Insurance

Re: Insurance

George Balock

>John,

In the last AAW Journal Bob Rosand says that he pays $1200 a year for his detaached shop. So, $700 seems cheap.

George

Re: Insurance

Russ Fairfield

>It seems to me that you have several choices. The underwriters are looking at the exposure to risk. Using the shop as a part-time hobby is the lowest risk to them. A business means more time in the shop. A classroom means more people in the shop.

You can be honest up front and pay the price. Or, you can insure it with the house as a garage, work safely, have a couple fire extinguishers handy, and hope you never have to file a claim. I have asked a lot of woodturners about their insurance coverage, and this is what most of them are doing, even when they are using it as a classroom.

Re: Insurance

Bill Grumbine, Kutztown PA

>Hi John

I also have a detached shop (a.k.a. garage) and I am paying a little over $1200/yr. I am not even fully insured for the new machines that just arrived. With their value, I am going to have to spend close to $600 more per year! I am real careful with flames, and I have a burglar alarm and a rifle. ;-)

I am insured for visitors to the shop, fire, theft, product liability, and liability off site, like if I am doing a show and someone is hurt in my booth, or if someone tries to steal my stuff and they get hurt - I mean if someone steals my stuff.

Bill

Re: Insurance

MikeinCapeMay

>I do exactly as you've described. It's a detached building where I spend 4 to 10 hours a day, 4 to 6 days per week. I sell things at shows, a few shops and one gallery. No customers come to my shop and I don't teach (haha that's a scary thought). It's insured on my homeowner policy as a detached hobbyist workshop.

I'm careful and yes I have a fire extinguisher.

Re: Insurance

Mark Mandell - Gone Round In Jersey

>John,

Sorta Bad News: The cost is very necessary.

Good News: It's an above-the-line business expense.

Caution: If you have people coming, especially like paying students, you must disclose that to your carrier and have the rate set accordingly.

Bad News: If one of those people gets hurt, even (usually) by their own fault, there will most likely be a claim. Then the insurance company (from whom you hid your little enterprise) pulls your tax returns, denies all coverage, cancels your policy for fraud.

Worse News: Your mortgage company gets notified that your homeowners policy has been canceled, and informs you that you now have 30 days to get new insurance or you will be in violation of your mortgage causing them to call your loan.

REALLY BED NEWS: John Lucas can't get insurance from anyone at any price because he pulled that little quickie on the insurance company (they all talk to each other, you know), and gets to explain to Mrs. Lucas why they're living in an apartment now . . .

STOP! Rewind . . .

Pay the $700, John, it's cheap enough.

|:-}

Mark

......which explains...

TD

>why so many of our businesses are moving to Mexico and China.

Re: ......which explains...

Gil

>Not nessicarly that. The cost of labor is the driving force of our businesses moving to Mexico and China. Bottom line is king in big business. IBM can have 3 computer programmers working in India, and living like kings for the cost of one programmer in this country. Global business brings global employment I guess. I hate outscourcing, it makes the rich richer and poor well still poor!

/end rant

Gil

Re: ......which explains...

Mark Kauder. Phenix City, AL

>Up on soap box-

The lower labor costs are the main reason for outsourcing for companies were labor is the main cost (call centers, programming, etc). I work for the company that owns Charbroi Grill, we just recently announced that starting in 2006, we will be sourcing all our grills in China and ending all manufacturing in the US. (We also own Zebco fishing rods an reels and they have been made in China for years). For grill, labor is a small fraction of the cost. Materials are much greater, and they too cost less in China. A sheet metal stamping die in China can cost as much as 1/4 the cost of the same item in the US. Even with the added shipping costs, we can source grill in China for 25% less. A large piece of the savings on that end are relaxed environmental and litigation costs.

However, as bad is this news is for our company, it was the only way to keep the company afloat. We loose 500 manufacturing jobs, but keep 500 design, sales, marketing, IT (me), etc, jobs. Our company is privately owned, and the owners are very wealthy. We lost somewhere around 14 million dollars this year. They could have just closed the doors, and saved the money they would lose this next year as we transition. But they are responsible employers, an saved as many jobs as they could by outsourcing the low end jobs and saving the high end jobs.

Quality depends on the specs you give the Chinese, and the Quality Control you maintain. Some of the finest products I have ever seen, are our high end grill that have been source in China for years.

Off the soap box.

Mark

Re: Insurance

john Lucas

>Thanks to all. I don't have a lot of luck so I figure if I lie to the insurance company someone will figure it out. Besides I'm in a town of 30,000 and I'm always surprised at what people I've never met know about me. Especially my turning.

I guess I'm just nervous about the expense because the house is more expensive than I had planned and then add several hundred dollars on insurance and now I'm getting nervous.

I found it interesting that it made a difference if I had a name on the shop. One person told me they called it a studio and got cheaper insurance. I'll try that next week and se what happens.

Re: Whoa! . . How

Mark Mandell - Gone Round In Jersey

>did we get from John's studio insurance premium problem to explaining multi-national outsourcing, corporate bottom lines, and workforce demographic shifts in global economic theory? Either my version of the Board is missing more than a few posts, or someone got squishy and Russ deleted them, or you guys are communicating on a whole different level.

