Ho do you value tools for insurance?

[rkevins]

So long story short our insurance company is having to re write a policy. I have tools and have inherited tools. How do you value your tools for insurance, I have tools that are hand tools, power tools, chainsaws, tools that are 50+ years old that are still made today. So do you list all your tools and find a cost today then depreciate them or go by replacement cost?
Not sure how the new policy will work yet we don't have to change until later in the year.

 

[iamhomeless]

Talk to your insurance agent to begin with soon how they want it handled. My guy just wanted me to do an inventory and put the list somewhere safe. Although if the value of your tools will eclipse the value of the building they are in, the insurance company might want to be made aware of that at the outset

 

[nadogail]

At a minimum, they should be insured for Replacement Cost.

 

[Death Row Dave]

Mine are probably 3x building value . Insurance co ., says as long as you are not using them to make a living covered by farm policy , along with tractors and equipment . Also if you have old car or bike and no current road registration they are covered also . I don’t fall into cars with no current registration .

 

[johnre]

Hand tools and portable power tools are all listed in an inventory, itemized by part or model number if available.

Stationary power tools all have model and serial numbers, and while they may not be currently manufactured, they most all have similar things being currently manufactured.

But there's no special coverage on any of it, so I guess it just defaults to whatever limits apply to household contents, and of course depreciation for age. I should probably check on what those are.

 

[LeeG]

When I had my insurance broker shop for a new policy, we specifically found one that had extended coverage on contents, no limit on tools (some policies have a limit for categories of items), and high enough limit to cover replacement cost on everything.

The thing is, you typically have to actually replace the stuff, not just get a big check, so the problem many people run into with claims is that they don’t actually know what they have. Photos, videos, and itemized inventory lists go a long ways to making the claims process easier.

I could go on about it, but many times, the problems people have with insurance claims are at least partially self inflicted.

Lee

 

[jack stand]

See what the policy ensures under the personal property section, then itemize any "big ticket" items just as you would specially expensive jewelry, antiques, etc.
Be clear on what documentation is necessary for a claim and value this information (pictures, etc) as THE biggest asset that you're concerned about.
Everything else depends on it.

 

[Jsf721]

If they are important and you would replace them then at replacement cost. If not then as contents and you will get a depreciated value.

replacement insurance is nore expensive on cars and "stuff"

 

[txvwnut]

I tried this years ago with my business insurance and was told there is basically no replacement value for the hand tools as the insurance company over depreciates the value leaving them basically worthless after you've used them for a year. Boxes and machinery were a different story and I forgot what the percent of value was as this was in the 80's. Tried it again in the middle 90's and told basically the same thing. I'm surprised the OP's insurance company is considering it.

 

[Steve_P]

Typical homeowner insurance only covers for like $1k each for tools, guns, jewlery..... You need to talk to your agent for a modified policy, discuss what you want, and then actually read the policy.

 

[crewchief888]

Replacement value. Tools guns ect

 

[Steve_P]

I tried this years ago with my business insurance and was told there is basically no replacement value for the hand tools as the insurance company over depreciates the value leaving them basically worthless after you've used them for a year. Boxes and machinery were a different story and I forgot what the percent of value was as this was in the 80's. Tried it again in the middle 90's and told basically the same thing. I'm surprised the OP's insurance company is considering it.

I have a friend that got a home policy mod for tools. He has a lot of woodworking tools, but table saws and router tables aren't really on the "let's steal this" list if you get robbed- they want guns and jewelry; **** you can sell tomorrow that you can easily carry. Anyway, he did get a policy extension, but he also pays something like $500 extra a year for it. I need to ask him if he's still carrying it as I personally didn't see the cost benefit analysis panning out. He lives in a fancy subdivision with houses 50' apart and with WFH and stay at home moms, I'd think that someone would call the police if a box truck showed up one day and started emptying out the house. At least I have the people across the street watching out for me when I'm gone.

 

[dscheidt]

I had an agreed value inland marine policy when I was working in a shop.

I have a friend that got a home policy mod for tools. He has a lot of woodworking tools, but table saws and router tables aren't really on the "let's steal this" list if you get robbed- they want guns and jewelry; **** you can sell tomorrow that you can easily carry. Anyway, he did get a policy extension, but he also pays something like $500 extra a year for it. I need to ask him if he's still carrying it as I personally didn't see the cost benefit analysis panning out. He lives in a fancy subdivision with houses 50' apart and with WFH and stay at home moms, I'd think that someone would call the police if a box truck showed up one day and started emptying out the house. At least I have the people across the street watching out for me when I'm gone.

Presumably he's covered for losses from other hazards, like fire?

When I was working in a shop, I had an inland marine policy with an agreed value for my tools and other personal property used for work. In the event of a total loss, they'd have cut me a check for the agreed amount. I had to document that it was a reasonable number (my snap on dealer provided a list of what I'd bought from him, with their current list prices, and I gave a detailed inventory and photos of everything.) It cost a bit more than an actual cash value policy, but not a whole lot.