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Author Topic: Equipment Insurance  (Read 12759 times)
Mike Sellers
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« on: November 02, 2011, 08:55:34 PM »
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I just bought a Contax 645 outfit with 3 lenses for about $2,900. When I tried to insure it my agent said the company would only insure for actual cost[$2,900] and not replacement cost[$4,500]. Then they wanted to know the break down on what I paid for each piece. How am I supposed to get them to understand there is a big difference between what I paid and the replacement cost? Where else could I be looking for insurance on my equipment that will allow me to insure for the replacement value?
Mike
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Slobodan Blagojevic
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« Reply #1 on: November 02, 2011, 10:23:29 PM »
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...How am I supposed to get them to understand there is a big difference between what I paid and the replacement cost?..

Oh, believe me, they do understand the difference. But let me get this straight: you bought something for $2900, but want it insured for about 50-60% more!? If you bought it for that much, isn't that the "replacement value"? If it is stolen, you stand to lose what you paid for, not more. If you need to replace it, you will again buy it second-hand for approximately $2900. Insurance works on the principle to make you whole after a loss, not better off. Or perhaps I missed something in you story?
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Slobodan

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Justan
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« Reply #2 on: November 03, 2011, 09:50:37 AM »
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Some insurance companies will insure for “replacement cost” no matter what the stated value is, up to a point. Others will insure for fair market value (fmv).

As example, if someone gifted you the equipment, your cost would be $0 but the equipment would still have a fmv. The fmv is what the insurance company typically will provide as coverage. Determining fmv typically includes some kind of appraisal by an independent party. If you have an appraisal in hand, that will absolutely help establish the value of the property.

Another example is if you paid $100 for something with a fmv of $50. Probably no insurance company will return the $100 if the property is covered. It isn’t their fault if the buyer paid too much.

If you have home owner’s or renter’s insurance that would probably cover it, unless, of course, the equipment is used for business, or the insurance co requires a special rider policy when something is valued beyond $X. If it is business property there is typically separate (and often obscenely expensive) insurance for business property.

In all cases it is very important to read the small print in a policy.

Last but definitely not least, it *always* pays to shop around for insurance.
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RFPhotography
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« Reply #3 on: November 03, 2011, 02:24:43 PM »
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Yep.  I just talked to an insurance company this morning that insured on replacement value, not used or fair market value. 
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theguywitha645d
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« Reply #4 on: November 05, 2011, 09:15:54 AM »
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You do know the the Contax 645 is out of production and the company is out of business--you paid fair market value when you bought your equipment. How can you insure it for more than your paid for it? It has no more value than that.
« Last Edit: November 05, 2011, 09:30:05 AM by theguywitha645d » Logged
RFPhotography
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« Reply #5 on: November 05, 2011, 10:19:07 AM »
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What does it matter?  If the camera gets stolen or broken it still needs to be replaced.  Whether it's out of production or not is irrelevant.  If the insurance company insures on replacement value, then they pay to replace with something comparable at the time of the replacement.  The insurance company I spoke with the other day didn't ask me what I paid for my gear or whether I bought it new or used.  They asked what the replacement cost would be.  The simple fact is there are companies that will insure for replacement value.
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Slobodan Blagojevic
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« Reply #6 on: November 05, 2011, 12:49:38 PM »
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... something comparable at the time of the replacement... there are companies that will insure for replacement value.

It would be useful to know what exactly the OP considers the replacement cost, equalling $4,500, to be: historical retail price of new items when they were in production (or still available new in stores)?

The same question for Bob: what did you consider your replacement cost to be? And what you consider, in your case, "something comparable at the time of the replacement"?

Of course insurance companies would insure for "replacement value" (for extra premium). The real questions is if our (e.g., yours and mine) definition of replacement value is the same as theirs. My guess is it is not. They tend to skew definitions in their favor. For instance, if you bought a 46" TV for $1,700 some time ago, and it is stolen or destroyed, you will not get a check for $1,700. Instead, the replacement value would be based on the current price for 46" TVs, which would be more like $700 or $1,000.

So, the only thing comparable with a Contax 645 kit would be another Contax 645 kit on the second-hand market. Which would be around $2,900 (under assumption that the OP paid an average price).
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Slobodan

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Mike Sellers
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« Reply #7 on: November 05, 2011, 02:33:54 PM »
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check out the prices on ebay then get back to me
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Mike Sellers
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« Reply #8 on: November 05, 2011, 02:36:42 PM »
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check out the prices on ebay-
Body+Meter Prism+ 80mm lens= around $2,500
45mm lens=around $1,000
140mm lens= around $1,000
add it up
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Slobodan Blagojevic
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« Reply #9 on: November 05, 2011, 02:55:16 PM »
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check out the prices on ebay then get back to me

Why this tone?

I thought we are having a reasonable discussion here trying to discuss insurance and ultimately help you. I am not going to go to eBay and check things in order to do so. You asked a question, you should clarify it.

Back to the issue. It appears that you are saying that the average price for your kit on the second-hand market is around $4,500 and that you were simply lucky to find it for less. Fair enough.

You should also clarify whether you are trying to insure it through your home policy, as a part of your personal belongings, or as a rider to the home policy, or as a stand-alone professional policy. Is this the only item you are insuring or is it a part of a bigger package?
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Slobodan

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RFPhotography
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« Reply #10 on: November 05, 2011, 03:06:20 PM »
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It would be useful to know what exactly the OP considers the replacement cost, equalling $4,500, to be: historical retail price of new items when they were in production (or still available new in stores)?

