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Where is a good place to get a policy for instruments?

What places should I avoid?

jon112780 wrote:Where is a good place to get a policy for instruments?

What places should I avoid?

You can talk to your regular company about an inland marine policy, which provides good coverage for most risks.

I have my instrument insurance with Clarion, who specializes in writing policies for musical instruments. It's expensive, though, if you aren't a member of a group that gets a group discount. The AFofM does, but I am not in the union so that was no help. I joined Chamber Music America for $80 a year, and that gives me the steeply discounted rate from Clarion. I think I'm paying a little under $200 for very comprehensive coverage of about $40,000 worth (at replacement cost) of instruments. It would be closer to $500 without the discount.

They cover every just about possible mishap except rot and vermin, neither of which should be issues for us.

Rick "hoping he never needs it" Denney

I have mine with State Farm. I tried to get a rider on my homeowner's Ins but that didn't fly being I would be taking the horns out of the house. State Farm has a personal articles policy that fits exactly what I need. The horns are insured anywhere I would go. I 'm paying about $200 per year but I also havemy wedding ring and the wife's engagment/wedding ring on the policy (her ring is about the value of another tuba)

I am an insurance agent by trade. I represent a company that is in the mainstream of the industry. A rider on your homeowners policy works great unless the insurance company finds out you took money for playing, even once. I have seen one policy about 20 years ago that charged a bit more premium for instruments played for hire. I really think that is a dinosaur. If you are confident that there is no way they can deny coverage under the play for hire exclusion, a homeowner's rider is fine. Otherwise, don't take any chances, go with Clarion and sleep nights. Clarion makes it's living insuring professional musician's instruments.

I just went on the website and got quote for a $10,000 tuba just for the heck of it. $160 per year.

http://www.clarionins.com/" target="_blank

I don't represent them. I don't have my coverage with them, but all my professional friends do. I don't play well enough to get paid so homeowner's works for me.

I have an "All Risks" policy with MusicPro Insurance for full replacement value for listed instruments and equipment ($24,600).

My premium is $105/year, with a $100 deductible (per loss, not per item).

In addition to the instruments and equipment, coverage includes:

$5,000 in computer hardware and software
$5,000 for valuable papers
loss of income up to $1,000
$25,000 for newly acquired property (up to 30 days)
$25,000 for borrowed property (up to 30 days).
$2,500 per day up to $25,000 for rented reimbursement when equipment is rented to substitute equipment involved in a coverage loss (lost or repair)
replacement property is covered up to the value of the property being repaired
repurchase option for recovered lost, stolen or misplaced property

similar to tbn.al, If I'm getting $ for playing it's a mistake, so homeowner's covers me, (also our auto covers a fair bit for things lost or damaged when in the car).

Rick Denney wrote: Rick "hoping he never needs it" Denney

OK, I'll bite - why do you need it?

My understanding of insurance may be too simplistic: you bet the house (the insurer) that disaster will strike, at odds calculated by the house so that it wins on the average. Of course it differs from casino gambling in that you must take one side or the other of that bet anyway, as long as you have anything to lose, and in some cases it's more responsible to take the insurance buyer's side, rather than bet against a potentially unsustainable loss. That's why I buy health insurance, for example, even though I personally believe my odds are better than the insurance company's - if I pocketed the $428/mo, and lost the bet, the medical costs would be a living (or not) nightmare.

A professional tuba player might be in that kind of position - presumably with little or no financial reserves, unexpected loss of tool of trade would be disastrous. Or might not be - if you can scratch up $12K and put it in a CD or something and leave it alone as long as your tuba remains unstolen, then you can cancel your insurance and come out way ahead, true?

Homeowner's policy may be different, if the instruments more less ride for free.

tbn.al wrote:...A rider on your homeowners policy works great unless the insurance company finds out you took money for playing, even once... If you are confident that there is no way they can deny coverage under the play for hire exclusion, a homeowner's rider is fine. Otherwise, don't take any chances, go with Clarion and sleep nights...

This is REALLY good advice. I know we often see urban legends that start out with "a friend of mine..." but sometimes they're real.

A friend of mine (yup) lost keyboards, amp, speakers, synth - worth at least $15K - in an afterhours fire at a theater where he was playing a 2-weekend run for a local community group. After the smoke cleared, they were jerking him around bigtime, so he filed an insurance claim, figuring to hit them for the deductible and then let his carrier pursue subrogation. That's right - claim denied, "play for hire" exclusion. So he's hired a lawyer and he'll wind up standing in line to recover what he can from a (former) customer he had to sue.

