Unofficial estimate for insurance purposes

redking

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Howdy - I recently discovered my homeowners insurance policy is lacking in terms of musical instrument coverage, so I am pulling together an itemized list of all my instruments to take to my insurer to obtain more coverage. Since a number of my guitars are "kit guitars" I think I should include a dollar value for the labour involved in finishing and assembling a kit guitar or else I will potentially get hosed on that lost value (since I put them all together - I have no invoices to refer to for this labour). So, what is a good ballpark number to finish a bare wood parts kit and then assemble all the parts and set it up? Any difference between a bolt on (Warmoth) vs. set neck (Precision guitar kits)? [I'm not looking for a firm quote - just a number to put on my calculation of the coverage that I would need.]
Thanks!
 

redking

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Find examples of finished kit guitars on eBay and reverb listed and past sold and create a value data base from that.
Why would I do that? Kit guitars depreciate a huge amount (like 50% or more) after the original owner builds it and then goes to sell it - I would be shooting myself in the foot (wouldn't even cover the cost of the parts). I am going to add up all the cost of the parts plus the cost of assembly to get my replacement cost.
 

BadPenguin

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They won't accept your time in building them. Are you a luthier who builds for profit? That they would accept. Building for yourself? What the kit cost is what they will insure for.
 

toymaker

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Best bet - inland marine with a list of each and an "agreed value" on anything over 1k-1500

There are a few specialty insurers too - but a standard homeowners should be able to write these on an inland marine/personal articles floater.

Depending on how much you list them at - an underwriter may want more documentation (example - 5k is unlikely to raise an eyebrow...50k however they might want photos/detailed descriptions)

Agreed value- you get what you pay for...so if you lose it at any stage of work = you get paid what you agreed on value at.
 

RPBThree

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Howdy - I recently discovered my homeowners insurance policy is lacking in terms of musical instrument coverage, so I am pulling together an itemized list of all my instruments to take to my insurer to obtain more coverage. Since a number of my guitars are "kit guitars" I think I should include a dollar value for the labour involved in finishing and assembling a kit guitar or else I will potentially get hosed on that lost value (since I put them all together - I have no invoices to refer to for this labour). So, what is a good ballpark number to finish a bare wood parts kit and then assemble all the parts and set it up? Any difference between a bolt on (Warmoth) vs. set neck (Precision guitar kits)? [I'm not looking for a firm quote - just a number to put on my calculation of the coverage that I would need.]
Thanks!

Why would I do that? Kit guitars depreciate a huge amount (like 50% or more) after the original owner builds it and then goes to sell it - I would be shooting myself in the foot (wouldn't even cover the cost of the parts). I am going to add up all the cost of the parts plus the cost of assembly to get my replacement cost.
Insurance professional here. Like another poster said, they're not going to indemnify you for your time spent putting together the project. They're only going to insure the kit. That's like saying: my kids bunk bed were burned down in the fire. When I bought it I had to put it together. Therefore, they should pay me for a new bunk bed and time spent putting it together. It doesn't work like that nor are insurance policies written that way. In fact, they're probably specifically written to exclude the time spent putting it together.

Honestly, for your kit builds, I believe just accounting for them under personal property or contents, whichever terminology they use, should be sufficient under your homeowners policy. You set the personal property limit so make sure it covers all your property in your home.

However, for special property (not the technical term for it), like jewelry, valuable antiques, and, for relevance to this forum, valuable guitars, you need an article floater. They're actually pretty cheap. Should be well less than $75 for an annual policy. I have an article floater for my wife's engagement ring (also a family heirloom for a few generations) valued at $13k. Costs $73 for the year. I was required to have the ring officially appraised and submit the documentation to my carrier. I've been meaning to but keep forgetting to add my two PRS guitars and my Gibson Les Paul to the floater, which they will probably require documentation to show why they're all worth around $8k altogether.

If you insist on insuring your kit builds for more than what the kit was purchased for, then you would need to take it to a luthier who can appraise it for you as is, and provide documentation accordingly. If you are a well established luthier yourself, they may not accept it due to conflict of interest. Edit: They may not accept your appraisal, not that they won't accept insuring it - just to clarify.

For this coverage, I recommend State Farm. Unlike another poster said, you don't need a specialized carrier for this coverage. The larger companies we know of can do this easily, cheaply, and they're easy to work with.

Also, an article floater is insanely great insurance coverage. Your general homeowners policy is one of the best you can buy, but an article floater in regards to personal property is even better coverage. It will cover just about everything.

As you can see I nerd out on insurance quite a bit, so if you have more questions on insuring your guitars, feel free to ask.

