Insurance Heads Up

[john whittaker]

Several years ago I had some tools and a priceless guitar stolen from my house. The insurance company wanted to see pictures of my valuables as proof that they really existed. They not only wanted pics but wanted me in the pics to prove that they were really MY items.

This is a common request from insurance companies so I recommend taking pics of your valuables (tools) and placing a marker or something identifiable in each pic. Put these pics on a disc and store it somewhere safe. This will help in case of theft or fire.

I first tried to take a pic of all my tools, one by one, with my cat lurking around. My thought was, "if they see the same cat in every pic, it will prove the items are mine"......But the cat wouldn't stand still. Well, maybe if I shot him???
Anyway, I ended up using a medallion which is large enough to show up well on the photos.

This info may have been posted before, but it will not hurt for us new guys & gals to read it...and some of you procrastinators can go ahead and ignore the advice....again:D

[Corey Hallagan]

You are right it is a very good idea to take pics, and store them in a safe deposit box in your bank, not at the house! Been an underwriter for about 30 Years. When you took out your policy, did you tell your agent about your guitar at that time? I would have requested a photo of it at that time if so. As far as a photo of the items with you in it.... kind of iffy on that one. We insure very high value jewlery, fine wine and art, haven't seen that one before, then again valuations are obtained. Some of our business is for celebrities and other well know people. This is what a few dishonest insureds cause. Fraud is everywhere, and it is difficult to prove.

Corey

[David Pettibone]

Hello

I am just asking because I have heard many different scenarios. I worked in a Home Center years ago and had a least half a dozen guys within 3 years come in with a list of tools they were allowed to buy. Being extremely inquisitive about everything that I don't know, which is a lot, I asked how the full replacement policy works. Every guy said they never got a true full replacement. I realize the value of most tools drops significantly after they are purchased, but I was suprised at what they got compared to what was apparently stolen.

I recently posed this question to an insurance agent who was giving me a quote. I said who's to say if the pictures of me and my tools are real, meaning I may have sold x-percentage of them, but I still have the pictures. Now I happen to actually have a break-in and lose a bunch of tools. What do those pictures prove of what I really owned when the break-in occured??? He said your absolutely right and you probably won't get re-imbursed for everything that you have photos of. Hmmmmmmmmmmmmmmmm?

So then, my questions is, what does a full replacement policy actually mean??? Does it vary from state to state? I live in Michigan. I own 12 routers because of my line of work (I honestly don't change router bits very often, I change routers and it is more profitable that way===time value). According to this agent, I probably would not get all of them replaced. Is he not all there, or is he a little correct depending on the situation?

Just to be perfectly clear, I am just asking, I am not challenging anybody in any way, shape, or form. Please don't take the question the wrong way as to implying you are wrong, because it is not intended to be that way. I have heard so many different things, I was just wondering if there is a definitive answer. Thanks Corey for any info you may have.:)

David:)

[Corey Hallagan]

Lots of variables here that can come into play. Since you use your tools in a business, I am assuming you have comercial insurance and not relying on your homeowners. Been along time since I have underwritten property insurance myself, I am a casaulty guy for the last 10 years.

Replacement cost means that, the cost to replace with a like or similar kind. Many property policies have a sub limit that applies to tools. That means that you have a specified amount amount of coverage after the deductible. Commercial shops generally have a tool floater for tools that are used outside the shop and shop equipment is covered as contents on a property policy and mobile equipement is usually written on a inland marine form. Forms very widely from company to company. Just besure to read and understand your coverage. Take yourself thru the what if scenarios and let your agent answer your questions. But if you have true replacement cost insurance on your shop routers, you should get the cost to replace them with a like and similar kind after the deductible. Often people are unhappy because:

* Often, there is not enough insurance coverage or othewise underinsured.
*After deductibles are applied, they don't get the amount they thought they had. *They thought they had replacement cost but had ACV coverage.
*If they had replacement cost they were paid less because the item cost less now than when purchased.
*Old tools that are difficult to establish a value.

So many factors can come into play. Basically if you buy replacement cost coverage on tools in a shop ( not everyone will write it that way) and you have the proper values etc. then you should receive the amount to replace your tools. The idea is to make you whole again for your loss, not upgrade necessarily but often that happens in the process.
In my opinion the best thing to do is keep a record of your serial numbers of your tools, original receipts ( proof of purchase). I don't buy into the photo of you with your tools scenario. Basically worthless. A video is the best scenario for shops. My contractors would probably flip out if we asked them for photos with their tools!! In the end their is alot of fraud with tools... and companies are do grow wiery. They are careful or should be but most insureds are trustfull but a few ruin it for others.
Hope this helps.
Corey

[Jason Roehl]

Here's how it worked for me last year. I had about $2500 worth of tools stolen out of my garage. My policy was replacement cost. Fortunately, I had receipts for much of the stuff, some of those dating back 7 years. The receipts also helped me determine most of what was stolen--I went through the receipts and decided whether I still had a given item or not. Without out those receipts as reminders, I would have left a lot of tools off the list. For my part, I had to send the adjuster a list of the items stolen, purchase price, estimated value, replacement cost, source, etc. Then he sent me a check for the sum of their ACV--Actual Cash Value, less the deductible ($250). I then had one year to replace the items, at which time I would receive the difference between Replacement Cost and ACV, limited by THEIR determination of RC. I replaced most of the bigger-ticket and needed items pretty quickly, but I did let a few of the smaller things lapse (some saw blades and hand tools). So all told, I was out about the equivalent of my deductible, plus maybe a few dollars. The biggest drag was doing all the research to compile a list of the stolen items and the pertinent values and costs. I now put all tool receipts in a separate, safe place.

