dwacker Posted November 8, 2011 Author Report Share Posted November 8, 2011 i asumed that you had all those tools to start with but if they are insured then the insurance would kick over alot of money at one time. alot of home owners insurance covers the loss of garage tools. i would never burn any of my tools their my babies i was just making a joke. there is just a huge difference from buying all the tools on sale over the years and then droping a big pile of cash in a weekend. if you bought it all yourself then you probably spend 50k-80k on the new garage as well as the tools that you had in there. if you had insurance then ya i can see spending 12k. An insurance company depreciates your building to the point that there is no way you can rebuild with what they pay out. Even the concrete floor is on a depreciation schedule and you can bet after 50 + years its not worth much. No the insurance company doesn't just cut you a check for the loss inventory. First they depreciate everything and if its more than a year or two old you dont get anything. Anything you dont replace that was depreciated to zero is just that its zero. If you dont have the cash to lay out and buy all new stuff and the time to be reimbursed then your just plain screwed. If you dont have replacement cost insurance your also just plain screwed because you dont get reimbursed for the depreciation. Like I said Ive worked for everything I have and worked for the nest egg that afforded the upfront cash lay out to get this shop put back together. Don Quote Link to comment Share on other sites More sharing options...
duckkisser Posted November 8, 2011 Report Share Posted November 8, 2011 thats a shame man still saving up for my own home so havent yet had to deal with insurance companies (yet) always rented so someone else delt with insurance. I Feel bad about the cost of all your tools. Quote Link to comment Share on other sites More sharing options...
nateswoodworks Posted November 8, 2011 Report Share Posted November 8, 2011 Don, I had checked my policy after you first told us about your disaster and made sure I had replacement coverage, what coverage did you have that made it be that they could depreciate yours? We had gotten struck by lightening about 12 or 13yrs ago and lost a couple tv's and such, they were not depreciated and we just submitted receipts and they cut a check . You may have mentioned it before and if so I apologize for asking but there are 6 pages on this post to read through and only so many hrs in a day!! I just want to make dang sure I learn from your story!! I talked to my agent and they said I would be just fine if something happened but you can't always trust them either. Glad you got to spend some time with your grandson and make sawdust and memories. Nate Quote Link to comment Share on other sites More sharing options...
Eric. Posted November 9, 2011 Report Share Posted November 9, 2011 Wow, I didn't know about the depreciation factor...I'm calling my insurance company tomorrow. Thanks for the head's up on that, Don. No way I'd be able to replace my shop out of pocket if it burned. It would be years before I was up and running again. Quote Link to comment Share on other sites More sharing options...
dwacker Posted November 9, 2011 Author Report Share Posted November 9, 2011 Don, I had checked my policy after you first told us about your disaster and made sure I had replacement coverage, what coverage did you have that made it be that they could depreciate yours? We had gotten struck by lightening about 12 or 13yrs ago and lost a couple tv's and such, they were not depreciated and we just submitted receipts and they cut a check . You may have mentioned it before and if so I apologize for asking but there are 6 pages on this post to read through and only so many hrs in a day!! I just want to make dang sure I learn from your story!! I talked to my agent and they said I would be just fine if something happened but you can't always trust them either. Glad you got to spend some time with your grandson and make sawdust and memories. Nate Nate The way most policies work is there is a dollar limit. My policy for example will pay full replacement cost no questions asked right up front on a claim less than $3500. Go beyond the $3500 they depreciate everything you own and cut you a check for the depreciated value. Then you go out and replace the lost items with new and submit the receipts then you get reimbursed for the difference. The depreciation is not industry or tax based standards its biased towards the insurance company. For example a 2 1/2 year old Festool Domino worked out to being worth $45 after depreciation so I buck up the difference submit the receipt and they have six months to get me my money back. As far as I know most insurance companies work the same way. Don Quote Link to comment Share on other sites More sharing options...
