Use of Homeowner Policies to Insure Musical Instruments

[Ivan Kelsall]

djweiss - many thanks. The total value of my instruments is much less than the $30K US (£19 UK approx.),but for an insurance premium of $28 US ( £13 UK) a month,it might make sense for me to try to contact Heritage to see if they insure outside the US - which i doubt,
Ivan

[Dale Ludewig]

I have Heritage. Based on what I was told, they'll cover virtually anything, including dropping my own instrument during a job or if someone else does it. Basically anything unless you leave you leave your instruments in a vehicle with the door open and walk away for a half hour. My premium is about $450 for quite a lot in coverage. And they cover shipping insurance. One or two instruments shipped and insured a year and the premium is paid for. They probably know that people with expensive instruments are their best bet. We don't want anything to happen to them and will do everything possible to avoid a claim.

As to riders on homeowner policies, look out. My "former" policy agency took a fair chunk of change for over 25 years on a marine policy to cover my instruments. Last year I realized I needed to increase my coverage significantly and called them. They told me I wasn't covered and hadn't been ever because I "play out". I asked why they hadn't told me this and had been collecting my premiums all these years. I said that they knew from the beginning that I play out frequently. Their response: because I hadn't asked. My response: we're done. Off to Heritage. I hope never to have to make a claim but feel I'm pretty much covered.

[HarveyB]

We have USAA and I've been told, but haven't read yet, that we are totally covered as long as we don't get payed using our instruments. I plan on looking over the policy today but has anyone had any dealings with them in this regard?

[Joe F]

When I got my Clark F5 last year, I checked with my homeowners insurance carrier (State Farm) about coverage. Not only wouldn't they cover it if it was used for paid gigs, but even going to an open jam at a coffee shop where there are other people listening could be construed as "professional" use. I ended up going with a musical instrument policy from Anderson Group, which went very smoothly.

[Tim2723]

But would they take someone like me?

[Elliot Luber]

Right. Scott was forwarding a marketing email. If a guy from Heritage were participating in this conversation he would probably give a more balanced conversation too. The point of a marketing email is to get such a conversation going, and it seems to working. I just wish I had enough mandolin to benefit from a $250 per year investment here.

[JOMAC]

We have our mandolins and guitars covered under a personal articles policy through State Farm.

[mrmando]

But would they take someone like me?

How often do you break an Ovation? If you broke one every year, you might save some money with a Heritage policy. If you broke one every three years, you'd be just about breaking even with a Heritage policy. If you broke one less often than that, then you'd be paying more in insurance premiums than you would to replace the mandolin.

[lklose]

A pro friend of mine had insurance through the Musicians Union, either Clarion or Heritage, the two US companies that specialize in instruments. He had a Celtic harp that literally exploded one day in his living room. The claim for full scheduled value was paid within a week after providing the usual common sense information.

I get concerned about the "pay for play" exclusion because it's so easy to step over the line. Our recreational band recently picked up a couple of paying gigs (an honorarium, really) and this apparently puts me outside any coverage at all. I can see excluding coverage for ocurrences at such a gig, but once I've accepted money, am I excluded for all time in all situations for all instruments?

Another pitfall with homeonwer's policies: "replacement value" coverage usually requires the purchase of a replacement item within a limited time period. I had an expensive custom bicycle stolen one time and it was touch and go whether the builder could finish the replacement in time (6 months) to obtain full repayment. If not, the payment was based on the depeciated current market value. If your favorite builder has a 3 year waiting list, you might be SOL with a homeowner's policy. Read the policy carefully. If you decide for personal reasons not to replace a lost or damaged instrument, you may only get a much devalued payment.

[allenhopkins]

But would they take someone like me?

No, you have a pre-existing condition.

[Ivan Kelsall]

Dale's point seems pretty typical of insurance companies that i've had experience with. I've always felt that companies that take a payment for insurance, knowing full well that your insurance is voided by - in this case 'playing out', & not informing the customer,are commiting fraud.
If you purchase any item of goods,if it's NOT what it purports to be & is sold as something OTHER than what it actually is,that's FRAUD - clear & simple !!!. If,on the other hand,the seller actually tells you that what you're buying is NOT what you asked for,it's your choice whether to buy or not. In the case of Dale's company,if he told them that he 'played out' & they provided him with a policy knowing that it didn't cover him for 'playing out' & took his money,leaving him to believe that he was covered - that's FRAUD or at the very least a 'mis-sold' policy from which they gained financially,whilst leaving the policy owner vulnerable because of their lack of truthfullness - dispicable is a word that springs to mind re.these companies,
Ivan

[John Flynn]

It may be frustrating. It is certainly "buyer beware." But it's not fraud at all. All of those exclusions have to be covered in the policy documentation and/or applicable insurance regulations. Insurance companies sell a product, which is the policy, and unlike a lot of other kinds of products, it is precisely documented, even if it is not "fun reading." In addition to that, if you don't want to read the document, you can ask questions about it and they have to tell you the truth.

