Double check your insurance policy!!!

[PWC Repair]

This comes up every now and then, and I know lots of us are underinsured........including me!
I spent my weekend (with wifeys help) shoveling through my buddies burnt shop trying to salvage and clean his tools etc. I have worked many hours in this shop. He was insured but its not nearly enough, about a third of what he needs. Mine comes due in June and I'm looking for better insurance right now. Make sure you have enough!!

 

[LXCam]

Oh that's heart breaking.

 

[L5wolvesf]

WOW, nothing left - that completely *****. What happened?

 

[Richard Cranium]

man so many shops burn to the ground.

 

[James-W]

I have tried to clean tools after a fire, they can be cleaned up to a point, but they just aren't the same as they were before the fire.

A lot of people are under-insured and that is very unfortunate. Problem is, nobody thinks they will ever have a fire so they have a minimal amount of insurance.

 

[PWC Repair]

WOW, nothing left - that completely *****. What happened?

A barely smoldering trash fire lit back up while he was gone fishing, burnt across the grass, and lit up the shop.

 

[tarmy]

His fire...or a neighbors?

Hope your buddy gets a fair settlement, and that nobody got hurt...

 

[PWC Repair]

His trash fire, insurance is paying amount he had less deductible. I think so far I'm the only casualty, ran a soot covered 16d nail right into my heel. There was an all original '68-70 Bronco sitting right out in the middle of that pic. Firefighters kept water on it constantly while others worked structure. That night he pumped the throttle a couple times and backed it out. It's mostly ok save for sort of droopy/deformed tail and marker lights.

 

[James-W]

His trash fire, insurance is paying amount he had less deductible. I think so far I'm the only casualty, ran a soot covered 16d nail right into my heel. There was an all original '68-70 Bronco sitting right out in the middle of that pic. Firefighters kept water on it constantly while others worked structure. That night he pumped the throttle a couple times and backed it out. It's mostly ok save for sort of droopy/deformed tail and marker lights.

It is even worse that it was his own trash fire. At least nobody was injured, well, except for you.

 

[77Birdman]

I suffered the same fate last October. I was working on a car in my barn and an angle grinder spark caught it on fire. I lost 30 years worth of contracting tools, thousands of bd ft of lumber,and many many car parts, including the car I was working on. I am a builder and my commercial policy covered the building which was good. They covered my business tools of which I didn't have nearly enough. I ended up about .10c on the dollar for those. My homeowners policy covered car parts and personal tools of which I had plenty of insurance, just not that much to claim. I am still rebuilding and had planned on starting a thread once I'm finished in another month or so. All inefficiencies I had with the ins. were my fault for not having enough coverage.

 

[Showkey]

This comes up every now and then, and I know lots of us are underinsured........including me!
. Mine comes due in June and I'm looking for better insurance right now. Make sure you have enough!!

We have had many discussions on this topic in the GJ. Most home owner policies cover outbuilding at a max of 10% of the home values. Simply put a $300k home cover the shop at a max of $30k building and contents. As we all know $30k builds a shell of garage in many areas and $30k in tools is very common in the GJ. The collector vehicles are covered under their own policy and NOT part of the home owner coverage.

If you have business supplies or equipment in the garage that’s a whole other area of coverage that is NOT covered by the normal Home owners policy.

The problems becomes worse witha modest home at $100k and very nice well equipped hobby shop witha $200k replacement value..........means the shop Is basically uninsured when you do the math.

 

[ratdoggy]

That ***** and it can happen with something as simple as not taking a gas cap off and depressurizing the fuel system...

 

[leog]

Really a shame. We all must remain vigilant as to fire hazards. Simple thing can cause so much destruction.

 

[SouthLake]

it is very important to make sure you have "recoverable depreciation" on your policy. the premium for this is typically minimal, but if you have a loss it will go a very long way.

example...
every single item you lose will be marked down at LEAST 25%-35% for depreciation by the insurance company, sometimes more. Therefore, when you go to replace your ****, you will only get $65 to replace a $100 item, repeat this for every single item lost across the spectrum of high value items. You come out losing a significant amount of money, replacing your stuff. With recoverable depreciation, you replace said item, submit difference, and the insurance company reimburses you the difference. one extra step, but it goes a long way.

another example is your $10,000 roof is a 20 year roof and its 10 years old. Insurance company will say, well its only worth $5000 now since its depreciated halfway through its life. good luck getting a roof for 5k. with the clause, you will get the full value of the roof back.