tim0625 Posted November 20, 2011 Report Share Posted November 20, 2011 You'd know the insurance agent has to chime in....first of all, an insurance policy is like a motor, wire it one way, it's a 5HP Baldor. wire it another, it's a ceiling fan. A company builds their policy how they want it. Our company sells homeowners policies that have "replacement cost" coverage on the building only; on the building AND the personal property, OR a policy that is an ACV (Actual Cash Value) policy where everything is depreciated (structure and personal property) before a claim is paid. Three different policies. It depends on what you wanted to pay and what you purchased. The policies with "replacement cost coverage" allow the homeowner enough money to purchase a 'new one' of similar kind and quality after the deductible be it a roof, stove, or shop stuff. I heard of a well known company the other day where the customer said they were told that if their house burned, they would have to build the same floor plan back with the exact same features in order to get paid. That's crazy. With Farm Bureau Insurance here in SC, we do not do a lot of smoke and mirrors. Buy a policy with replacement cost on dwelling and contents/coverage C and have a total loss, we deduct the amount of the deductible and we cut you a check in the amount of Coverage A on the policy (which is the amount the home is insured for). Also in there is Loss of Use money and other things. Rebuild or take the money and run. The amount paid is not tied to the 'market value'. Homes are insured for approximate cost to rebuild which will not fluctuate quite as much as the amount to rebuild. The intended goal of a replacement cost policy is to indemnify the customer or bring him back to where he was before the loss - except with new stuff!. Toward that end, when figuring for personal property loss, we use current market prices and allow that amount for a new [whatever] planer or TS. We do not make the customer replace it with another 20 year old planer. You paid the extra $ to have a replacement cost policy and for that fee, you get paid for a new one of similar kind and quality. No Powermatic replacing the Craftsman. Now, you can take the money replacing the Craftsman tool and add some to it and buy Powermatic if you like. That may be what you did Don unless you had all Powermatic before the fire. The good thing is you may have had the old RAS in the corner that you didn't use or it had a bad motor. You get paid for it too! Document and take pictures of tools and other things. The assortment of screws, biscuits, dowels, and even the assortment of lumber. Though all of that will fluctuate through the years, it will give you and the claims adjuster a good idea of what was there and it will help you not forget what was there if a loss occurs. Claims adjusters generally work off of "what's reasonable". "I had 6 routers"....that's reasonable (? )...but if the figure is 21 routers..... .....ok you should have been in a class, "HELLO MY NAME IS TIM AND I HAVE A ROUTER PROBLEM......everyone in the room with aprons on says, "HELLO TIM"...a photo helps your case, but not the fettish. Whoever said it, you're right; insurance companies will make a profit in whatever they do - it's not a charity organization, like yours, it's a business. They make profits for a while and then pay out...like in May here in SC, a hail storm came through and $100 MILLION LATER....properties were restored! As an agent, I try to educate all of my clients what they're buying and pose scenarios on what and how things are paid if this happens or that happens. When they leave me, I know at least they've been told. Sit with your agent and ask these questions. If he is bobbing and weaving on the answer, it's because he may not know...if he doesn't man up (or woman up - Cynthia ) and say 'I don't know but I'll find the answer', ask for the boss but get the right answer. Don, you've also probably forgotten a lot of things you had....$50 here and there but it all adds up. Remember too....claims can be amended and new checks written if you think of things later. At least, the worst is behind you and the work is in front of you....now with shiny new things....can we come help? Quote Link to comment Share on other sites More sharing options...
duckkisser Posted November 20, 2011 Report Share Posted November 20, 2011 good to know tim i just took some photos of my tools for record in case something happens. Quote Link to comment Share on other sites More sharing options...
tim0625 Posted November 21, 2011 Report Share Posted November 21, 2011 good to know tim i just took some photos of my tools for record in case something happens. Also keep a file with serial numbers to help with instances of theft. We're seeing a LOT of theft claims here. When the police roll up and you hand them a sheet that has a list all of your tools on it with serial numbers, they begin cross reference it with arrests that have i.e. a band saw on the premises and they begin to check pawn shops. If your stuff is discovered, the pawn shop gives it back to you and they have a drivers license record of who sold it to them. The Po Po now has a lead! Quote Link to comment Share on other sites More sharing options...
dwacker Posted November 21, 2011 Author Report Share Posted November 21, 2011 ==> First they depreciate everything and if it’s more than a year or two old you don’t get anything. This depends on the specific insurance policy. Even within a class of policies (say ‘replacement’), there are many levels of coverage. Pretty much every major insurance company uses Xact software program to depreciate property. The software is written to benefit the insurance company. We have access to this service through my wife's legal practice. Personally I think insurance companies should give their clients access so they know how much money they need as backup funds in case of a disaster. Don Quote Link to comment Share on other sites More sharing options...