M

Check with USAA...

BubbaBob

>...at www.usaa.com They only insured active and retired military officers and their dependants for years, but I believe they sell to general public now. They are an excellent company (A. M. Best rated A++) that believes in good customer service. I've never been insured on home or auto in my life by anyone else...dad had it when I was small, and I continued when I was old enough to get my own insurance.

Great rates, great care of customers.

BubbaBob

P.S. for rate...

BubbaBob

>...comparison, I have 92K on the house, 62K on contents, 100/300K liability, 22K on "unattached outbuildings" (sounds like a shop to me), and 18K on loss of use (motel/apt during rebuild after loss for example) and I am fire rated 9 (next to worst...no hydrants or paid dept within 5 miles). This is for stick built, wood siding on crawl space. I pay 715.00/yr.

BubbaBob

Hmmm...I better stay away from that one...

BubbaBob

>

Re: Insurance

Russ Fairfield

>John,

Can you build a breezeway between the garage and the house and call it attached?

Re: P.S. for rate...

john Lucas

>Bubbabob

Now that sounds like my place. They told me that even though I'm in the city limits of Baxter, and it's a town about a mile in any direction, the fire department would take 20 minutes to get there. basically your on your own. I'll check with your recommendation. Thanks.

Re: Insurance

john Lucas

>Russ

I'm going to check on making it attached to see if that makes a difference. I think the problem is that it's a wood shop and they worry about the shop taking the house with it when it burns.

I'm going to put a sort of car port on the front anyway. I need a place to put the Blacksmith shop. Needless to say I didn't tell them about that hobby.

Sorry, can't help it...

BubbaBob

>...but the fact is the rich keep getting richer because they keep doing those things that enable one to be rich, and the poor stay poor because they keep doing those things that keep people poor.

Life choices, life decisions...you are what you make of yourself.

rant mode off

BubbaBob

Re: Sorry, can't help it...

john Lucas

>Bubbabob

What about us poor people who want to be rich. I think Popeye said it best. I yam what I yam. I want to earn my money the old fashioned way. Win it in the lottery.

Re: ......which explains...

Barry Turner

>Maybe some of our unemployed programmers need to relocate to India and go to work for IBM.

Re: Insurance

Barry Turner

>Instead of a breezeway...........you may need a firewall............

Re: Insurance

Mike Rubes, Apex, NC

>Hi Mark,

First off, Happy Birthday! I hope things are going round smoothly in New Jersey :)

Now, for a question. Do you, or anyone reading, know how this all relates to someone who has a purely hobby shop in their garage? Take an average shop guy with $7500 worth of tools, wood and "stuff" in his garage. This for someone who doesn't run a business, *never* has a "student" of any kind in their shop and generates no income from it. The person might occasionally sell a bowl for $50, but never more than a few hundred dollars a year, and then it is mostly to neighbors, friends and the like.

Is there any special insurance above and beyond the regular home-owners insurance that an "average Joe" like that should carry for their garage shop? Would it be different if the garage was attached or detached? What about a basement shop? The above description pretty much fits me, so I am very curious about any information you might have.

Thanks,

Mike

No weekend shop time in Apex, NC....

Re: Insurance

Les Robison

>Mike, I have my home owners with the Hartford (AARP) and just put a rider on the policy for my shop at a different location than my house. It cost me $15/year. It is listed as a hobby shop and I have lots of tools, etc., also and alarm.

Re: Insurance

Mark Mandell - Gone Round In Jersey

>Mike,

What you want to do is speak to an agent for another company for a prospective quote. Ask for a quote without the presence of a woodshop, and a number with an estimate of the tools on hand as you are "thinking of taking up the hobbie." There will be some questions regarding stroage of flamables like solvents and dust control and removal and such. If the numbers are close, you know it's not a big deal for the carrier. You may then want to contact your present agent to list that $7500 in machines on the personal property portion of your policy.

Note on flamables. The Insurance Company may well want to see that you are storing the stuff in a proper fire-retardent locker.

Key again, Mike, is not to try to shave a few bucks by lying to the carrier.

Mark

Re: Insurance

Jerry Whitaker

>I had my garage broken into several years ago before I started turning but I had a lot of power tools stolen along with my prized air compressor. At that time my property was valued at $80,000 so the deductible (1% or $800) remained my loss. When they asked me approximate dates of purchase, they got to me even more by depreciating everything saying the replacement value I was asking for was unreasonable due to their age. In my opinion, most of those stolen tools were of better quality than new ones which cost more to replace. By the way, they prefer receipts if you have them but will take copies of the front page of owners manuals also. If you throw a screaming fit, sometimes you an do a little better or if you just cannot get along with the adjuster, ask for another one. I asked for another one one time when my house got flooded and came out $8,000 better. The first one was refusing to give me new carpet and wanted to dry and re-install the stuff. I told him that I wanted new carpet and was going to call the insurance company. He said, "Good luck, your carpet is cheap contractor crap....it is made out of oatmeal". When I reported that statement to the insurance company and told them that I could prove in my building contract that I had paid for a carpet upgrade at $19 sq. yd. That was good carpet back in 1977. I won that deal so don't give up too easy witn an adjuster.