Having suffered a fire I was thankful this was in the policy. if you are LUCKY you will come out almost even. People who don't have this clause, will come out way behind.

OP sorry for your loss, glad everyone is ok.

 

[yeldogt]

Have mentioned before ... lost my house and three cars when my tractor went up .. outside next to my kitchen. It happens in flash ... literally.

Many don't understand insurance .. fewer still read the policy -- end up being underinsured. What people don't understand -- additional items that make for a good policy don't add very much cost. Once the basic property is underwritten ....you have paid the lions share. Ask simple questions ... how do you value this? How would I be paid in a loss?

People have to stop using "full coverage" and "replacement value" .. both can get you in trouble ... meaningless terms w/o reading policy.

As pointed out .. a modest house <300k will not have enough coverage for a separate building. But, it is easy to increase .. and cheap.

Also - the value of any item has to be determined. Is it when you purchased it or when the fire (loss) occurred? Many .... if not most policies that provide current value will only give you the higher value of an item if you buy it. Otherwise you are back to actual cash value (ACV). What if you can't buy the item .. or do not want to? Also ..many policies have item limits ..... so if you only have $2500 for tools .. that's all you get regardless of the loss. It's like sewer backups on homeowners policies -- some limit the loss to $2500.

Without proper insurance -- the adjuster writes you a 15k check .... and walks away.

Some companies only write the less desirable policies -- maybe that's why they are cheaper.

You also need more insurance vs what it will cost to rebuild -- the cost to remove an old structure is very expensive .. and if you don't have code insurance and the building location needs to be built differently ..or a special permit. You have to pay.

Another item for homeowners -- where do you live if the house is damaged. Some policies match the house you have ..... others put you in a motel .. and really limit the time.

 

[marineman]

Wow now you guys have me thinking, I need to go home tonight and read all of my policies word for word. Any insurance experts know if you're better off doing separate policies for things with much value? That's what we did when we did our homeowners, jewelry, guns and tools are all on separate policies only cost $5-10 per month for each policy.

 

[yeldogt]

Wow now you guys have me thinking, I need to go home tonight and read all of my policies word for word. Any insurance experts know if you're better off doing separate policies for things with much value? That's what we did when we did our homeowners, jewelry, guns and tools are all on separate policies only cost $5-10 per month for each policy.

It depends on the company. I have Chubb .. they have very few items that require separation with a full loss. I use higher deductibles to keep cost lower ... I'm really only worried about the big loss .. and Chubb waves the deductible with any large loss anyway.

I cover myself with a valuable articles policy on things that could get damaged -- I have expensive furniture/ art ... it adds under $100 to the policy. This would cover me should someone spill a glass of wine ...etc.

 

[mike93lx]

There is no reason to wait if you are under insured. You should be able to make changes at any time... this isn't group sponsored health insurance

 

[Dusten]

Called my insurance just now. My home is insured for $540,000 so the shop was insured at 10%. They doubled that to 108,000(highest they'd go) for just $150 a year increase in premium(I pay about 1450 a year now).

Thanks for the tip guys.

 

[clutchee]

Just asked about this a few months back, two different companies.
Both WOULD NOT insure tools based on home owner, just having tools. Basically fell under contents, which was 1% of value, I tried explaining that unless they stole everything I’d be out the cost.

BUT

If I had a business then they could cover them.....
I’m still weighing my options of what to do. Trust me, looking at my box and knowing it’s not covered makes me mad!

 

[yeldogt]

Just asked about this a few months back, two different companies.
Both WOULD NOT insure tools based on home owner, just having tools. Basically fell under contents, which was 1% of value, I tried explaining that unless they stole everything I’d be out the cost.

BUT

If I had a business then they could cover them.....
I’m still weighing my options of what to do. Trust me, looking at my box and knowing it’s not covered makes me mad!

1% ?? What did they have a sub-limit ?

How much are the tools worth ?