rmac Posted November 21, 2011 Report Share Posted November 21, 2011 Your dad probably has a friend who is an industrial electrician "at the mill" and could do it for you for a little $ or maybe nothing. Tim, didn't you say that you were an insurance agent? Please tell us what happens when the place burns down and the insurance company finds out that the wiring was done by a "guy from the mill". No, I don't remember his name, but he was a friend of my dad's. Is that gonna be a problem? -- Russ Quote Link to comment Share on other sites More sharing options...
dwacker Posted November 21, 2011 Author Report Share Posted November 21, 2011 Tim, didn't you say that you were an insurance agent? Please tell us what happens when the place burns down and the insurance company finds out that the wiring was done by a "guy from the mill". No, I don't remember his name, but he was a friend of my dad's. Is that gonna be a problem? -- Russ You have to read your policy. Ask yourself all the what if and see if you're covered. My policy clearly states that material defects and workmanship does not exclude coverage for a covered peril. Even if I did a bad job putting in a light or wiring I would still be covered. But while we are still on the discussion. I'll also add. Make sure you have enough building coverage after depreciation. This is a hard one because your agent can't do the calculations but usually your lawyer can. For example your house burns and you have a total loss. Your insurance company depreciates everything (roof, drywall, carpet everything) and you fall short 20K on the rebuild. If you don't have the cash or credit means you may be in deep dung. In WA the check gets cut to your mortgage company and they pay out as the work progresses. If the check is not enough to cover the estimate that you provide to them then you are in default and they can just keep the money and foreclose. In my case the insurance company wrote a check to my mortgage company that went into escrow, since the check fell short I had to deposit funds into that escrow out of my own pocket to make up the difference. The Mortgage company will look at the estimates and the insurance adjusters report. They will decide whether or not they are made whole with their collateral. Meaning if you had a four bedroom house you can't rebuild a 3 bedroom because the insurance company depreciated everything so bad that you did not have the resources to rebuild a four bedroom. In this case they will take the money and use it towards your mortgage and foreclose on the balance. Don Quote Link to comment Share on other sites More sharing options...
duckkisser Posted November 22, 2011 Report Share Posted November 22, 2011 Also keep a file with serial numbers to help with instances of theft. We're seeing a LOT of theft claims here. When the police roll up and you hand them a sheet that has a list all of your tools on it with serial numbers, they begin cross reference it with arrests that have i.e. a band saw on the premises and they begin to check pawn shops. If your stuff is discovered, the pawn shop gives it back to you and they have a drivers license record of who sold it to them. The Po Po now has a lead! good i will do that in the morning thinking of puting a serial number on all my stuff i will pick up a cheap set of number punches and keep a record of everything i own. ill even punch numbers on my punches Quote Link to comment Share on other sites More sharing options...
dwacker Posted November 22, 2011 Author Report Share Posted November 22, 2011 Within a given company, there can be multiple levels of policy within a set policy class. In other words, not all ‘replacement’ policies are the same – even from the same company. After reading this I am feeling a little ripped off by my insurance company (home Travelers and business Farmers). I called both companies. Neither offer a tiered replacement policy. You either have replacement or you don't. Farmers is 3K before depreciation and Travelers is $3500. For piece of mind I called Allstate, they don't offer tiered replacement either; depreciation starts at $3k like farmers. What company will just pay out the actual replacement cost without depreciation the rep from Allstate said he never heard of such a policy? Don Quote Link to comment Share on other sites More sharing options...
duckkisser Posted November 23, 2011 Report Share Posted November 23, 2011 feeling a little ripped off by my insurance company Yea, had that feeling with my loss under my old policy. Had a small loss (about 20K) on my new policy im dieing here you guys talking about 10s of thousands of dollers and im worried about a couple hundred to keep my tools locked up at school. dont know if i want your shop problems or not. i have to say im realy glad this thread went this way i called some insurance companies to see what i could do about insuring my new lathe got some inturesting results. and i have the number of the machne as well as photos and description. Quote Link to comment Share on other sites More sharing options...
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