The same question for Bob: what did you consider your replacement cost to be? And what you consider, in your case, "something comparable at the time of the replacement"?

Of course insurance companies would insure for "replacement value" (for extra premium). The real questions is if our (e.g., yours and mine) definition of replacement value is the same as theirs. My guess is it is not. They tend to skew definitions in their favor. For instance, if you bought a 46" TV for $1,700 some time ago, and it is stolen or destroyed, you will not get a check for $1,700. Instead, the replacement value would be based on the current price for 46" TVs, which would be more like $700 or $1,000.

So, the only thing comparable with a Contax 645 kit would be another Contax 645 kit on the second-hand market. Which would be around $2,900 (under assumption that the OP paid an average price).

Replacement cost is what it costs to replace with comparable gear if gear that was insured is no longer available new.  For example, if my D700 gets stolen and it's no longer being manufactured but the D800 is the then comparable camera, I'd get a D800 as a replacement for the D700.  So if I paid $2500 for my D700 and a new D800 costs $2700, that's what I'd get.  The deductible has to be taken into consideration as well, of course.  In your TV example, if the cost of a comparable 46" TV were $700 then that's what you'd get.  If the comparable TV cost $2500, that's what you'd get under replacement cost insurance.  That's what replacement cost insurance is.  It pays out based on the cost to replace with the same product new or a comparable product if the original is no longer available.

What's the comparable kit to the Contax?  Another Contax?  Maybe.  Or maybe since Contax isn't around anymore it's something like a 503CW. 
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Rocco Penny
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« Reply #11 on: November 05, 2011, 06:39:03 PM »
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I'm not sure if this is just blather,
but,

let's say I do my best work with a certain combination of tools.
The tools are no longer made or commonly available.
The replacement cost of those tools, and, thusly the amount of money required to reimburse and satisfy my need for the certain combination of tools after loss will be the amount I'm insuring it for.
Now,
I suppose there may be some tax restraints and that type of thing requiring attention if you amass some dollar amount while engaging in the use or trade of such devices, therefore you may want to be frank about your great horse trading skills with your agent.
I imagine the conversation going something like;
"Wow, you got a terrific bargain on your equipment, what will it cost to replace?"
"Oh, I think I got it for about 2K under market."
"OK lets call it cost plus 2K, BUT!, let's have a periodic review to make sure your coverage is adequate as replacement cost seems spotty."
 
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RFPhotography
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« Reply #12 on: November 06, 2011, 06:22:14 AM »
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Well, as to whether it's just blather or not.... I have absolutely no idea what you're saying or what point you're trying to make. 
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DeeJay
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« Reply #13 on: November 14, 2011, 07:32:08 AM »
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One thing I would check, and this is just to save you the hassle that I went through once, insurance companies will often only insure something that is no more than 5 years old. It's usually buried in the legal jargon and fine print somewhere in the policy. The LOVE to remind you of this when it comes time to claim the item.

Given the age of the Contax now you may be in for a shock at a later date if you don't check it out now.



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Rob C
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« Reply #14 on: November 17, 2011, 03:30:37 PM »
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I thought I had all my stuff properly insured throught the domestic home insurance policy. A week or so ago, when I took along the additional details for a used lens I'd just bought, the agent stunned me by saying that we had better have a meeting with the company because he didn't want to have a disagreement with me in case I ever made a claim - seems that though they have raised my policy price each year, and though I have religiously given them details of all new stuff, that might not be enough...and I stress: this is all on an amateur photography basis. Worse, there is no cover outwith the home. Same with watches and jewellery - go on the street, where the risks are greatest, and you have no cover. Seems this is normal in Spain! We've had a recent problem with subsidence... the agent just had mild hysterics and almost literally walked out on me when he came to make his inspection. Everything is, ultimately, and act of God, and not covered.

Now that's a cool business model; should have known about it when I was young, and eager to make my way in this world!

Rob C
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Slobodan Blagojevic
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« Reply #15 on: November 17, 2011, 04:12:54 PM »
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In US, a homeowner policy covers your stuff world-wide.
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Slobodan

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Kerry L
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« Reply #16 on: November 28, 2011, 11:20:27 AM »
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I just bought a Contax 645 outfit with 3 lenses for about $2,900. When I tried to insure it my agent said the company would only insure for actual cost[$2,900] and not replacement cost[$4,500]. Then they wanted to know the break down on what I paid for each piece. How am I supposed to get them to understand there is a big difference between what I paid and the replacement cost? Where else could I be looking for insurance on my equipment that will allow me to insure for the replacement value?
Mike

I have a separate policy that covers my equipment plus 3rd party liability. I insure for replacement costs on equipment including any rental equipment. After reading the various comments here, I checked with my agent.

Their take on it is covered in a legal term that's in my policy, they will "make whole" again. It means that I won't make money or end up short due to a loss. I will be covered to replacement (existing or comparable version/model) costs for equipment that I purchased new. I will be covered up to my purchase cost for used equipment.

Part of his reasoning behind this is that the used market is unpredictable. Once something is lost, how does one reliably come up with a fair price and condition. On e-bay prices and condition vary considerably. He asked how I would feel if I was offered half of what I had paid because a similar used item was listed on-line.

His suggestion to me ( and anyone else) read the policy and make sure you are clear on what you are insured for. As for used equipment coverage, he said “it’s insurance not gambling or speculation.”
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