If you don't go Clarion and you're at all in doubt whether you have the coverage you want, get confirmation in writing from your agent.

Sometimes you get what you pay for.

Donn wrote:

Rick Denney wrote: Rick "hoping he never needs it" Denney

OK, I'll bite - why do you need it?

The $240 a year that I spend (for CMA membership and for the Clarion insurance) is money I can throw over my shoulder and not notice its absence.

But if I'm carrying my Holton and my B&S in the back of my Subaru, and I get rear-ended, they'll likely be destroyed or seriously damaged, I want a policy that is based on their real replacement value, not based on an argument with Allstate (with whom I have my homeowner's policy) on their actual market value. What if I had to replace my Holton? What's the likelihood of finding a Bb grand orchestral tuba with those particular playing qualities in the battered condition that brought the price down to what I paid? And what about the money I spent getting it brought back up to good playing condition? I might be able to find a replacement for $6000 if I search long enough. But if it's destroyed, I don't want to start another multi-year search. I might have replace it with something already in better condition, and already with those playing characteristics, if I want a replacement in a reasonable time period. That might cost quite a lot of money--certainly more than I have invested in the Holton. The cost of that is not money I can throw over my shoulder and not notice its absence. I want to agree with the insurance company up front what the tubas are worth, rather than have to argue with them on the basis of what I paid. That's the difference between price and cost, and I want price coverage, not cost coverage.

And what if some clumsy idiot stumbles over my tuba as it is leaning against my chair during an intermission? I have to assume they will not pay for the damage. And that clumsy idiot could easily be me.

I once took my two tubas out to the car after an orchestra rehearsal, many years ago. I set the Yamaha (in its hard case) down behind the car, and put the Bb tuba in the back seat. Then, I hopped in the car and attempt to back out of the parking spot. "What's that noise?" Fortunately, the hard case did it's job and I only dragged it a few feet. But stuff happens--we get absent-minded, or we are forced to play in situations where the instruments are highly vulnerable.

And what about those tubas sitting in my car while I'm at work on rehearsal days? What if the car is stolen? Will Allstate take my word for it that the car contained expensive bits? I know from experience that car insurance rarely provides remotely adequate coverage for vehicle contents, and those losses are usually covered under a home-owner's policy. And those policies are limited to specific situations and uses. The coverage for one's home is based on protecting the home and its contents, and homes are worth far more than tubas. Thus, home coverage usually has a very high deductible and other features that are related to the exposure of a permanent building rooted to the ground in some safe spot. The exposure for tubas in the back of my car is different. Yes, you can cover them on a home policy, but it takes some effort to get the appropriate coverage.

Even with tubas carried in the car, the exposure to risk is relatively low, but then so are the premiums. The cost of the insurance would return your $12K investment after something like 20 or 25 years. I did without it for a long time, but as my collection improved, so did my vulnerability to loss.

And your $12K CD is one way to cover the risk, sure. But I judge that the cost of coverage lower than bottling up $12K just for that protection. After all, I have lots of other things that are protected in lots of ways by my cash reserves (example: my income), and those protections would be undermined if I had to use them up to replace a tuba destroyed in a car wreck. Especially if that car wreck also injures me, leading me to need those reserves for their real purpose. It's a calculation we make, and the more we have at stake, the more seriously we take it.

Rick "who has the cash, but not for protecting the tuba collection" Denney

Rick Denney wrote: But I judge that the cost of coverage lower than bottling up $12K just for that protection. After all, I have lots of other things that are protected in lots of ways by my cash reserves (example: my income), and those protections would be undermined if I had to use them up to replace a tuba destroyed in a car wreck. Especially if that car wreck also injures me, leading me to need those reserves for their real purpose.

True, I guess it matters a lot how tight your finances are, vs. the replacement fund. But, real purpose ... if there's a real purpose of savings, for me it's extreme old age, where "extreme" means past the point where it really matters to me how cool my tuba is. At that point - assuming both escape any tuba disasters - Mr CD will have $12K plus interest from his plan ($20K?), Mr Insurance will have -$200 a year from his plan (at same interest, say -$5K?)

I'm not saying anyone's an idiot to take out a policy on a tuba, but if there's someone out there thinking "Oh, no! am I an idiot not to have special insurance for my expensive tuba?" ... well, not necessarily.

