How do you value your tools and equipment?

Insure for replacement cost

Re: How do you value your tools and equipment?

Replacement cost.  Process:

1. Clean your shop.  Get rid of clutter and messiness.  Good time to purge before inventory.
2. Take a pile of photos of everything in the shop.  Every drawer.  Every bin. Every shelf.  Every big tool.  Every case.  Every tool box.  Just circulate around your shop in one direction, snapping everything.  If the contents are too difficult to see, set up a folding table and dump the contents on it , spread them out, then take the photos.
3. Sit down at your computer and make a list (maybe on EXCEL) of everything in the photos that you are about for valuation.  Bucketize by the storage container.  You can re-sort by category at a later time.
4. For each item, write down description, location (tag a photo), age, where bought, replacement value, current value (SWAG).
5. You can make a bin judgment if you like. For example, "Drawer #1 contents - assorted files and saws, (workbench - top left drawer), replacement for contents $300, estimated current value $100)."  Tag a photo showing the contents.  Call out unique items if they are valuable.  For example, "assorted electrical fixtures, wiring, faceplates, conduit and service boxes".  For example, "Assorted Tormek jigs, fixtures and attachments".  For example, "Plumbing supplies - fittings, propane torch, soldering supplies".  For example, "Box full of fluids - glues, lubes, finishes, cleaning supplies".  For example, "Box fully of exotic wood scraps".
6. Don't forget your supplies:  wood and other materials, fasteners, sanding and finishing, adhesives, etc.
7. Don't forget shop fixtures:  lighting, dust collection, added power, racks, benches, storage bins, hooks, etc.

I've done this three or four times.  Always get stuck on #3.  I wonder if I can get Alexa to transcribe my verbal descriptions into a comma delimited list?

Re: How do you value your tools and equipment?

I would ask the insurance agent how to value them to pay the lowest premium possible.

My assumption is that you can afford the replacement. 

I buy insurance to protect from  losses I can't afford.

Re: How do you value your tools and equipment?

I agree with Bill Tindall, insure for replacement cost because that's what you would be paying unless you like chasing around second-hand venues for replacements.  You may be able to weed out the items you would really be concerned about if lost to keep the premium down and you need to talk to your agent to find their premium rate structure which will give you more insight in how to approach this. There may be wisdom in just insuring what you can't easily cover yourself which is why I have a fairly large deductible on my house and car insurance.

I certainly agree with taking pictures, creating a spreadsheet or equivalent list.

Bill

Further to these points …

Make two lists:

1.  Replacement cost

2.  Selling price.

The first is for you in the advent of a fire or theft. The second is for your wife if you fall off your perch. Ignore both if your wife can get view them.

Regards from Perth

Derek

Re: Further to these points …

Re: How do you value your tools and equipment?

I forgot to ask if you would replace.

In my case I would not bother with  over 90% of my junk. 

^^^This

This is how to wisely use insurance.  Many have subscribed to the “as if it never happened” philosophy, and have paid exorbitant amounts of insurance through their lifetimes.  Cost of replacement insurance is fine, but have a deductible you can afford—this will help keep premiums down and allow you to set aside more money over the years to cover the deductible for a catastrophic loss (of any sort).  For small losses, for example, the theft of a few hundred dollars worth of tools (or tens of dollars, or a few thousand for some people), it’s probably not worth even filing a claim—the time and effort involved can be costly.  And police won’t spend any time on a theft other than taking and typing the report.

Jason

Re: Further to these points …

And that in itself is the reality of the perception of value.  

A short story, during the division of assets my ex secretly had my shop appraised by an "Expert".  His estimate was not what I would have valued it at, about 30% of what it would cost to replace at best.....  I had no complaints when I bought back her half value of the shop.  Be careful what you think it is and what it truly is...  

Take care, Jim

Re: How do you value your tools and equipment?

Providing any information to your insurance company could have consequences. When you get too high with your machinery value, they may just decide you are a business and not want to insure your home at all. I'm getting to the age my machinery will become a burden and not an asset. I removed all my shop liability and machinery value from my home policy. No claims over 50 years was a lot of money spent.