Insurance starts getting expensive when you try to insure smallish amounts. The point is to have the best coverage possible with a great company so when the big fire hits you are covered. Trying to insure 4k of tools is expensive because you need lower deductibles .. and really you are paying a lot for a few k of coverage.

When my fire hit -- a lot of the stuff I had ...... did not want to replace. Stuff you want at 30 is not what you want at 45 ... and I bet not 65.

 

[T_R]

I don't have any insurance. We have business liability insurance and that's it.

Every story like this ends with somebody getting screwed over by an insurance company and getting nothing or pennies on the dollar. I don't even see the point.

We could rebuild our home or business right now cash out of pocket and be just fine. What is the incentive for me to pay good money knowing I wouldn't get it back?

 

[zmotorsports]

Man, that is heartbraking to see.

The first thing we did when we were looking to move was get quotes on added insurance for the shop that I was going to build as well as tools/equipment. I had added insurance on my last place but had to due to running a business in it. This shop I'm not running a business but it is three times the size and would cost much more to rebuild as well as houses our coach and bikes so I wanted to ensure we were covered in the "what if" scenario.

 

[yeldogt]

I don't have any insurance. We have business liability insurance and that's it.

Every story like this ends with somebody getting screwed over by an insurance company and getting nothing or pennies on the dollar. I don't even see the point.

We could rebuild our home or business right now cash out of pocket and be just fine. What is the incentive for me to pay good money knowing I wouldn't get it back?

Most of the stories are people fighting over a few K in car values ... or other relatively minor items. Don't get me wrong -- having a major loss is incredibly stressful .. and you will have some disagreements. Not having coverage is unthinkable IMO.

 

[garagelogician]

I don't have any insurance. We have business liability insurance and that's it.

Every story like this ends with somebody getting screwed over by an insurance company and getting nothing or pennies on the dollar. I don't even see the point.

We could rebuild our home or business right now cash out of pocket and be just fine. What is the incentive for me to pay good money knowing I wouldn't get it back?

Not all of us have that kind of cash on hand, and many that do are counting on that money for their retirement/etc.

 

[ptschram]

Not all of us have that kind of cash on hand, and many that do are counting on that money for their retirement/etc.

Bingo. And one could easily argue that is a foolish cash/business management practice as those funds ought to be invested to grow both personal and business wealth.

Reminds me of one of my sisters-in-law making a comment that she'd just take some of the cash out of the safe to buy/pay for whatever the topic under discussion.

To this day, I doubt she realized that she and her husband were the only ones in the room with that sort of liquidity and easy access to ten thousand dollars cash-but she does, but has no clue to how lucky she is her husband makes big bucks. I am scared for them that he keeps his job as high end retail just doesn't seem to be that stable today to me today, but they do. Especially when he blows it on hot rod motorcycles (Ducati race bikes, Norton cafe racers) and hot rod Italian handguns (one of which was stolen out of his Gelendewagen because he didn't want it to interfere with the fit of his suit and he didn't feel like carrying his briefcase)

Further, I'm surprised customers don't require a policy to insure business continuity to ensure their product flow remains constant.

 

[gerryw]

Im with State Farm, i have unlimited coverage for my tools under my house policy (attached garage)
Was very skeptical, called agent to confirm.
I told her i had a ton of tools for personal use, she said “must be Snap On”
She said “document document document” and you will be covered.
I now have photos of every square inch of my garage ( stored in the cloud)

Gerry

 

[Tinkerman66]

but has no clue to how lucky she is her husband makes big bucks.

Always kind of bugs me when someone uses the word LUCK to describe another's financial situation. Wife makes "big bucks" and I can assure you luck had nothing to do with it.

 

[zmotorsports]

Always kind of bugs me when someone uses the word LUCK to describe another's financial situation. Wife makes "big bucks" and I can assure you luck had nothing to do with it.

Couldn’t agree more. And we don’t make “big bucks”.

My wife has two sisters who play that game putting my wife on a guilt trip whenever she’s with them. Saying **** like you’re so lucky to not have to deal with car payments, not have to pay rent and have a house and so lucky to have someone able to fix ****. It’s not my wife’s fault that they have been married three times each because they always think the grass is greener somewhere else and play Disneyland moms giving their kids everything when they can’t afford it nor have earned it. I told the one it’s not luck it’s doing with what you have and planning a budget then sticking to it, not spending $20 when you have $10 in your pocket. That’s the way it worked for us but they figure that takes to long and they want it now.