Donn wrote:

Rick Denney wrote: Rick "hoping he never needs it" Denney

OK, I'll bite - why do you need it?

As you note, "the house" (the insurance company) structures things so that they win. Does that mean that you lose? Yes...but...

When predicting the future, you must consider the Expected Value (EV) - but you must also consider the Variance (V). EV tells you how things will work out if you ever see "the long run". V tells you how bad it CAN be (and, if it's bad enough, you might never see "the long run" - so perhaps EV is not relevant).

Insurance companies (and "the house", in general) specialize in surviving to see the long run. They do enough business with enough clients so that they see "the long run" all day long. The key here is that increasing the NUMBER of clients increases their EV by n - but only increases their V by log n (oh dear...numbers...it's enough to know that log n is much, much less than n, for large n).

The massive number of clients means that the insurance companies' situation is BUFFERED. Their return will fluctuate up and down - but their V is controlled so that (in theory) they are never wiped out. Losses occur, but are compensated for by later Wins.

The individual may not be in the same situation. Consider two cases: a $100 electronic gadget vs. a $100,000 house. Many stores will sell you "insurance" (they call it an "extended warranty") on the $100 gadget. Is this a good purchase? Probably not, for most people. You already know that ON AVERAGE the insurance is a bad deal (you will get back less than you put in) - and the worst loss you can take is $100. That's not going to cripple anyone, or put them into bankruptcy. In other words, you make enough $100 purchases that you *will* see "the long run". so...do not purchase extended warrantees.

The $100,000 house is another matter. As before, the insurance company knows that they will charge enough in premiums so that they won't be wiped out by the small number of houses that disappear in a fire. How about the home owner? Will the average home owner see "the long run"? No - owning a $100,000 house (or, worse, owning a $100,000 house and owing the bank $80,000) without fire insurance is completely irresponsible.

How much is is worth to you to eliminate the huge downside? That's what the insurance company offers. They offer the ability to buffer the (rare) house fire. In exchange, they need you to pay more that this protection is worth IN THE LONG RUN. Because, if it happens to you once, you won't see the long run.

Where does a $5000 tuba fit in? a $10000 tuba? a $25000 tuba? That depends on the individual. What would be the financial impact of a sudden loss? If that tuba is your "means of production" and you would have to flip burgers for 5 years to replace it (rather than continue your budding career as an internationally known solo-ist) then insurance is worth something to you, and insurance makes economic sense. If you play as a hobby and have 3 other tubas that could do the job (but just don't happen to be your current favorite) - then insurance is a losing proposition.

The real test is: how many items of this particular value are you considering insuring - and how INDEPENDENT are the possible losses? If you own 1000 $5000 tubas, it makes no sense to insure them UNLESS it's possible that ALL of them would be destroyed in the same catastrophic event (as opposed to 1000 independent events).

so, if you are Miraphone and you supply tubas to your traveling performing artists - it seems reasonable to "self-insure". You'll see the long run and you'll save the extra vig that you would otherwise have to pay to the insurance company.

but, if you are a struggling un-affiliated artist and will have to PURCHASE a new axe on short notice when an airline crumples the bell (so that you can give your scheduled performance in Podunk), then you MUST have insurance - and should probably pay a premium for instant replacement service.

Suppose you are a poker player, and have just discovered that you are a 90% favorite in a huge pot (say, $100,000). Your EV is $90,000 - but you might walk away with zero. Someone offers you a side bet: if you win, you pay him $10000 - but if you lose he pays you $80000. Is this a good deal for you?

The side bet is 8-1 (the money) on a 9-1 proposition. Clearly, this is a bad bet for you. But, taken together, you now have two possibilities:

a) you win the $100,000 pot, and pay out $10,000 for losing the side bet: net gain $90,000
b) you win $0 in the pot, but win $80,000 on the side bet: net gain $80,000

Your EV has gone from $90,000 to $89,000. Is it worth $1000 (in the long run) to be SURE that you will win AT LEAST $80,000 (as opposed to the small chance of winning $0)?

That is "insurance". Notice that the "insurer" has en EV of $1000. Nine times out of ten you pay him $10,000 (for a total of $90,000) and one time out of ten he pays you $80,000 (for a total of $80,000) - for a grand total of $10,000 profit spread out over 10 bets, or, $1,000 per bet.