Has anyon else ever gotten such a request

State Farm does not know I have a shop in the basement. I have never seen any evidence that they care. 

We have the house and contents insured for replacement.  House burns, we get a check for some predetermined sum.  Who is going to carry off an impossible to fence table saw,nearly impossible to carry off?

I may have $15,000 in replacement cost tools .   But that is piddly compared to house and other stuff.  My daughters households have this value in electronics. Has anyone else ever got a request like this one?

Might State Farm story

Sorry, spell checker changed my title. I had trouble with State Farm when I started selling work from my shop. They sent out an adjuster to look at my situation. He stopped in his tracks when he saw the wood stove I had in my living room. He asked if it was professionally installed. It wasn't. Then we went to the shop and he was happy about everything except for no fire extinguishers. I got a call from the agent and said we had to make a decision. Either take out the wood stove, or stop the business. One was okay to risk, both were not. I took out the wood stove and bought 3 fire extinguishers.

Contents

We've had several insurance "inspections" of the past 30+ years where  they send out an appraiser who walks the property, inside and out, to see what's here and if there were any changes/additions made.  One guy was complementary of all the furniture I've made, and looked around the basement shop, paused at the electric sub-panel to note the township inspection sticker.  He also noted the fire extinguishers and alarms in the shop, kitchen, and garage.

Since the company already knew that my law office was in the house (half the basement space), my attention was peaked when he asked me several questions about selling or teaching wood stuff.  I promptly informed him as to the negative.  I make things for the family and (clicking into lawyer mode) told him I had no wish to incur liability if some newbe cut a finger off on the band saw.

He smiled and moved on.

Company used some formula for coverage on contents rather than valuing individual items.

Re: Contents

Company used some formula for coverage on contents rather than valuing individual items.....I thought they all did, which is why I asked how common it was to make such a request. 

Re: Contents

I believe I can specify for my house insurance if I want replacement value on contents or their other scheme but replacement is probably the bigger premium.

Bill

Thanks for the advice

I spoke to the insurance company again today. For me the fact is complicated by the fact that we own a small acreage and have a farm policy that covers our tractor and equipment. While our house contents are covered at replacement value (we were burgled once and the insurance was very good to work with) our tools and equipment (woodworking, chainsaws, tiller, mowers etc. are all covered at 80% of current value. They say I should value my equipment at the cost that I honestly would pay for them (as an example, I bought my Canadian made 8" General jointer at an auction for $1,500 and I would pay that much again so I can value it at that) on the flip side some smaller handheld power tools are only worth half or less of what I paid for them. I have bought a few things in the last couple of years and they are okay with me insuring them at cost. I asked how small I should go on my itemized list, and was told that there is a minimum $2,500 (I can pay to make it higher)allowance for miscellaneous tools (wrenches, sockets, screwdrivers, punches, chisels etc. ) Even though they are small items I can see them adding up quickly. I think I will take lots of pictures too, there is a big cost difference between Wera screwdrivers and Knipex pliers and big box store tools, I want to show accurately what I have. As an aside, once I was  told by an insurance company adjuster that a person can value their property at anything they like and pay the premium on that value, when a claim situation arises it is the insurers option to challenge that value and prove it is different than the insured value.

Re: How do you value your tools and equipment?

I have a sizeable collection/accumulation of bench planes.  As I have traversed the slippery slope I find that I use the #3 and #5 mostly, sometimes grabbing the 604.  It is time to thin the herd.

  Ron

Re: How do you value your tools and equipment?

I don't know how it works everywhere, but replacement cost where I am is the cost to replace what you have now, not to buy it new again.  They would be unwise to make it so tempting to spark up your shop.

Key concept in insurance is that you pay premiums and receive a lot of contractual promises.  Most payees have not read, and would not understand the contracts.  What those are worth you only find out when you make a  claim.  Small claims may get paid promptly to keep the money flowing. Or they may get paid because a particular type of loss has been regulated where you live because the courts got tired of the workload.  Auto being an example of a regulated sector, and more or less functions as it should.

And in fairness to the insurance companies, There is a lot of fraud, and how are they supposed to know there are such things as 350 dollar Japanese chisels.