Music insurance

[Kev]

I Insured my gear under a Musicguard insurance Policy up until earlier this year, when i cancelled it following a discussion/argument with a few of there advisors. Basically, it was over proof of ownership for my then two bass guitars. Because i did not buy them new and could not show specific bank transactions showing when i bought them/what i paid (emails discussing purchase weren't acceptable), they advised they would not cover me unless i provided valuations in the event of a claim, which i was not prepared to pay for [size=4](no idea how having a valuation is more proof of ownership than a picture of me holding the bass with a copy of the Insurance Schedule). Working in insurance for 4 years, I thought it ridiculous given the nature of the market and refused to renew.[/size]

[size=4]However, following gear switch-arounds, i know have just one rather expensive (incoming) second hand bass and a variety of effects units i have owned from new. Now, i have proof of ownership (under Musicguards rules anyway) for the bass in that i paid with a bank transfer, and have receipts for the pedals (Amp is still an issue, though) so i am wondering whether to insure again or not. [/size]

Has anyone here had any problems with insurers in the event of a claim? Who do you use? I don't gig so i am more worried about AD and Theft. Majority of general Household policies exclude AD to instruments, hence me wanting a seperate Policy. No need to discuss Entertainment and Leisure, i wont be going anywhere near them

[flyfisher]

A good warning for everyone to read their policies very carefully.

I'm currently having a little insurance issue of my own. I wanted an annual family travel insurance policy and spoke to a broker who found a seemingly good one that would also provide cover for various sports such as diving (to 30m), sailing and kayaking. However, it did specifically exclude 'competitions', which doesn't affect me and Mrs FF but it did affect FF junior as he represents GB in kayaking competitions. I declared this as a 'material fact' and explained that insurance while taking part in competitions is already provided by the GB team via the British Canoe Union.

However, I was then informed that ANY competition element would void his ENTIRE trip because they would not accept that the purpose of the trip was for holiday purposes - even though the policy was described as 'travel insurance' and not 'holiday insurance'. So, it turned out that his recent three week trip through across Europe, stopping off at various places, was not covered at all because one weekend was for a kayaking competition, which made the entire trip a 'competition' as far as the insurance company is concerned.

OK, this is not a music gear example, but it is an example of how policyholders and insurance companies can interpret very common circumstances in very different ways.

Caveat emptor!

[Kev]

Yes, always worth checking Policies very carefully. In fact, new changes by the FCA have abolished utmost good faith and the requirement to disclose material facts, so the position of the Insured has actually improved, particularly in cases like yours. Had you not disclosed the competition, and had they not specifically asked if at any point during the holiday there would be any sort of competition, the ombudsman would almost certainly rule in your favour.

[mentalextra]

Insurance companies can litererally write their own rules. There is hardly an area of life that cannot be insured, life, car, pet, phone, house etc the list goes on and on. But the recurring theme is they are happy to take your money, but unhappy to pay out when a claim is made; looking for any opportunity in the small print to "weazle out". They expect us to be able to read and understand turgid legal documents describing terms and conditions that are strangely lacking from their snappy "bullet point" advertising camapaigns!

[Kev]

To be fair, as i say i work in insurance and you wouldn't believe the kind of things you deal with. You would certainly realise why certain conditions are put into Policies and why it may seem hard work to claim at times! I did, however, just think Musicguard were out of touch with the market with the proof of ownership thing and i told them so. I just wonder if they are okay in the event of a claim before i give them or anyone else any more money.

[flyfisher]

[quote name='Kev' timestamp='1370793029' post='2105567']
Yes, always worth checking Policies very carefully. In fact, new changes by the FCA have abolished utmost good faith and the requirement to disclose material facts, so the position of the Insured has actually improved, particularly in cases like yours. Had you not disclosed the competition, and had they not specifically asked if at any point during the holiday there would be any sort of competition, the ombudsman would almost certainly rule in your favour.
[/quote]

That's good to hear, but the policy DID specifically exclude competitions. The issue for me was that I would have interpreted that as meaning that any claim arising directly out of the competition itself would not have been covered. But the insurer's interpretation was that the [u]entire trip[/u] was for the purpose of competition so there would be no cover.

