Insurance vs. Warranty

[Georg Baumann]

Greetings,

i just read your thread on extended warranty Guy and a question came to my mind.

I am aware that the parameters will be different depending on where people are. However, here is a thought. The following applies only for business.

I was talking to my insurance broker, while I initially insured my photo gear for Euro 15K, just some DSLR stuff, I investigated the following option. The numbers are just for excercise, however, they are real.

I was asking what it costs me to up the package to 50K, whereby, this should include travels. The answer was it would cost me an additional 200 euro per year, which is a no brainer. There were some restrictions, like not insured if you travel to Kabul for example. LOL

So, I wonder, would it not be a better option to pack that into insurance after the normal warranty runs out instead of buying the package from the manufacturer?

Of course, it depends on what the insurance exactly covers. In my case for example theft was included, some rules apply of course. Say it is stolen from your hotel room, they insist that it was in the room safe, and that a police report is provided stating the safe was opened with force, stuff like that.

What is your take on that folks?

Best wishes
Georg

 

[Jack]

My company here in the US (State Farm) offers camera insurance floater policies at roughly $16.50 per $1,000 of gear for non-pro, and $22.50 per $1,000 of gear for pros, and this is full coverage meaning virtually any loss is covered unless it is specifically excluded, and there are only a very few exclusions. However, one of those exclusions is mechanical breakdown. Generally speaking, there must be a loss event -- like you dropped your camera or it was stolen -- to collect. I suspect the mechanical breakdown exclusion is in there to avoid the very idea one should pass on a manufacturers warranty...

Oh, and should one feel compelled to claim they dropped their back to get coverage in the event of a basic mechanical failure, the letter of the law here in the states says that becomes a punishable felony, insurance fraud. So the simple and safe answer, at least for those in the states, get both

PS: Reminds of a story about a lawyer that insured his expensive cigar collection on a similar policy. Since fire was (and is not) excluded, he claimed his entire collection was damaged by fire after he had smoked the entire lot -- and he he actually won that case in our very liberal California courts! However, the insurance company not to be undone, hit him immediately with an arrest warrant for insurance fraud claiming arson. That went to court too, and the insurance company won that one!

 

[woodyspedden]

Jack

That is one funny story!

I also use State Farm and their policies for items such as cameras, jewelry etc have always been good coverage with decent premiums. Only issue I have run into is that I buy new stuff and change out old stuff so often I am driving my agent crazy with updating the policy LOL. Can't imagine what Guy would do!

Woody

 

[Guy Mancuso]

I have every piece of gear known to man and just use a check off system. LOL

 

[mark1958]

Jack.. so because i scratched the sensor plate and sent it in for a repair-- it cost 500 dollars to replace the sensor filter plate. Since i have a floater policy, I could claim it. So if i make too many claims will they increase my rates?

 

[Jack]

Jack.. so because i scratched the sensor plate and sent it in for a repair-- it cost 500 dollars to replace the sensor filter plate. Since i have a floater policy, I could claim it. So if i make too many claims will they increase my rates?

Depends on the company --- most have a frequency and/or severity threshold that triggers a policy non-renewal. They rarely raise rates for claims except on auto policies.

 

[fotografz]

Here are a few lessons learned the hard way ... if you use a rider on your homeowner's policy, you cannot use the gear to make money. For that, you need a business policy. If you cover the gear with a business policy, and the equipment is stolen while on vacation, it's not covered because it wasn't being used for business. In both cases, these are real claim denials from two different insurance companies.

So called, "all inclusive coverage", usually isn't. Read the fine print. My Homeowner's policy rider was an all inclusive coverage, and the claim for a camera damaged at a wedding was denied. Even my agent didn't fully understand the wording in the tome sent to policy holders, and thought "all inclusive" actually meant that. It didn't.