Best bet - inland marine with a list of each and an "agreed value" on anything over 1k-1500
Inland Marine is not designed for this type of personal property. Its designed for businesses like contractors hauling construction equipment, companies hauling freight, businesses delivering goods, etc. I mentioned above that an article floater is what is needed here.
 
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redking

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Insurance professional here. Like another poster said, they're not going to indemnify you for your time spent putting together the project. They're only going to insure the kit. That's like saying: my kids bunk bed were burned down in the fire. When I bought it I had to put it together. Therefore, they should pay me for a new bunk bed and time spent putting it together. It doesn't work like that nor are insurance policies written that way. In fact, they're probably specifically written to exclude the time spent putting it together.

Honestly, for your kit builds, I believe just accounting for them under personal property or contents, whichever terminology they use, should be sufficient under your homeowners policy. You set the personal property limit so make sure it covers all your property in your home.

However, for special property (not the technical term for it), like jewelry, valuable antiques, and, for relevance to this forum, valuable guitars, you need an article floater. They're actually pretty cheap. Should be well less than $75 for an annual policy. I have an article floater for my wife's engagement ring (also a family heirloom for a few generations) valued at $13k. Costs $73 for the year. I was required to have the ring officially appraised and submit the documentation to my carrier. I've been meaning to but keep forgetting to add my two PRS guitars and my Gibson Les Paul to the floater, which they will probably require documentation to show why they're all worth around $8k altogether.

If you insist on insuring your kit builds for more than what the kit was purchased for, then you would need to take it to a luthier who can appraise it for you as is, and provide documentation accordingly. If you are a well established luthier yourself, they may not accept it due to conflict of interest. Edit: They may not accept your appraisal, not that they won't accept insuring it - just to clarify.

For this coverage, I recommend State Farm. Unlike another poster said, you don't need a specialized carrier for this coverage. The larger companies we know of can do this easily, cheaply, and they're easy to work with.

Also, an article floater is insanely great insurance coverage. Your general homeowners policy is one of the best you can buy, but an article floater in regards to personal property is even better coverage. It will cover just about everything.

As you can see I nerd out on insurance quite a bit, so if you have more questions on insuring your guitars, feel free to ask.



Inland Marine is not designed for this type of personal property. Its designed for businesses like contractors hauling construction equipment, companies hauling freight, businesses delivering goods, etc. I mentioned above that an article floater is what is needed here.
I understand what you are saying - if I were to take this to an absurd example, if I built all the furniture in my home over a period of many years and had a total loss, I would only be able to claim for replacement cost of a truckload of lumber? Or let's say, I actually built my home and saved $100k in labour in doing so, years later I can only claim for the replacement cost of the building materials? (I'm sure contents vs. the structure itself is treated differently, but you get the point) Would I not have an argument that replacement cost is to provide me with the the thing that I lost, and not simply the components of the thing I lost? If that was the situation I was stuck with, then how far would I get if I quoted the replacement of the Warmoth parts as being finished vs. unfinished? Eg, a raw wood strat body is $100 vs a painted strat body is $250. Even though I finished the body that I have, I can buy a painted body from them, so that at least I have something comparable to what I lost?
On a different note, let's talk about amps - I have a collection of vintage amplifiers that I purchased in poor condition and then had to spend roughly $500 on each one with an amp tech to get them restored to operational condition - how would those be treated? Purchase plus the restoration, or purchase cost only?
 
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RPBThree

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I understand what you are saying - if I were to take this to an absurd example, if I built all the furniture in my home over a period of many years and had a total loss, I would only be able to claim for replacement cost of a truckload of lumber? Or let's say, I actually built my home and saved $100k in labour in doing so, years later I can only claim for the replacement cost of the building materials? (I'm sure contents vs. the structure itself is treated differently, but you get the point) Would I not have an argument that replacement cost is to provide me with the the thing that I lost, and not simply the components of the thing I lost? If that was the situation I was stuck with, then how far would I get if I quoted the replacement of the Warmoth parts as being finished vs. unfinished? Eg, a raw wood strat body is $100 vs a painted strat body is $250. Even though I finished the body that I have, I can buy a painted body from them, so that at least I have something comparable to what I lost?
On a different note, let's talk about amps - I have a collection of vintage amplifiers that I purchased in poor condition and then had to spend roughly $500 on each one with an amp tech to get them restored to operational condition - how would those be treated? Purchase plus the restoration, or purchase cost only?
Yes, I believe you do have an argument there, and the entire purpose of an insurance policy is to indemnify - put you back to where you were as if nothing would happen. Obviously, there's no perfect way to do this. Replacement Cost does take into account labor costs which would add support to your argument there. In your example of building your own home, the insurance company would calculate the cost of the cheapest way to rebuild your home back to the way it was - which would most likely be benchmarked by your regular construction company, and your building limit listed on your policy should probably reflect this number rather than what you built it for.