I can't argue against their decision, it's up to them after all, but it's an example of how misunderstandings can arise.

So I cancelled the policy (for a full refund, so fair play to them in that respect) and am now looking for one that will rovide the cover I'm looking for - but it makes it a much more involved and time-consuming process.

[mentalextra]

[quote name='Kev' timestamp='1370793832' post='2105587']
To be fair, as i say i work in insurance and you wouldn't believe the kind of things you deal with. You would certainly realise why certain conditions are put into Policies and why it may seem hard work to claim at times! I did, however, just think Musicguard were out of touch with the market with the proof of ownership thing and i told them so. I just wonder if they are okay in the event of a claim before i give them or anyone else any more money.
[/quote]


That would be my concern? There are no agreed values with second hand instruments

[Kev]

Well that wouldn't be an issue as the Policies i am looking at are New for Old so you are insuring for the new replacement cost (obviously valuation make total sense for vintage/rare instruments, which mine were not). It's purely proof of ownership i am struggling with.

Edited June 9, 2013 by Kev

[Grangur]

[quote name='Grangur' timestamp='1369671549' post='2091417']
I just got a quote from Allianz. £1000 of cover inc, £800 for the bass and £200 for the amp, including cover when in and unattended vehicle. This came to under £2.70/month - £29/year.

[url="http://www.allianzmusicalinsurance.co.uk/find-the-right-policy/power-play.asp"]http://www.allianzmu.../power-play.asp[/url]

You can also get liability insurance too for, what seems to me to be good rates. I'd be interested to hear what others think of them?
[/quote]
Their policy looks good to me, and no I don't work for them.

[BigRedX]

The problem with insurance is that you have no real way of telling how good it is going to be until you need to make a claim, by which time it's too late if it turns out to be pants.

Read the small print and exclusions very carefully. Back in the 80s my band tried to take out insurance for all the gear we owned. When the policy arrived reading through the exclusions, it seemed that they only time we would be covered against theft was when we were actually on stage playing the instruments in question. Luckily we got a full refund on returning the policy.

[mentalextra]

[quote name='Kev' timestamp='1370794521' post='2105606']
Well that wouldn't be an issue as the Policies i am looking at are New for Old so you are insuring for the new replacement cost (obviously valuation make total sense for vintage/rare instruments, which mine were not). It's purely proof of ownership i am struggling with.
[/quote]

So, when you originally took the policy out did you own guitars that you had purchased from new?

[Kev]

When i had the Policy, i was insuring two basses that i had bought second hand. They insure all equipment new for old regardless of if you have owned from new or not. The issue was proving ownership, which they said i could not do without either a receipt for the second hand purchase, a bank statement showing the payment going out for the instrument, or a valuation. Given that i bought both off here and i took money out from different places to pay for both so no lump sum, they would only indemnify me if i had valuations from them, which they accepted as proof of ownership (not value). Having contributed towards a few policy wordings myself i know what to look for, and what annoyed me is this was not stressed in the wording nearly enough, so i felt i wasted a couple of years premium.

I don't have that issue now as i can prove ownership with receipts and a bank transfer receipt which i trust they will find to be in order, however this thread is just asking what peoples experiences are when it comes to proving ownership when it comes to a claim.

I'll have a look at that Allianz policy,

[Grangur]

[quote name='mentalextra' timestamp='1370795904' post='2105629']
So, when you originally took the policy out did you own guitars that you had purchased from new?
[/quote]

You could be disappointed if you took out a "New for old" policy and claimed for a modest 1970's USA Fender and got paid out for a modest New replacement.

Allianz are the insurers that most of the classical orchestras use for their stuff, or so I'm informed.

[Kev]

Just looked at the Allianz policy, looks okay but i prefer the wording of the Musicguard policy. I also think £15 MTA charge is very excessive (musicguard only charge for any additional premium). I was perfectly happy with the Musicguard policy, i just want to make sure they don't cause problems for items not owned from new in the event of a claim.

[Kev]

[quote name='Grangur' timestamp='1370798208' post='2105683']
You could be disappointed if you took out a "New for old" policy and claimed for a modest 1970's USA Fender and got paid out for a modest New replacement.