 

[Tinkerman66]

Couldn’t agree more. And we don’t make “big bucks”.

My wife has two sisters who play that game putting my wife on a guilt trip whenever she’s with them. Saying **** like you’re so lucky to not have to deal with car payments, not have to pay rent and have a house and so lucky to have someone able to fix ****. It’s not my wife’s fault that they have been married three times each because they always think the grass is greener somewhere else and play Disneyland moms giving their kids everything when they can’t afford it nor have earned it. I told the one it’s not luck it’s doing with what you have and planning a budget then sticking to it, not spending $20 when you have $10 in your pocket. That’s the way it worked for us but they figure that takes to long and they want it now.

All 100% correct! ^

We started out married in a mobile home eating mac and cheese and Ramon noodles, both working full time while she went to college while barely keeping two cars running. She was able to obtain her double major, masters, and a doctorate in financial planning. 30 years later we have only a house payment and pay cash for our new cars. Bought some farm acreage for an investment that is paying for itself. My grandmother told us once how "lucky" we were. We corrected her.

 

[SarcasticDwarf]

Another tip: policies for detached strictures are greatly underestimating replacement costs. For example, SF had calculated that replacing a 950sf garage in a rural area was 20k. You would be lucky to get a slab poured for that price.

 

[T_R]

Couldn’t agree more. And we don’t make “big bucks”.

My wife has two sisters who play that game putting my wife on a guilt trip whenever she’s with them. Saying **** like you’re so lucky to not have to deal with car payments, not have to pay rent and have a house and so lucky to have someone able to fix ****. It’s not my wife’s fault that they have been married three times each because they always think the grass is greener somewhere else and play Disneyland moms giving their kids everything when they can’t afford it nor have earned it. I told the one it’s not luck it’s doing with what you have and planning a budget then sticking to it, not spending $20 when you have $10 in your pocket. That’s the way it worked for us but they figure that takes to long and they want it now.

Same here. Mine doesn't take any **** about how we do. She is always defending me and always gives me the credit for us being comfortable. We don't make big bucks either, I just made a lot of smart moves in the past like buying our property cash during the last real estate crash and we live well within our means.

We owe nothing, don't use credit cards or credit period, home is paid for and we have a used car dealership where we own the whole inventory, no floorplanning.

I really have no interest in investing or "growing my wealth". I feel a lot safer holding cash.

I think the whole insurance industry is scammy, I wouldn't even have liability if it wasn't a requirement.

 

[mike93lx]

I don't have any insurance. We have business liability insurance and that's it.

Every story like this ends with somebody getting screwed over by an insurance company and getting nothing or pennies on the dollar. I don't even see the point.

We could rebuild our home or business right now cash out of pocket and be just fine. What is the incentive for me to pay good money knowing I wouldn't get it back?

You insure what you can't, or don't want to, afford to replace. Pretty simple

 

[aafadca]

Timely topic! My policy on one house is supposed to renew in April but the company has been sending/calling to get "consent" to raise my premium more than 200.00! I guess in my state the premium is more than allowable without written approval. Between combined/multiple policies and discounts through my company, the rates have been pretty reasonable until now. Plus it's payroll deducted. Of course I've been checking around so all this information will be helpful. I'm definitely changing this week.

 

[Hawke]

I spent most of my working life in insurance. After a claim, I never heard the words "gee I'm glad I was fully insured."

The only advice I can give you, is to work out what it will cost to replace everything in 24 months time, and have a proper R&R policy.

 

[77Birdman]

I cant imagine not having insurance. When I had my fire, sure there was a lot of going back and forth with the adjuster, but it wasn't "fighting with them". I have a very good local agent who worked with me. My biggest reason for the shortcomings were my fault for being underinsured. When I wrote the police the agent asked what the contents were worth. Off the top of my head I guessed and said 16k. Doing the inventory and pricing items after the fire I had well over 100k worth of tools.

