Insurance co's and the economy.

I got my premium invoice for 2009 about 2 weeks ago.
Times are rough things are tough, sales are down.
And....they raised my premium $200 !

I called my agent and diplomatically raised hell, gave them the old pis/moan session.....and I guess it worked this time.
I told them I won't be able to afford insurance at theses rates in this economy. The "found" another carrier, that "rates the building differently" (??) and looks like they can save me $1100/ year ....AND increase the liability from 1mill/2mill to 1mill/3mill (I gotta have them remind me just what that means, I knew at one time).
I have no idea why we didn't change carriers about 3 years ago....maybe my agent just needed the money....

How many of you with older machines have your contents covered? Do you expect the adjuster will be able to find you another "1954 Leblond dual drive in comparable condition"? Or do you suppose they will say "here's $500, take it or leave it"....?

Might be a good time to play the 'economy' card and revisit your insurance coverage. Call your agent and see if they can possibly save some money. Be sure to mention you have other agency's quoting the policy also.

I have a lot of smaller items that are not listed on my policy. This means I am "self insured".

But be careful if you just reduce the coverage value of your policy. Most insurance companies require you to have an item insured for at least 80% of full value. If you do not have at least 80% coverage, they will consider you a co-insurer, and reduce the amount owed in the event of a loss by the percentage they feel you are self insured. For example, if you have $7000 coverage on a $10,000 item, they can consider you a 30% co-insurer. In the event of a loss, they will pay 70% of your $7,000 coverage, or $4,900.

Insurance companies make most of their money from their investments and loan activity. Those activities have not been a profit center for the last year. Be prepared for more increases.

Having always been comfortable buying used machinery, I think one would tend to 'overpay premiums' if you want to insure for new replacement value. Like as not, the bastards will not give you new price (because your stuff has depreciated) when push comes to shove anyways, so you might as well insure for what you think the machines are actually worth when you go out and buy comparable used machines. For example, a mill I bought 10 years ago, retrofitted for $25k is worth zippo today, or I can go get another one for $1k if I really want it. So $1k is the value.

Make sure to insure the building for its replacement value, as there is no way to get a used building too handily I might be wrong, and have donned my flame suit

Most insurance companies require you to have an item insured for at least 80% of full value. If you do not have at least 80% coverage, they will consider you a co-insurer, and reduce the amount owed in the event of a loss by the percentage they feel you are self insured. For example, if you have $7000 coverage on a $10,000 item, they can consider you a 30% co-insurer. In the event of a loss, they will pay 70% of your $7,000 coverage, or $4,900.

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This would be the "can't win" scenario that makes me think trying to insure contents is a waste of money....unless you have newish cnc's in the mix of course...
They are going to try to get out of paying no matter what. As long as you pay those premiums an don't make trouble they will do business with you. File a claim and they try to forget who you 'were'. I have never filed any claims...but have heard stories.

Not a business owner. I do, though, have a shop FULL of machinery and tons of other items I have collected over the centuries.

I got to thinking awhile back (that was something new) and took my digital camera, put it in movie mode, and walked around the shop pointing it at anything and everything and described what I was looking at.

That way, in the event of a disaster I have some proof of what I had. To me, a lot better than still pictures of items. Moving pictures are sure to reveal something you forgot and can cover a lot more items than still.

Thinking some more, I need to do that here at my house, too.

In the process of this, I got a call from Sentry insurance, from an agent that sounded hungry to get my business.

Turns out I need a policy in place by 2/27 an supposedly Sentry 'needs 32 days to quote'.......??? so they can't get me pricing in time for the 2/27 deadline.
Is that screwy or what?

This guy said he tried to pull some strings, but the underwriting dept. won't budge in the 32 day time frame. Meanwhile I had quotes from 2 other companies, one faxed over in 2 days the other in 4 days.

Red flag as far as Sentry insurance goes IMHO.....

Ironically, this guy called at the ideal time to get a shot at my insurance coverage, but his company shot him in the foot I guess.....
Not surprising really, the insurance industry seems to be one of the flakiest there is...

dk

EDIT:

The sentry guys email explanation:
"we are direct writers so it takes longer to process things. When you call a local broker, he or she can pull from other places to get a quote, I don't have that luxury."

My response:
"It seems like being 'direct writers' would place you closer to the action, and allow for an even quicker response and faster processing since there is no middle man. Makes no sense to me."

gbent said:

I have a lot of smaller items that are not listed on my policy. This means I am "self insured".

But be careful if you just reduce the coverage value of your policy. Most insurance companies require you to have an item insured for at least 80% of full value. If you do not have at least 80% coverage, they will consider you a co-insurer, and reduce the amount owed in the event of a loss by the percentage they feel you are self insured. For example, if you have $7000 coverage on a $10,000 item, they can consider you a 30% co-insurer. In the event of a loss, they will pay 70% of your $7,000 coverage, or $4,900.

Insurance companies make most of their money from their investments and loan activity. Those activities have not been a profit center for the last year. Be prepared for more increases.

Click to expand...

One of my highway trucks was in a wreck a few years back. The truck was insured for $45,000. When it came time to "negotiate" on the pay out (truck was wrote off), they started the wheeling-and-dealing.

Offered me $35,000.

I said "truck is insured for $45,000 - where is my money?"

They said "It doesn't matter how much you insure it for, we only pay what we think it is worth."

I said "Then lower my insurance to $1,000 per vehicle so I can save some dough. When there is a wreck you can send me the $35,000 and I'll be happy."

For some reason that didn't go over too good.

Got them in the end though...got 'em up to $43,500 for the truck, 80% for personal contents, and 100% of my downtime till I replaced the truck.

The downtime is a story in itself...

They actually hired an accountant to go through 2 years of records for that truck. Came up with total income - total expenses = profit. Then (ready to laugh?) divided that by the total days in 2 years. This gave profit per day. I said "No, no, no. I didn't work EVERY day for 2 years. See I have these things that are required by law called log books. Here's the actual number of days I worked." Guess what...taking their calculated profit divided by my actual days gave a HIGHER daily downtime claim than I was originally claiming.

They settled pretty fast on everything else before I produced more paperwork.

Andrew

They said "It doesn't matter how much you insure it for, we only pay what we think it is worth."

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And that is the exact point where they change into CROOKS.

Andrew hit the nail on the head with his statement: "...before I produced more paperwork..."

Date and sign everything and never throw out documents that have to do with time and/or money.

You never know when it will come in handy, often for the most obscure reasons!

Arminius

I think that apart from being a law unto themselves, the insurance co's have lost a lot of $$$$ in the general financial screw up, prob as much as the banks??? so are trying to get it back from any of their customers that are still breathing.

Insurance

Just so you know – as long as you have replacement cost coverage (or functional coverage) the ins co will give you the $$ to purchase “like kind” machinery to replace what has been damaged. But only up to the limit you and the agent agreed upon.



This guys’ agent apparently didn’t tell him that for the extra $200 he’s paying out you will get the ‘value’ of your machinery when a loss occurs. I’ll bet that’s why the other carrier is cheaper.