Allianz are the insurers that most of the classical orchestras use for their stuff, or so I'm informed.
[/quote]

Yeah, as i said they look at vintage instrument differently and claims are based on valuations, usually a couple of years old at worst.

[Grangur]

[quote name='Kev' timestamp='1370798375' post='2105688']
Just looked at the Allianz policy, looks okay but i prefer the wording of the Musicguard policy. I also think £15 MTA charge is very excessive (musicguard only charge for any additional premium). I was perfectly happy with the Musicguard policy, i just want to make sure they don't cause problems for items not owned from new in the event of a claim.
[/quote] Yes, you like the Musicguard policy, except they're already giving you concerns that they wont pay out. The whole test of insurance is when you claim and how long they take to pay out if they pay at all.

Also, don't forget bass players talk about a 1970s Bass as "vintage". In many folk's terms this is "contemporary". A cello is only considered vintage when it's 100 years old or there abouts. So you could be ok on your 1913 Fender.. If only.

[flyfisher]

[quote name='mentalextra' timestamp='1370794398' post='2105600']
That would be my concern? There are no agreed values with second hand instruments
[/quote]

Surely it's possible to just agree an insured value to be paid out in case of loss? Actually, I don't even see why it has to be a particularly accurate value as long as it is agreed up front. if you want to insure a bass for £5,000 you'll just have to pay a much higher premium than if you insure it for £500. But at least both parties will have agreed the sum insured and wouldn't have to argue the toss in the event of a claim.

[Kev]

Insurers will always opt to replace the instrument, rather than give a cash settlement. Almost always, if cash in lieu of repair/replacement is considered, it will be on a contribution basis only. That's certainly one reason why things need to be insured for what they are worth.

Why should an insurer allow you to under-insure? For example, if you choose to insure a £5000 bass for £100, yes the insurance company will only pay £100 in the event of a claim for theft. But think also of the increase in risk, a bass worth £5000 is a lot more likely to be stolen than a bass worth £100, so the insurer would want a higher premium for that extra risk.

[flyfisher]

[quote name='Kev' timestamp='1370811199' post='2105942']
Insurers will always opt to replace the instrument, rather than give a cash settlement. Almost always, if cash in lieu of repair/replacement is considered, it will be on a contribution basis only. That's certainly one reason why things need to be insured for what they are worth.
[/quote]

Perhaps they treat instruments differently then, but I've made claims for a stolen camcorder and a lost diamond our of an engagement ring and in both cases the insurers paid a cash amount and didn't require me to buy a replacement item.

[quote name='Kev' timestamp='1370811199' post='2105942']
Why should an insurer allow you to under-insure? For example, if you choose to insure a £5000 bass for £100, yes the insurance company will only pay £100 in the event of a claim for theft. But think also of the increase in risk, a bass worth £5000 is a lot more likely to be stolen than a bass worth £100, so the insurer would want a higher premium for that extra risk.
[/quote]

Fair point about the extra risk element of an expensive bass, but I'd expect the insurer to adjust the premium to account for that regardless of the insured amount. it shouldn't be difficult for a specialist insurer to do, should it?

it could be that someone has a very expensive bass that they can't afford to insure for full value, so they might decide that, say, £500 would pay for an adequate replacement instrument. So yes, they would be under-insured in terms of the instrument value, but not in terms of the underwriter's risk, which would be limited to £500 and the premium would be priced accordingly.

I know insurers don't like things to be under-insured but, frankly, insurance is now becoming stupidly expensive that it's worth considering 'self- insurance' in a lot of instances.

I knew someone who lived in a big old house. In the late 80s it was listed and insurance suddenly became much more expensive. The person concerned could not afford the premiums so asked if they could insure the house for a fixed amount so that in the event of a catastrophic fire they would receive enough money to at least move to a smaller house. They couldn't find any insurance on this basis because they all said that under-insurance would mean that in the event of a total loss the payout would be reduced by the percentage of under-insurance. Eg, assuming the house was £200k but it was insured for only £100k the insurance companies would regard that as 50% under-insured so instead of paying out the £100k insured value, they would actually only pay out 50% of that, i.e. £50k - even though premiums would have been set for a £100k insured value.