I now have a blanket business policy which has a set $ amount total, and any single piece of gear exceeding $5,000. value must be line listed. If you do not keep the list absolutely up to date, you lose if there is a claim on a new item exceeding $5000. value. I have a partial homeowner's rider to cover gear I tend to use personally.

Despite advertising claims to the contrary, claims people are in business to NOT pay claims. Insurance companies also employ 3rd party bulldogs to follow up on claims even if they think they can recover a nickle.

Not all policies are the same, so YMMV. If you read your policy, take two asprin one hour prior.

 

[mark1958]

Geez this is worse than medical insurance. I was denied coverage for a medication because i had not tried a less costly one first. So now they are dictating my medication not the docs. ok sorry for the diversion... just hard to believe all these caveats

Here are a few lessons learned the hard way ... if you use a rider on your homeowner's policy, you cannot use the gear to make money. For that, you need a business policy. If you cover the gear with a business policy, and the equipment is stolen while on vacation, it's not covered because it wasn't being used for business. In both cases, these are real claim denials from two different insurance companies.

So called, "all inclusive coverage", usually isn't. Read the fine print. My Homeowner's policy rider was an all inclusive coverage, and the claim for a camera damaged at a wedding was denied. Even my agent didn't fully understand the wording in the tome sent to policy holders, and thought "all inclusive" actually meant that. It didn't.

I now have a blanket business policy which has a set $ amount total, and any single piece of gear exceeding $5,000. value must be line listed. If you do not keep the list absolutely up to date, you lose if there is a claim on a new item exceeding $5000. value. I have a partial homeowner's rider to cover gear I tend to use personally.

Despite advertising claims to the contrary, claims people are in business to NOT pay claims. Insurance companies also employ 3rd party bulldogs to follow up on claims even if they think they can recover a nickle.

Not all policies are the same, so YMMV. If you read your policy, take two asprin one hour prior.

 

[ericstaud]

It's really worth it to list all the gear in an Excel document. This way the math is automatically done each time you add, remove, or change an item or value. Every time I buy or sell, updating the excel sheet is the first thing I do followed by sending a PDF via email to my agent.

 

[Dale Allyn]

These things get worse. Sorry.

Insurance companies rely on the efficacy of their bully tactics. I am speaking from experience here (and I have won). Ambiguous wording in policies are challengeable. Marc's scenario above is surely real, but depending on one's environment, i.e. depending on which state within the U.S. or your region, etc., an insured lay person has options. This, I learned, with the help of some very influential professionals in the field (i.e. lawyers, top-level risk management bankers, and judges).

In the U.S. when one's insurance agent (a.k.a. salesman) is not fully sure of the details within a policy or claim, it can clearly be argued that the wording of the policy is ambiguous, and likely with the purpose of strengthening the position of the insurer (the insurance company). In the U.S. an insured (us, as individuals or small companies) is not expected to be a trained lawyer, and should not be expected to retain a lawyer for the simple purpose of buying a risk policy. Further, such a policy can be scrutinized from the point of sales presentation to the point of a claim, for errors and omissions. Ambiguities, errors and omissions are BIG no-no's, and if brought to the attention of one's state insurance commissioner, will likely result in significant pressure for positive resolution in favor of the insured and possible investigation. In fact, if one suggests that the insurance commissioner will likely wish to audit this claim, from the point of sale of the policy to the point of the claim, AND will likely investigate ANY and ALL similar policies enacted during the same period, one will probably find that their legitimate claim is magically covered.

Now, I'm not suggesting that one use this sort of approach to get more that you thought you were buying protection for, but it is important that the onus is on the insurance company to sell you and fully explain, including their sales agents understanding the coverage they are selling, what your coverage is and how you are protected. Anything short of this must result in a loss to the insurance company and a properly settled claim in your favor.

Sorry... I'm tired and rambling. But "I pity the fool" insurance company that tries to mess with this poor bastard again. Been there, done that, have the t-shirt and their check.

