar from a famous musician, they paid him $5,000 for it.

We lost many irreplacable things such as photographs, in this case the insurance industry can't help even if they wanted to.