As for your guitars, finished v unfinished, you could include the costs of the materials used to finish it. If insured under homeowners policy, and these things became difficult to value, the carrier would most likely benchmark it against similar guitars sold the same way. But then that depends on the wording of your policy, and how much work they want to put into the claim. If its a sizable claim, then they may look into it more. If not, they probably will not worry about it and write you a check anyways or if its a total loss, they may just write you full limits check and save the costs of hiring professionals to itemize, benchmark, and value everything you have lost.

We're getting into nonessential semantics a bit. At the end of the day, if you want to be sure your guitars are insured then buy an article floater.

Your vintage amps I would highly recommend adding to article floater if you want them insured. That's a great example of items that need to be insured on an article floater and not under homeowners policy. In our continuing education classes the instructors always use vintage/antique rugs as an example. A carrier will only pay you for the needle and thread used to create the rug and not its true worth as a vintage/antique carpet. So the insurance company will only replace the speakers, wires, etc. for your amp (not literally just pieces to clarify, they will just give you the money to buy a new non-vintage amp).

In conclusion, if you lose your guitars and amps in a fire, the company is going to buy you a new amp and guitar. But its not going to be the vintage, one-of-a-kind guitar amp amp you originally had. If you want to be reimbursed for vintage, one-of-a-kind items then schedule it onto an article floater.

Edit: Also, just a thought, many carriers will endorse an article floater to your homeowners policy. You're agent/company will be able to advise whether thats possible or if its better to go with a separate article floater policy.
 

redking

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Yes, I believe you do have an argument there, and the entire purpose of an insurance policy is to indemnify - put you back to where you were as if nothing would happen. Obviously, there's no perfect way to do this. Replacement Cost does take into account labor costs which would add support to your argument there. In your example of building your own home, the insurance company would calculate the cost of the cheapest way to rebuild your home back to the way it was - which would most likely be benchmarked by your regular construction company, and your building limit listed on your policy should probably reflect this number rather than what you built it for.

As for your guitars, finished v unfinished, you could include the costs of the materials used to finish it. If insured under homeowners policy, and these things became difficult to value, the carrier would most likely benchmark it against similar guitars sold the same way. But then that depends on the wording of your policy, and how much work they want to put into the claim. If its a sizable claim, then they may look into it more. If not, they probably will not worry about it and write you a check anyways or if its a total loss, they may just write you full limits check and save the costs of hiring professionals to itemize, benchmark, and value everything you have lost.

We're getting into nonessential semantics a bit. At the end of the day, if you want to be sure your guitars are insured then buy an article floater.

Your vintage amps I would highly recommend adding to article floater if you want them insured. That's a great example of items that need to be insured on an article floater and not under homeowners policy. In our continuing education classes the instructors always use vintage/antique rugs as an example. A carrier will only pay you for the needle and thread used to create the rug and not its true worth as a vintage/antique carpet. So the insurance company will only replace the speakers, wires, etc. for your amp (not literally just pieces to clarify, they will just give you the money to buy a new non-vintage amp).

In conclusion, if you lose your guitars and amps in a fire, the company is going to buy you a new amp and guitar. But its not going to be the vintage, one-of-a-kind guitar amp amp you originally had. If you want to be reimbursed for vintage, one-of-a-kind items then schedule it onto an article floater.

Edit: Also, just a thought, many carriers will endorse an article floater to your homeowners policy. You're agent/company will be able to advise whether thats possible or if its better to go with a separate article floater policy.
Thanks for your input - I see it as a 2 way education process when dealing with your insurer - they should educate the homeowner on what is being covered, and why, and the homeowner needs to educate the insurer on the items they have that are being covered as I'm sure there are alot of unique situations out there, not just musical instruments.
 

fatdaddypreacher

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this information exchange has been perhaps one of the most interesting, informing and productive exchanges i have seen in a long time. great logic involved and much learned. i feel many viewers will learn from this. thanks guys. i love this forum
 

moreles

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As others have noted, you time is treated as a hobbyist activity and the value is only in materials, and depreciated at that since all the parts are now used. I believe that standard is general worth. Personal value is irrelevant, and the standard is based on the general public, not collector, fan, or even player value. Parts guitars are seen as... parts.
 


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