I'm also puzzled by Dale's use of marine insurance to cover instruments. That is not what marine insurance is for. Marine policies are regulated by a different set of rules than most people are used to. I would recommend avoiding marine policies unless you are in the waterborne shipping industry.

Insurance companies are in business to sell insurance poicies. If after providing all that documentation, you still want to buy a policy, however inappropriate it might be for you, they will sell it to you. It's just like the fact that McDonald's will sell you a Big Mac even if they can see you're overweight. Like I said, buyer beware.

[mrmando]

I'm also puzzled by Dale's use of marine insurance to cover instruments. That is not what marine insurance is for. Marine policies are regulated by a different set of rules than most people are used to. I would recommend avoiding marine policies unless you are in the waterborne shipping industry.

Uh ... wow ...

Heritage is an inland marine policy.

[John Flynn]

Uh ... wow ...

Heritage is an inland marine policy.

Inland marine insurance is an outgrowth of marine insurance. It can cover property being transported, over land or water, like musical instruments, but it is still designed to cover goods in transit, and it is mainly to cover the transporation company, not the owner of the goods.

I admit I don't know enough about the fine legal points to say much more, but that's kind of my point. My family was in the marine transportation business for many years and marine insurance kind of drove us crazy (or crazier!). I know enough to know it's something you only mess with if you have to AND you really understand it OR you get a lawyer who does.

[GVD]

Here's an article that explains the history of Inland Marine Insurance a little more in depth.

Everything you ever wanted to know about Inland Marine Insurance but were afraid to ask

[bgmando]

My insurance is under a collectibles rider with Farmer's Insurance. I was told they cover if it's a home break in, not if I'm out playing.

I've been satisfied with it but this discusssion makes me want to revisit my own policy.

[jnikora]

I have been covered by a Heritage policy for many years. I would have to say that their service has been acceptable, though I have had to negotiate for what is fair and fortunately, I have not had to file a claim, either.

Several years ago, I was talking with a few other insureds who were with Heritage and it turned out that we were paying substantially different rates. One of us had a schedule that was in the high six figures and Heritage's explanation was understandable that he would benefit from a "volume" discount, but another party had a schedule that was similar to mine in the mid to high five figures. In short, I was being charged $1.00/$1000/year. My counterpart was charged $0.50 and the person with highest valuation was paying $.045.

I did some research and found Clarion, as was previously mentioned, and a company in St. Paul, MN that insures, among others, all of the St. Paul Chamber Orchestra's instruments. Clarion was high but the company in MN was very competitive. The only difference was a small deductible. I used that company's rates to get my rate lowered. In the end, I got a better and cheaper policy, but I had to work for it. This is not an indictment of Heritage - merely a note to negotiate. Insurance - at least this type of policy - is negotiable. There are regulations concerning rates and groups, etc., but I even got my Homeowner's, Auto and Personal Liability policies lowered. They had to cancel me and write a whole new policy but it saved me over $300/year. Buying insurance is different than buying bread or milk.

One other note: Heritage has written some policies with shipping restrictions. If you deal a lot of instruments or service them, I know of at least one policy that they issued at a low rate but required notification and a shipping surcharge every time an instrument was transported.

Jim

[mrmando]

Jim ... how many years ago was this? Or did you put in an extra zero?

I'm paying roughly $7/K/year on my Heritage policy. $.50/K/year does not really pencil out, given the minimum $250 annual premium. At $.50/K/year, you'd be paying that minimum premium to cover half a million bucks' worth of instruments.

Maybe you meant $.50/100/year? That I could believe.

[fiddledoc]

I've had lots of experience helping customers file insurance claims on instruments over the years. Read your homeowners policies very closley if you go that route. One example of a nightmare with a homeowners claim was a customer that backed over a beautiful 1920's Roth violin with thier car. It was toast.The insurance company excercised thier right to replace the instrument with a "New Equivelant", and gave the person a new Roth violin. Quality wise, it would be like totaling your Loar, and getting a new F5-G. Another one was a girl that fell on her cello causing top and back soundpost cracks. She was a high school student. She played in her church orchestra. The insurance company found out the church gave the orchestra members one set of strings per year for playing in the orchestra and decided she was playing for compensation, and denied the claim.

ON the other hand, when I've dealt with claims with either Clarion or Heratige, I've seen no problems. They understand what you are talking about when you discuss damage with them. They will pay devaluation on top of repair cost. They respect the repairmans opinion and arent always looking for a way to deny the claim. Just my two cents worth.

Also, I have a friend who joined some music teachers association for $50 a year and got a 50% discount with heratige. Don't know if that's still possible, but worth checking into.

[Dale Ludewig]

Jim,
interesting and important points. I've not yet dealt with them on the details you mention, but I have a feeling I know what you're what referring to. Call me or I'll call you. This is important stuff. For all of us.
Dale

[jnikora]

My bad! A stuttering finger buys an extra "0".

