Insurance for shop and residence.

[Tim Bueler]

We relocated 4 yrs ago. I had the foundation poured the year before for our new cabinet/woodworking shop. We had always planned on having a separate house but for too many reasons to list we decided to add a second floor over part of our new shop building and locate our residence there. This change came literally as I was building the new shop, it was a chaotic summer and we didn't really have time to think about things like insurance. As it turns out insurance has become the hardest part of the whole process.

We were able to get liability insurance but because we have a commercial cabinet shop we are having trouble finding affordable insurance that will cover both our building and residence. Part of our problem is we don't, and don't want to, work full time. We stay busy with the cabinet shop about 1/2 the year which makes it even more difficult to justify what we consider to be exorbitantly priced insurance. Another problem is our property is extremely rural. We are located, according to the all knowing google, 7.3 miles from the nearest fire station. One insurance company's cut off distance is 7.0 miles.

We are wondering if there are any others of the SMC collective who find themselves in a similar situation and what you do about it?
Thanks for any insight/suggestions.
Tim

[Kevin Jenness]

Not quite the same situation, but I do have a cabinet shop on the same premises as my home. I have homeowners' coverage on the residence from Traveller's and a business policy covering liability, premises, equipment and finished goods from Merchant's. Many companies are loath to provide coverage for a home business, in fact Horace Mann cancelled our homeowners policy as of the date I recommenced my business. All I can suggest is to reach out to as many independent insurance agents as you can find. My agent said that insurance companies offer coverage of different risks in different areas depending on their exposure, meaning that if they have a lot of cabinetmakers on their rolls in your area they may not want to take on another, whereas another company might be willing.

You might look for companies that insure artists as they often combine business and residence in one structure.

[Greg Parrish]

Can you get coverage for the business and building through a BOP/business owners policy. Then create a formal lease from you to the business for the upstairs residence and then pick up tenant insurance for the personal contents and liability coverage?

[Mike Null]

My State Farm agent covers my house and contents on one policy and my business, inventory, and equipment on another. My insurance also covers a million dollar liability clause which one of my customers requires.

I used Hartford previously for the business but the agent was an idiot.

My business takes up almost all of the basement.

[Yonak Hawkins]

I agree with Kevin about working with an independent agent. Our agent found a company, Encompass Insurance, which covers our home, autos and in-house business in one umbrella policy. The business add-on to my homeowner's policy is an additional $175 per year.

[Roger Feeley]

When we owned a home, we were always told that insurance would cover fixed assets in our basement but not my shop equipment. So we have always been a bit paranoid about basement flooding. We had a backup sump pump from Liberty that runs on city water.

Now, we live in a structure that is owned by our daughter and son-in-law. It's a bit complicated. We loaned them the money to build our house on their land. So now we can have renters insurance which covers the shop equipment. We still have the same kind of backup sump pump.

[Jim Becker]

My immediate thought was what Greg mentioned...insure the building as business, lease the residence to yourselves from the business and have a renter's policy for your contents and personal liability. Your attorney should be able to help you set things up so everything is kosher I would think...

[Tim Bueler]

Thank you all for your input! We are exploring the leasing back possibility and a few others. The big sticking point here seems to be the extreme rural nature of our location. I can't begin to express how happy we are to have moved away from "civilization", but it's not without it's own set of problems.

Thanks again!
Tim

[Greg Parrish]

Ask if it helps if you put in a deep well hydrant connection. I’ve heard of folks having to do that to provide adequate water source in some cases for fire fighting purposes. Also see if there is a volunteer fire department near by that may not be showing in the insurance companies searching. Good luck.

[Tim Bueler]

Here's a follow up.

I reached out to my former agent in WA where we moved from. She was my agent for many years and has proven herself to be a person of extreme integrity. It turns out the agency she works for is able to write policies across state lines into Idaho where we moved to. She was able to cover ALL my business insurance - liability, inventory, equipment, finished product, etc. - and ALL of our personal insurance, including auto and homeowner's, for about 10% more than 2 other agencies quoted for ONLY insurance on just our building.

During the process all of our insurance got a good review and we are now very happy that we are once again fully covered (as opposed to under-covered which is where the local agent had us, and even getting that was a battle), and by an agency that we know we can trust. Turns out the adage is true, "It's not what you know, it's who you know".

Tim

[Yonak Hawkins]

That's great to hear, Tim. It's a load off not to have to worry about it.

[Jim Becker]

Gotta love a happy ending to a challenging situation!

[Kevin Jenness]

Glad to hear you got it sorted. I think finding the right agent is key, and by luck you had one in your pocket.

[Geoff Pritchard]

Hey Tim --- Nice to see things worked out for you. I'm not too far from you in Idaho miles (up near Deary). How did you do in the flood last week? As I recall Kamiah had some trouble.

I'd be interested to hear who your agent and carrier is. If you're willing, you can PM me with the names. If not, I understand.

We're not 7 miles out of town (more like 5) but our local FD is a volunteer unit (station is umanned) ...... maybe Kamiah is volunteer too? When we had a fire, we called 911, they ring the station that forwards to the volunteers, one of whom was our neighbor. He had to drive into town to get the firetruck and then come back. Probably 20 minutes or more.

As I said, we had a fire in our shop back in May 2012 that burned it to the ground. It's good to know your coverage before a catastrophe hits. We were covered only under Home Owner's plan ...... the contents were covered at the same level as if it were the house. The building was treated as if it were a standard residential garage (2 car?) so we took a hit on the rebuild (40x60). A suggestion for all - figure out a way to document your tools/equip etc mostly so you can remember brand/model etc as insurance often wants that info when doing the reimbursements. I thought taking digital photos would be a pretty easy way to do it. I will tell you that once your stuff is burned up, the remaining clues and reminders aren't much good.