I've never really understood this.

Edited June 9, 2013 by flyfisher

[Kev]

Again, it is because on the higher risk of a more expensive risk. The Underwriters would indeed reduce settlement by the percentage of inder insurance, but they can also declare under insurance so great that they will void the policy from inception.

how about this: If the house was only insured for half it's value and, for the sake of discussion, half of the house suffered fire damage and would cost half the house's value (or the full sum insured) to repair, why should the insurers pay as if it were a total loss? They would quite appropriately pay 50% towards the repairs, as you have chosen to insure 50% of the value of your house.

[Kev]

And sadly, insurance is becoming so expensive for two reasons: to counter the significant increase in the number of people claiming on their insurance and, by far the most significant, PPI claims and the subsequent massive increase in FCA fees.

Anyways, this is getting a little off topic, anyone with positive experiences with claims on specialist music insurance?

[Grangur]

My bro in law is a cello teacher. He lends cellos to kids who are his pupils. Understandably they are all insured and he claims frequently.

On one occasion a cello was in a car boot, just to put it down for a while while organising the kids. Then in a moment of lack of thought the parent slammed the boot closed, decapitating the cello. The neck was a total mess. The insurers paid out with no fuss and bother. The cello repair was done, and paid by insurance.

So they're not all rogues. You just need a good company. In my experience I recon you want a large company who charge fair rates and have loads of customers. This way when/if you claim, your £500 claim is peanuts to them and they don't make a big deal over it.

[flyfisher]

[quote name='Kev' timestamp='1370815294' post='2106016']
Again, it is because on the higher risk of a more expensive risk. The Underwriters would indeed reduce settlement by the percentage of inder insurance, but they can also declare under insurance so great that they will void the policy from inception.

how about this: If the house was only insured for half it's value and, for the sake of discussion, half of the house suffered fire damage and would cost half the house's value (or the full sum insured) to repair, why should the insurers pay as if it were a total loss? They would quite appropriately pay 50% towards the repairs, as you have chosen to insure 50% of the value of your house.
[/quote]

Sorry to keep on about this but it's interesting to talk it through with someone from the insurance industry.

Is a more expensive risk always a higher risk though? I can see a possible relationship with theft, when a more expensive item is more likely to be targeted, but am I really at higher risk of having an accident in an expensive car than in a cheap car?

Regarding the house example, is a big house really likely to be at greater risk of burning down than a small one?

Perhaps the issue is concentrating too much on value rather than the insured amount. Suppose I want to insure my house against fire damage up to a maximum limit of, say, £100k. Why does it matter how much the house is actully worth? The underwriters will know the risks of house fires and they know their maximum payout is £100k - isn't that enough information to set a premium for the requested cover?

Isn't this the same sort of thing as life insurance? I can buy a life policy for any amount of payout depending on the premium I wish to pay. Same with musicians who choose to insure their hands against injury for any amount they wish.

I'm not having a go at the insurance industry, I just don't understand why simple 'agreed value' policies are not more widely available. It would surely save a lot of argument in the event of a claim? it would also avoid the policy buyer from the risk of valuing something that they are not really competent to do. For example, buildings insurance generally requires you to insure for the full rebuilding cost, including site clearance etc etc. How many householders really know how to determine that? So they can either pay for a professional valuation or just make a guess and risk being under-insured in the even of a claim. So perhaps they 'over guestimate' just to be safe, but then end up paying a higher premium than they really need.

it's all very unsatisfactory.

[Grangur]

Don't forget the risk insurers have of being de-frauded.

You could tell them you have a Wal. You don't own one, but you've got a pic of you holding one. You agree a value of £2K.
You take out a policy with £2k as an agreed value and pay your £15 a month (theoretical sum, i don't know the price).

3 months later you call the insurance company and claim for a theft of the Wal that never existed. And you take their £2k and buy a nice Wal, or whatever. This is why they want paperwork and evidence.

House/car insurance is different at least there's loads of paperwork to verify the car/house existed and you DID own it.

[Cat Burrito]

I think I need to phone Music Guard; my policy is up for renewal & in it's 3rd year. I have no receipts of my vintage gear which may make the policy a bit pointless