The rate was $,50/$100/yr. Typically, I don't think it is worth carrying a Heritage policy if you are not over $25,000 in scheduled value. With a $250 minimum, that is a 1% rate above which, in my opinion, warrants self insurance. I also believe that you should negotiate to not have any increase over the minimum until your schedule exceeds $50,000 unless you have some exceptional risk conditions, like frequent shipping, or a track record of multiple claims.

I believe the negotiation I went through was two years ago.

[Rick Crenshaw]

... Typically, I don't think it is worth carrying a Heritage policy if you are not over $25,000 in scheduled value. With a $250 minimum, that is a 1% rate above which, in my opinion, warrants self insurance.

While I think negotiating better prices is always warranted, I disagree with your statement that it is not worth carrying a Heritage policy if you don't have $25K in scheduled value. Though I could afford to replace my best instruments, I would be hard pressed to convince my wife that replacing $6500 mandolin is the only option that I have. I paid $5250 for it a while back. To replace it would mean I would have $11,750 in the same mandolin after the loss and replacement.

I added up all my instruments, cases (nice ones), recording equipment, amps, electronic metronomes, tuners, PA system. It came to about 22K new. I started buying Heritage when I only had $14K worth of equipment. I felt it was a good deal then.

$250 for peace of mind when going to jams, festivals, lending instruments, playing out with multiple instruments, leaving PA systems for a few hours after set up... yep, $250 for peace of mind is worth it to me.

If I had only $2K to $4K worth of stuff, yeah, I'd probably sack the $250 per year away for replacing it myself. After all, it is unlikely that someone would lose, steal, or ruin ALL of their instruments and equipment in one shot.

But since I play for pay sometimes, I took what I felt was the surest road... and yeah, I might take that road if I only had two $5000 instruments.

[BrazAd]

I'm on my 2nd year of using Heritage to cover my instruments. I had a claim in my 1st year. Knocked a guitar off of a stand that hit a concrete floor and did some minor damage - about $350 worth. Heritage paid it immediately upon receipt of a bill from my luthier with no questions asked.

Upon renewal, though, my premium went from $250 to $300.

I paid it because of their great service. My total coverage is for close to $18k right now. As Rick stated I've already paid for this stuff one time.

I've got $3,600 in one custom guitar by Leo Posch. I've got it insured for $6,500 now, 3+ years after I received it. That's just one example!

Gary

[Ivan Kelsall]

John - If i sold you an automobile that i told you would do a 100 miles per gallon of gas,& it only did 20 mpg - what part of that isn't fraud ?. Fraud is defined as 'deception' amongst other definitions,& to sell somebody an insurance policy knowing full well that it 'doesn't cover the circumstances for which it was sold' is fraud. The insurance company has DECEIVED their customer !. Around 5 years back in the UK,a whole bunch of 'Financial' companies were taken to court for selling policies which didn't cover the customer's requirements. Ok,it wasn't 'Insurance' , but the same thing applied - they were deemed to have mis-sold the policies,a polite way of saying that they commited FRAUD !.
If, as Dale Ludewig stated,he bought an insurance policy,having stated that he needed a policy
that would cover him for 'playing out',& the Insurance co.sold him a policy which they knew didn't cover him - & Dale firmly believed it DID,then they deceived him & that's fraud.
I do however totally agree with the 'buyer beware' bit & that you should read through the policy thoroughly (or emply a lawyer to do so,as most of the policies i've seen personally are written in 'leagalise' - not easily understood by us mere mortals). But,if in reading through the policy,you found that it didn't cover you for some circumstance that you'd specifically asked for,what would your feelings be ?.
I think that some times,we have a blank spot when attributing 'deception',should we call it, to companies we deal with on a day-to-day basis - but it happens, & you can bet these companies have their corporate a**es well covered legally because of it,
Ivan

[John Flynn]

Ivan:

There is a principle in US law that there are few exceptions to. It is: A verbal agreement cannot supersede or modify a written agreement. So if there is a policy document, that is what you are buying. If you go to court and claim fraud, the insurance company is going to go right to the policy document. Could you prove someone from the company told you differently? No. Even if you could, like if you recorded the conversation, all you could get is for that employee or agent telling you the wrong thing to be disciplined. The company can fall back on the written policy. That's what you bought.

Your car example just makes my point. Cars for sale (at least in the US) have window stickers that tell you the particulars about the car, including the mpg estimates. If the salesman tells you a car gets 100 mpg and you buy and find out it only gets 20 mpg, and then you claim fraud, the are going to say, "Lets look at the window sticker. See, right here it says in letters a half inch tall: 20 mpg. Our salesman may have mis-spoke, or maybe you heard him wrong. We will counsel him on being more precise next time." No prosecutor would take that as a fraud case. You would not win a lawsuit for fraud in that situation. Car salesmen lie to customers all the time!!! It's legendary. It is the same with insurance, and lots of other things.