 

[stingry]

View media item 17850
This is what was left of my shop after a fire a few years ago. I will tell you my experience with my insurance company and you can draw your own conclusions. We lived on a rural acreage consisting of a house, the barn/shop and some other outbuildings. We had insurance with Farmers Mutual. The barn was finished inside and included a metalworking and woodshop plus storage. Needless to say, it was a total loss. I also lost a 1968 SS396 Chevelle that I was restoring. The car was insured with Grundy and they paid the agreed value on the car. I had pictures of everything in the barn plus receipts for most of the items. This is very IMPORTANT! I had REPLACEMENT value for the contents, also VERY IMPORTANT! I had to inventory everything that was destroyed and determine the cost to replace the various items. Without the pictures, there was no way that I could have recalled all the tools and other items that were lost. After the inventory was completed, I gave it to them and they gave me the OK to begin replacing the items. If I decided not to replace an item, they would only pay 60% of the replacement value in cash, so I replaced just about everything, even if I no longer needed it. I had some antique and collectable items, mainly antique woodworking tools. They paid 100% cash for these items. It took several months, some negotiating and a lot of time, but I finally replaced everything (almost $110,000 worth if tools). I had the building insured for $40,000 and was paid that. A little low but that was my fault.

The only loss that wasn't covered were the parts that I had acquired for the Chevelle restoration, something in the fine print that I didn't pick up on.

All in all, it was a positive experience with Farmers Mutual. Again, take what you want from my story, but I cannot imagine not having insurance.

 

[yeldogt]

View media item 17850
This is what was left of my shop after a fire a few years ago. I will tell you my experience with my insurance company and you can draw your own conclusions. We lived on a rural acreage consisting of a house, the barn/shop and some other outbuildings. We had insurance with Farmers Mutual. The barn was finished inside and included a metalworking and woodshop plus storage. Needless to say, it was a total loss. I also lost a 1968 SS396 Chevelle that I was restoring. The car was insured with Grundy and they paid the agreed value on the car. I had pictures of everything in the barn plus receipts for most of the items. This is very IMPORTANT! I had REPLACEMENT value for the contents, also VERY IMPORTANT! I had to inventory everything that was destroyed and determine the cost to replace the various items. Without the pictures, there was no way that I could have recalled all the tools and other items that were lost. After the inventory was completed, I gave it to them and they gave me the OK to begin replacing the items. If I decided not to replace an item, they would only pay 60% of the replacement value in cash, so I replaced just about everything, even if I no longer needed it. I had some antique and collectable items, mainly antique woodworking tools. They paid 100% cash for these items. It took several months, some negotiating and a lot of time, but I finally replaced everything (almost $110,000 worth if tools). I had the building insured for $40,000 and was paid that. A little low but that was my fault.

The only loss that wasn't covered were the parts that I had acquired for the Chevelle restoration, something in the fine print that I didn't pick up on.

All in all, it was a positive experience with Farmers Mutual. Again, take what you want from my story, but I cannot imagine not having insurance.

This is a valuable example of how the word "replacement" can trip you up after a loss. Most people see "replacement" on a policy and stop reading .. I'm covered they say and file the policy away.

Trust me .. after 25 years of "stuff" ... it adds up. Our insurance company hired an outside firm to make the contents list. Three guys w/ laptops spent most of the week going through the house and looking at our pictures. The number was staggering .. and a good chunk (a very big chunk) I had no desire to replace. Knowing something about insurance ...my policy had no restrictions on cashing out contents at current full value ... after a few weeks of back and forth on various items -- they cut me a check. Take pictures and videos

 

[77Birdman]

Stingry, kinda of the same way it worked for me. Except i was underinsured by my own fault. I had a trans am I was restoring and no coverage on it, so that was a total loss, however any loose parts for it that I had stored my homeowners did pay for.

 

[adamant118]

Sad. It can happen to all of us.. but how can we go about looking into it without getting taken over by the insurance companies? It seems like every time we go to reevaluate our insurance it's time to go up considerably and come to find out we really didn't get that much coverage. Back in the day to insurance companies and their agents had your back now it's just a freaky business where they can up your rates and still have hidden loopholes. So to educate all of us and for those who know a lot of this, could you post some tips on how to go bad it without getting taken advantage of by the insurance agent?

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