Heritage claim

[Merlemantel]

For any who have Heritage insurance coverage, who have made a claim for a total loss, how did the claim affect your premiums? Did you lose your coverage? Did your premiums go through the roof?

[LAPlayer]

I have not had to make a claim but I've heard one/two anecdotal incidents when they did not renew a policy after a claim. I've heard mountains of statements from those who have made claims without such treatment. I know if I had a full-loss claim, I wouldn't hesitate to file my claim and afterwards to elsewhere if necessary.

[Bob Womack]

Insurance is a highly-regulated business. They've got a legal actuarial table comparing what you have spent for premiums to what you have been reimbursed for losses. When the loss becomes higher than the income they have derived from premiums, they terminate the policy. It is just the nature of the business and is not done with prejudice. From what I can tell, it doesn't affect your eligibility elsewhere.

As an anecdote, my house was covered by State Farm when we took a lightning hit that destroyed virtually EVERY piece of consumer electronics and fused some wires in the walls. We are talking stereo, TV, kitchen appliances, alarm clocks, etc. State Farm cheerfully took care of everything and then when it was policy renewal time they cancelled the policy. I was concerned and called up my agent and she explained things to me. She said, once again cheerfully, "Wait five years and call us again. You'll be eligible for us again." We did.

It is the way of things in the insurance industry. It is how the government keeps them honest.

Bob

[Merlemantel]

Originally Posted by Bob Womack

Insurance is a highly-regulated business. They've got a legal actuarial table comparing what you have spent for premiums to what you have been reimbursed for losses. When the loss becomes higher than the income they have derived from premiums, they terminate the policy. It is just the nature of the business and is not done with prejudice. From what I can tell, it doesn't affect your eligibility elsewhere.

As an anecdote, my house was covered by State Farm when we took a lightning hit that destroyed virtually EVERY piece of consumer electronics and fused some wires in the walls. We are talking stereo, TV, kitchen appliances, alarm clocks, etc. State Farm cheerfully took care of everything and then when it was policy renewal time they cancelled the policy. I was concerned and called up my agent and she explained things to me. She said, once again cheerfully, "Wait five years and call us again. You'll be eligible for us again." We did.

It is the way of things in the insurance industry. It is how the government keeps them honest.

Bob

Hi Bob, you are correct that insurance reimbursement is purely impersonal and actuarial. That said, this part, "you have spent for premiums to what you have been reimbursed for losses" is inaccurate. Insurance works because risks are distributed across a large group of individuals. Any individual risk assessment is calculated using that group data. And, there is some effect for eyes on the policy by an individual. I know this because of my work as an expert witness for insurance companies on medical and psychiatric claims. I havent had experience with insurance coverage for musical instruments, however, and I wondered how risk averse those policies are. Most claimants will never pay in close to what a single loss would be, so, if your calculus were true, they would be cancelling people right and left, but they aren't. The pool of people who have insurance coverage for musical instruments has a unique set of characteristics as opposed to home owners. The risk of loss is different, for one thing.

[jaymarsch]

I, and a number of my guitar playing friends, have had Heritage Insurance for over 2 decades. Several of us have had claims involving damage but not total loss. Our annual premiums went up anywhere from $4-$10. One friend had a total loss and it was her third claim in less than 2 years and they did cancel her policy. She got a new policy with Clarion, I believe.
My experience with Heritage is that they are approachable and very responsive to their customers. You can always reach out and chat with them about these things.
Best,
Jayne

[Moldstar]

Originally Posted by jaymarsch

I, and a number of my guitar playing friends, have had Heritage Insurance for over 2 decades. Several of us have had claims involving damage but not total loss. Our annual premiums went up anywhere from $4-$10. One friend had a total loss and it was her third claim in less than 2 years and they did cancel her policy. She got a new policy with Clarion, I believe.
My experience with Heritage is that they are approachable and very responsive to their customers. You can always reach out and chat with them about these things.
Best,
Jayne

That's good to hear, I have Heritage also.

[Brazad]

I filed a $500 claim with Heritage a few years ago - they handled it promptly and without hassle.

Then doubled my premium at renewal.

So I went to Clarion/Anderson and haven’t looked back. No claims with them so far but very affordable rates and exceptional customer service!

Gary

[jaymarsch]

Originally Posted by Brazad

I filed a $500 claim with Heritage a few years ago - they handled it promptly and without hassle.

Then doubled my premium at renewal.

So I went to Clarion/Anderson and haven’t looked back. No claims with them so far but very affordable rates and exceptional customer service!

Gary

Wow. I had a claim with Heritage a few years ago and they paid $1,300 for the repair and gave me $500 to compensate for loss of value. My premium went up $6 at the next renewal.
It’s good that there are choices and that you are happy with Clarion.
Best,
Jayne

[Bob Womack]

It is all regulated with legal actuarial tables. Just go into it knowing that there is a regulation design that protects you and allows them to make a profit. There is a hilarious story in James Herriot's books about farming in 1930s in Britain where an insurance salesman came around and sold casualty insurance to a farmer in the area who was skeptical about the whole insurance thing. Immediately the farmer was injured in a work accident, not once, but twice, and laid up in bed. Then the farmer's workers were injured in a string of accidents as well, and there were payouts for each and each worker got time off with pay and with replacement laborers to cover their labor. To get time off from being a farmer was unheard of in those times.

