shop insurance

[ochster]

I recently built a seperate 18x24 shop on my residential property. It's basic purpose is to house my household and mechanics tools, as well as provide a small hobby machinist area. I finally got around to calling my homeowners insurer (Allstate), to add the building and value of contents to my policy. I was flatly denied, being told this was/is a very high risk type setting, that they don't write policy's for. Knowing a couple gentlemen who have a assorted machine tools in thier garages, I enquired what they do. Neither carry's any sorta replacement coverage, nor even thinks it's smart to tip-off your agent.

What do you all do/reccomend?

Thanxs

[Alistair Hosie]

I have a friend who had exactly the same problem he contacted insurance (linked to his mortgage provider) who promptly told him he was to go elsewhere for his insurance and his mortgage or take down the workshop Alistair

[x39]

I recently opened this can of worms myself. My insurer (Hanover) didn't seem bothered by the fact that I have a shop on the property, even after an on-site visit/inspection. I haven't recieved a quote from them yet, so I guess that's what I'll have to use to gauge their opinion. I'll post here when I find out.

[jfsmith]

I have found that insuring a home shop is next to impossible. So I declared all of my stuff a hobby, and said nothing else. My guns are insured by a seperate rider, but they don't see the light of day very often, as perscribed by my insurance.

Insurance companies are generally a rip off for home shops and special interests. I haven't ried Lyods of London yet, but who know, maybe they will have the best rate.

Jerry

[Al Messer]

What are their commercial rates? May prove feasible to incorporate yourself to avoid a whopping liability suit on down the road.

[Alistair Hosie]

I forgot to say some of the woodworking magazines offer specialist insurance for woodworkers perhaps it would cover all types of shops or perhaps machining mags do the same contact the staff at the magazine and ask they are usually very helpful . Alistair

[Toolmaker Extrodinair]

If you live in urban or country area, you can get farm ins. As a commercial policy you can call your shop a farm repair shop. Grange carries this type of policy.

[mike thomas]

I have a State Farm homeowners policy, that lists the shop as a separate building. The agent knows what I do, and has said that as long as I charge no one for anything, the hobby part of the operation is legitimate under the homeowner's policy. I also (at his advising) lowered the liability insurance on my vehicles, and between the savings on that and a few extra bucks per year, bought a fairly large umbrella liability policy. Just in case something I make is misused, and the person thinks it is my fault etc.. I guess I won't know how well this works out unless I get sued. Mike

[Oso]

Incorporating does next to nothing...

The lawyer simply includes your name specifically and separately as the responsible corporate officer, and you are back in the soup. For most small corporations, you as an individual have "deeper pockets" than the company, so you are still the prime target.
You have a house, car, land, assets including the entire corporation and its equipment as sole owner, so.....................

AND, you just proved conclusively your personal liability needn't cover, as it is a business liability arising out of the operations of a corporation. They just point at the fine print on your personal policy, and leave you out for the buzzards.

[Thrud]

You have real bastards down there for insurance pukes.

They are not that bad here. They will make you pay to have it properly inspected for compliance with the National and local codes and correct any defeciency before they will insure it. I don't have a problem with that. The other thing to do is to have a machinery dealer do a solid replacement cost on the tools and a contractor for current construction costs - just to cover your butt. Video proof of the equipment and building also help, and having the agent arrange inspection by the insurance company before the contract is drwn up is a good idea. READ THE FINE PRINT.

I had better reception from my insurance company when I supplied complete lists of tools and serial numbers. Lots of work - still have not done the video as they suggested.

[docsteve66]

IMHO every one is better off to self insure. Liability is probably worth while. If you have mortage, you gotta have insurance, but it probaly just protects the mortage holder. My stuff, tools, books, guns, cameras etc would not be preplaced at a fair rate unless I paid high premiums. The insurance companies pull out lots of "loop holes" when a hurricane hits. Put the premiums in the bank and take your risks, if you have the ability. Insurance companies are in the business of taking money, not paying it out. I have several neighbors who have found out the hard way that a single claim results in the policy not being renewed. think hard before you go the self insurance route and be prepared to replace your stuff your self if damage occurs, the insurance company sure isn't going to replace a car, home or any thing else at a fair price. you will not be made whole. Carry what you must in the way of insurance, make no claims, have maximum deductions (which is self insurance in a way) and tell them nothing that you can avoid. Insurance is a bottomless pit to throw money into.

I know most will disagree, comments please.
Security is expensive!
Steve

[lynnl]

I agree Steve. Insurance companies don't employ talented statisticians and actuaries for no reason! Cards are stacked in their favor. Just like in Las Vegas. Most of us would be financially devestated by SOME losses (home, etc.) so we have to insure. (Made all the more necessary by the lawyers of course.) But it's money down the drain. Just like those Extended Warrenties all stores try to sell you along with your new major appliance or expensive gadget. Premiums and the time value of the money are factored in so the consumer loses and the company makes money. At age 58 I'm sure I would have a nice nest egg if all my auto insurance premiums (ie non-liability portion) had been invested in an S & P 500 mutual fund over the years. Smart thing to do would be drive only old, cheap vehicles and just walk away from any wreckage/damage. Of course I have to admit I haven't always done what's smart.

[Robert Jones]

Here on the Ms Gulf Coast, we are prone to hurricanes. the last claim on my house was in 1969, on my little rental house in 1985. State Farm just received a 16% increase last June. They are now asking for a 44% increase for next June. they claim this is due to payouts higher than premiums paid, and "losses in the stock market". They also said that they are pulling out of the state if they don't get the increase. Yessir I'm responsible for covering their losses. I wrote the state insurance commissioner, who said it was his job to provide residents with responsible insurance providers at fair costs. I just don't know when he's gonna start. Thieves are thieves. I'm very seriously considering self insuring my property. Bobby

[Alistair Hosie]

Steve about ten years ago I bought a comercial building for business purposes
( an old cottage hospital)which I converted to a supermarket. I asked the insurser to give me a quote he did so and I topped it up by tenty thousand just to be on the safe side.After a fire had taken place they told me I was underinsured and only paid me out sixty percent .I pointed out that I had actually paid more than they reccomended but their argument was that was just a guestimate at the rebuild value by a broker not an agent of theirs so they are all corrupt and will do anything to get the price of a claim nullified or reduced by any means, in my opinion.Alistair

[ochster]

Oh mann what did I start...

Got home today, and get the mail. Letter from my insurance agent, whom I had the conversation with. It say's; This is just a copy for our file, to indicate we disussed you having a seperate building on your property, housing machine tools and the like, and that it is NOT covered under your homeowners policy. I would like you to sign this and return ASAP...

I was enraged to say the least... I'm not sure, but seems this definately could be used agoinst me somehow.