View Full Version : Insurance Coverage For Home Shop Tools

Ohio Mike
12-29-2013, 03:57 PM
I wanted to take a minute to share a valuable lesson about insurance coverage. Some months back I received a notice of non-renewal of my home owners policy. To keep things short and to the point Iíll just say that I contacted the agent who was apologetic as the company in question had terminated a number his policies. Being an independent agent he offered to quote out a replacement policy, along with auto coverage, with another company. In my discussion with the agent about my coverage needs I brought up that we should revisit the coverage values as I had been in the policy for 10 years. Like many of use here most of my valuable belongings are my tools. Thatís when the conversation got interesting. It turns out that even though the total coverage of my prior policy was within a reasonable range of my assets the policy had a value cap on tools specifically. Since I had continued to buy things for the shop my maximum allowable coverage was a fraction of the replacement value of my tools.

The good news for me is I ended up with a much better policy at a better price. The policy now has a line item specifically for the tools with agreed coverage (meaning I provide an inventory with replacement values that I set). So guys and gals be sure to double check your policies and ask your agent questions so you're sure where you stand if you need to file a claim.

Jaakko Fagerlund
12-29-2013, 05:32 PM
Noticed the same cap on tools a couple of years ago in my home insurance too. Quick look around the room and some math revealed that I had to basically double my cap. But it didn't cost much more, probably 10 EUR per year or so :)

And I think I'll have to revisit this issue, as I do sometimes have tools here that I've just built and the total costs can go well beyong all my usual tools. Have to ask the insurance company what it would need to cover those.

12-29-2013, 05:58 PM
Not sure about what 'coverage' you bhave, but two years ago I loaned my best friend my mig welder and his shop was broken into shortly afterwards, the insurance company called me a while after, asked me what kind of welder it was, asked what I paid for it etc, then sent him a check for $200 more than my original cost.

Agreed coverage is sometimes the best way to go, you say what you have is worth $x, and pay to cover that amount, but if your item value is variable, you could be paying more or less than you receive.
Agreed is better for things like a boat where you know you only paid $12000 for a $20,000 boat, $15,000 agreed coverage will make you money, but if the item can/will increase in value 'agreed' value can cost you money.

j king
12-29-2013, 06:56 PM
Funny this just came up.I had talked to the insurance co about raising my coverage.I told them that I had put an addition on the garage and the barn since policy was first set.I also told them I had a lot of tools ..Alot.they asked the value and I told them and I must have caught them off guard.Lol! They had to do a rider to cover the amount.I think they must think I'm nuts having that much in tools.

J Tiers
12-29-2013, 10:54 PM
You will nearly always need to have a rider for ANYTHING unusual, and some things not so unusual.....

Most anyone who is married has the wife's engagement ring, which may run to several thou in some cases.... You should look, because in most home policies, "jewelery" is limited to a value less than the value of many engagement rings, let alone any other gew-gaws the wife may have.

In such cases, you need a rider, and the Insurance Co will want to see an appraisal of the individual pieces by some credible source in the trade.

Furniture is likewise limited, so any antiques may need riders and appraisals.

They want appraisals on things so they know they are not insuring a "paste" replica as if it were a diamond, or for that matter, that they are really insuring something that exists. And of course, they want to have a "real" value for the items, not your "lies and wishful thinking" about value.

I have no clue where you get appraisals on old machine tools which should have been scrapped 30 to 50 years ago....