When Herriot asked the farmer about the stream of casualties and the insurance, the farmer had suddenly become an enthusiastic proponent of insurance, saying with a gleam in his eye that they took care of him really well. He was only sad that after the casualties and payouts the insurance company cancelled his policy.

Bob

[abn556]

I dropped my USAA musical instrument coverage and went with Heritage. It is a lot cheaper. Probably the only time I would file is in the event of a total loss.

[jaymarsch]

Originally Posted by abn556

I dropped my USAA musical instrument coverage and went with Heritage. It is a lot cheaper. Probably the only time I would file is in the event of a total loss.

I think that is a smart approach. I have a guitar that was mistakenly put through the baggage tumbler by Delta Airlines and it resulted in neck cracks on both sides at the nut. I decided not to use insurance and covered the cost on my own with the luthier who made the guitar. It wasn’t a costly repair and certainly not worth losing my coverage over.
Best,
Jayne

[tbeltrans]

I have Heritage coverage on one guitar (1995 Gibson Citation) that was appraised at $20k. I remember thinking they wouldn't insure a guitar for that much, but they didn't bat an eye. Instead, that is apparently one of their smaller policies. The agent told me they routinely insure orchestral instruments for over $100k.

So I have a feeling that if I did claim a total loss (hope that never happens...), that wouldn't pose a problem for them to reimburse. Whether they choose to renew or not would remain to be seen I suppose. Since I keep that guitar at home in its case when not being played, I doubt there will ever be a problem though.

Tony

[colins]

Originally Posted by Bob Womack

It is all regulated with legal actuarial tables. Just go into it knowing that there is a regulation design that protects you and allows them to make a profit. There is a hilarious story in James Herriot's books about farming in 1930s in Britain where an insurance salesman came around and sold casualty insurance to a farmer in the area who was skeptical about the whole insurance thing. Immediately the farmer was injured in a work accident, not once, but twice, and laid up in bed. Then the farmer's workers were injured in a string of accidents as well, and there were payouts for each and each worker got time off with pay and with replacement laborers to cover their labor. To get time off from being a farmer was unheard of in those times.

When Herriot asked the farmer about the stream of casualties and the insurance, the farmer had suddenly become an enthusiastic proponent of insurance, saying with a gleam in his eye that they took care of him really well. He was only sad that after the casualties and payouts the insurance company cancelled his policy.

Bob

Perhaps that is what inspired Terry Pratchett to write about Inn-Sewer-Ants in The Colour of Magic. The result was much the same!

Can't speak about Heritage (as they do not work outside the US) but I have found the musical instrument insurers Anderson great to deal with and well-priced over many years. Have not made a claim yet.

[TheGITM]

I have at different points in my past professional life worked in the insurance industry. The bottom line on insurance is, that it is akin to gambling in a casino.

Before I get lambasted, hear me out. Casinos have required payout percentages across various games. Let's take slot machines as an example. Slot machines can be required to payout upwards of 95% of what they take in. The 5% is kept by the house, and the period of time between money collected and money paid out is the float, which casinos can earn interest on. The time period to pay out 95% is not fixed, as in 95% of the money taken in doesn't have to pay out the same day. One or two large pay outs in a week can satisfy the 95% payout requirement... and of course all of the 'little payouts' add up. But in reality, most gambler don't win. The house knows this.

Insurance is very similar. It is expected that most of the insured will pay their premiums and not make a claim. Those premiums are what pay the much smaller percentage of insured that make claims. It's not uncommon for an insurance company to pay over 90% of the premiums back out in claims. In life insurance in particular, companies can actually pay out 100% of their premium income in claims (most will avg around 95%+), but they make interest income on the float between money in and claim money out... and there is often fee income, as well... so they remain profitable.

I carry insurance on my house (which includes enough to cover loss of my guitars), my autos, and medical, and I have a term life insurance policy that will expire in a few years and I will not renew. That life insurance policy was only intended to cover catastrophic loss while my kids were still young.

If I lose a guitar while traveling, or out playing, or because it gets throw from a hotel balcony... oh, well. I have another, and/or I will buy another. Since the odds of something happening to one of my guitars is very small, I will assume the risk. I feel the same about most out-of-pocket warranties, extended warranties, etc... they are offered because most people will never actually use/need them.

All that said, if you are one of the 'unlucky ones' that has to deal with something like a destroyed guitar or a pricey thing failing outside of it's manufacturers' warranty period, then yes, you win the pot... the slot machine pays off! Jackpot!

For every one of those, there are many dozens, or even hundreds/thousands, that will pay premiums and never need a payout.

Just my $0.02... YMMV, and all that.

[Guitars44me]

I have about $55K in Heritage coverage for all my gear.

I have never needed to tile a claim, but as mentioned above, I would be hesitant to do so unless it was a BIG one.

And, Since we live in a fire zone I sleep better knowing my gear is insured !

Stay well and have FUN

Paul