[Donnie Raines]

Each company is diffrent. We encourage all of our cleints to document and take pictures and then we will file that along with that individuals other documents. However, we do not require a photo for proof...especially a photo with you in it. Frankly, we take your word for it. You most, however, have a filed report with the local police department. If you were caught lying(insurance fraud) you would get hammered!!!...and I have seen that happen on several ocassion's. Sure, I am sure some have gotten away with it...but we have a division that concentrate just on these types of items.

For more information on the rateings of insurance companies...rates, claim service and service in general and the comapnies financial strenght visit the below web pages:

www.ambest.com

www.moodys.com

www.s&p.com

[Kelly C. Hanna]

Very good advice...since we're moving soon I will get a chance to photograph everything once we're unpacked. I didn't know about the larker though...great idea!

[thomas prevost]

It may seem obvious, but, once you have filed a police report as required by the insurance co., you must follow through with attempts to prosecute the thief. We often back down if it is a neghbors kid, relative, friend(ex) or employee. If you do the insurance probably will deny the claim.

[Keith Foster]

Photographs are great, but be VERY careful if you use a digital camera. Make hard copies of the digital files - DO NOT RELY ON THE FLASH DISK OR THE HARD DISK ON YOUR COMPUTER! They will eventually fail and all data on those disks will be lost. Also, do not store the data on CD's. The current writable CD technology uses a dye that the CD writer burns with the laser. That dye IS light sensitive and "can" be damaged by exposure. It has also been shown that data can simply "dissappear" off the disks over time. Data disks should be keep in a cool and dry place to increase their longevity - but even that will not guarantee the data will be there when you need it.

[Lee DeRaud]

Also, do not store the data on CD's. The current writable CD technology uses a dye that the CD writer burns with the laser. That dye IS light sensitive and "can" be damaged by exposure. It has also been shown that data can simply "dissappear" off the disks over time. Data disks should be keep in a cool and dry place to increase their longevity - but even that will not guarantee the data will be there when you need it.Key phrase here is "over time", where time is measured in decades. We're not talking about archival storage, we're talking about home inventories which need to updated at least once a year.

[Charles Hans]

If anyone is interested here is a software program that I use to keep track of all of our major purchases. It wasn't very expensive, and it allows pictures to be added along with all other information that you might need in case of a loss.
I got this information from a neighbor who is a woodworker that had a break in and lost a lot of tools. I thought I would pass it along. It took me a while to enter all the data but once done it's easy to add to it whenever you need to.
Down side is, I now realize just how much this hobby has cost me over the years.
Personal Inventory Software - Deluxe (http://www.contactplus.com/products/mystuffd/index.htm)

[Kelly C. Hanna]

Great link Charles...as I pack I realize the new house should have it's inventory documented...thanks for posting it!

[Keith Foster]

Key phrase here is "over time", where time is measured in decades. We're not talking about archival storage, we're talking about home inventories which need to updated at least once a year.That would be an incorrect assumption. Data on inexpensive read/write CD's has been shown to dissappear in as little as 6 months. Higher end storage CD's are better, but do not have the longevity that is available from manufactured disks. Computer hard disks are no better and fail at an alarming rate. This is my business and I deal with this issue and the problems caused by improper storage or backups every day. If you want something that lasts - don't use CD's.

[Larry Norton]

As Kelly and others have known, our old house was picked up and moved 9 feet while remaining in one piece by an F-4 tornado 3-1/2 years ago. 3 days later, my insurance adjuster is there. His first words were, "You have nothing to worry about!" And he was right. As we started walking at an angle through the house, my friends had already just about cleaned the inside out, so there wasn't much for him to see, furniture wise. We climbed down into the now 3 ft. tall baesment and he looked around and we went back up. He had already told me something I didn't know, that we had Replacement Costs on our policy.


He then told me I didn't need pictures or receipts, all I needed to do was list the items and the cost for replacing them at the time of the tornado. I was reimbursed that amount, no questions asked, for the items I purchased to replace them. Needless to say, I upgraded everything. I had a Delta contractors saw that the house was sitting on, it would cost about $900 to replace. $600 for the saw, $300 for the Biesemeyer fence. They paid $900.00, I used it towards a Powermatic 66.

Anything that I didn't replace, like my old crushed Craftsman RAS, I got 80% of what it would cost to replace it new. After 1 year, if I thought of anything else, I would get 80%, including stuff replaced or not.

Same with the house itself. Without RC, I would have gotten $133,000. They actually paid about $180,000, what it would cost to exactly replace the old house. Also, we were able to build whatever we wanted within the $180,000.

Please check your policy and be absolutely sure you have replacement costs. It doesn't cost that much more.

The insurance company? Not sure I can mention it here, but it's E--e, which is also a major town in Pennsylvania.

One other little thing I found out. My Income tax preparer told me I didn't have to worry about the receipts I lost. The IRS would not audit me for anything prior to the tornado.