Now...suppose it's a $1.00 pot, and you are offered a side bet of $0.80 to $0.10 on that 9-1 proposition. Is *that* insurance bet a good deal? Probably not, eh? Why?

EV, Variance, and the "non-linear value of money". All three must be balanced to make the right decision.

sloan wrote: Now...suppose it's a $1.00 pot, and you are offered a side bet of $0.80 to $0.10 on that 9-1 proposition. Is *that* insurance bet a good deal? Probably not, eh? Why?

Neither are good deals. The other one is just more palatable because this hypothetical poker player's enjoyment of risk and feel for odds has apparently been overcome by his cupidity.

sloan wrote:EV, Variance, and the "non-linear value of money". All three must be balanced to make the right decision.

The non-linear value of money is the deciding element for me. The premium is small--and not a noticeable expense in my budget. A loss would be large, and noticeable. I have the cash, but using the cash for that removes it from my reserves, and those reserves are there to protect more important things that the tuba. It's cheaper to rent the insurance than to risk those reserves for something as unimportant as the tuba. So, the tuba is valuable enough so that I desire protection, but not so valuable that I'm willing to essentially buy it twice by putting a replacement amount in cold storage in case of loss.

If I intended to stop playing the tuba someday, I would get that money back into circulation, and with a healthy return, and it would make more sense to self-insure. But I don't intend to stop playing the tuba, so it's just money for my beneficiaries to fight over. I'd rather leave the tuba to a worthy young tuba player. And if I'm forced to stop playing the tuba, I can sell it and have the money.

Rick "no fan of buying insurance but doesn't mind renting it" Denney

Donn wrote:

sloan wrote: Now...suppose it's a $1.00 pot, and you are offered a side bet of $0.80 to $0.10 on that 9-1 proposition. Is *that* insurance bet a good deal? Probably not, eh? Why?

Neither are good deals. The other one is just more palatable because this hypothetical poker player's enjoyment of risk and feel for odds has apparently been overcome by his cupidity.

spoken like a true amateur poker player.

Rick Denney wrote:

sloan wrote:EV, Variance, and the "non-linear value of money". All three must be balanced to make the right decision.

The non-linear value of money is the deciding element for me.

For an excellent primer in the non-linear value of money, watch "Deal or No Deal". The deals offered by the Banker are *never* proper odds - but every contestant has a different idea of "life-changing money", and once you get into "life changing money" territory, the value of money becomes VERY non-linear. The prospect of gaining another million dollars may not balance out the fear of losing an amount much smaller than that.

The reason is that the FIRST dollar is much more valuable than the LAST dollar.

Playing "double or nothing" for quarters is child's play - playing for $1,000,000 is not a good idea (unless you are "the house"). The difference has nothing to do with "the odds" (and so some are fooled into thinking that one is rational and the other is not) - the difference is that (I'll wager it's true for EVERYONE reading this), a million dollars is not WORTH ten times a hundred thousand dollars.

Here's a classic problem to test the limits of your intuition: suppose I offer to flip a coin until it comes up heads, and you have to pay me $0.01 times 2^n (where 'n' is the number of tails that came up before the FIRST heads).
0 tails = $0.01
1 tails = $0.02
2 tails = $0.04
3 tails = $0.08
4 tails = $0.16 ... and so on.

Since you will be paying me something every time, I have to pay you something up front to convince you to play this game.

Will you play this game for $0.10? $1.00? $10.00?

How much (what's the SMALLEST amount) would you ACCEPT to play this game?

How much (what's the LARGEST amount) would you be willing to pay ME to play the game, if we switched sides?

HINT: the "rational" answer is probably wrong. (but, you get partial credit if you tell me what the "rational" answer is). [and - no tricks: the coin is fair and the flipping is fair]

bloke wrote:
bloke "not participating in the dennesloanian banter and quasi-logic"

I love it! Sometimes you crack me up. Not often, but enough for me to keep reading your posts.

I had an inland marine rider with Nationwide on my Miraphone 186. Two years after I bought it, I fell down steps at a rehearsal/concert site (2 hours before performance). The horn was a complete disaster. Nationwide paid the claim, without a deductible. That, along with trading in the destroyed horn, bought me a new one (186) and all it cost me was an airline ticket to go try out new ones. Your mileage may vary.

Incidentally; my new insurer (I moved) will not do a rider for it, but says it is covered under my regular homeowner's policy or my car policy (if it gets hurt or stolen while in the car). There is a deductible now, though.