Edit to add: There is a reason that the insurance industry carefully, and almost hermetically, separate the sales-force from the claims adjusters. It is not a "given" that an insured must accept this practice as ethical or in any way mutually fair. This is not to say that insurers don't have problems with improper and fraudulent claims. But if your claim is legitimate, don't bend to intimidation.

 

[Jack]

In most states -- and specifically in California -- there are many consumer protection acts in favor of insureds over insurance companies. Most large providers will not give you grief since the penalty for doing so is usually severe.

In Marc's case, he had the wrong coverage. Riders are usually NOT a good idea for insuring valuable gear. They are "add-on" coverages to existing policies usually designed to do something else -- like your homeowner's insurance policy which excludes business endeavors, or a business policy which excludes personal endeavors. Why do they cross exclude? Because they are targeted to different markets. If you use your gear both professionally and personally, then technically you need both policies; if you only use it only in one way, you only need one policy. Here is where it's a really good idea to know your sales agent and make it really clear to them what it is you do and how you want your gear covered. And then read your policy cover to cover and ask questions if something is ambiguous or doesn't make sense. And if you have both your business and home insured by the same carrier, you are far less like likely to suffer grief at the time of a loss since there is then little confusion over which company is ultimately responsible... Oh, and make sure any policy has world-wide coverage AND the insurer you purchase from is an "admitted" insurer in your state. The former is self-explanatory, the latter puts your state insurance commissioner's office behind you for full consumer protection.

To clarify further, the policy I was referring to above is often referred to as an "inland marine" or "floater" policy and that is different than a rider --- it is a policy dedicated to insuring specific items, and rated based on use, in this case professional or non. It is a stand-alone policy and is not tied to some other policy like your home or business as is a rider.

Regardless, there is not really any insurance policy replacement for a solid warranty...

 

[Guy Mancuso]

I have a business policy with Hill and usher underwritten by travelers. It's a complete blanket with liability , gear, rentals and all sorts of stuff. But I do keep a list of my gear and just send it in when I make a change. Like every week. LOL

 

[Dale Allyn]

Man, Guy, in your case I think we could just build a database with a web "portal" for your insurance company and it could auto update daily. Maybe run a script every night.

 

[Guy Mancuso]

Great idea just run a script

 

[Georg Baumann]

Greetings,

this is all very interesting information.

As I am in Republlic of Ireland things are a wee bit different here of course, but the general consens remains.

I am insured as a business, and I put it all under one blanket so to speak, liability etc. however, it was a real effort to find a company to start with that would insure me!

At some stage I was pointed to the IPPA, the irish professional photographers association, and they claimed to make a special deal for photographers not available anywhere else, of course, you had to become a member first at a cost. LOL

Turned out, this whole thing was nothing but a rip off, and nearly twice as costly as what I pay now per annum. I remember well how difficult and time consuming to was to find the right package.

On the initial question, I am still not certain what the best practise is. My gut tells me that manufacturers extended warranty is payed at a premium price....

I am not too bothered with gear where a body costs anything inbetween 2-5K in the DSLR world, but in MFDB terms this is a different story to me, and with a back and camera gear that tops 50K quickly it is a different matter.

I guess, what I want to avoid is to pay twice if you get my drift, covering the same thing by insurance and manufacturers policies is a waste, and at a glance it appears that redundant coverage is nearly inevitable to some degree.

What the Hell.... I only wanted to shoot pictures and sell prints ... and now I have to deal with all that crap. :ROTFL:

 

[gsking]

PS: Reminds of a story about a lawyer that insured his expensive cigar collection on a similar policy. Since fire was (and is not) excluded, he claimed his entire collection was damaged by fire after he had smoked the entire lot -- and he he actually won that case in our very liberal California courts! However, the insurance company not to be undone, hit him immediately with an arrest warrant for insurance fraud claiming arson. That went to court too, and the insurance company won that one!

Not true, but still funny. And something that wouldn't shock me in Cali.

http://www.snopes.com/crime/clever/cigarson.asp

Greg