Does it make sense to insure guitar for full value?

[Rosewood99]

Originally Posted by Howard Emerson

Heritage is so inexpensive it makes no sense not to have it.

If you're driving in the car and get rear ended, smashing guitars as result, or walking up a stairway and the handle breaks, allowing the guitar to fly down the steps to a crash landing, etc, etc.

Heritage policies cover all that stuff. I think my policy runs $250 a year, and I've got a Monteleone, a 1930 Gibson L-5, a Flammang L-40, a Flammang L-40 12 string, a 1910 Salvador Ibanez, etc.

Stuff happens, and UPS, Fedex, USPS don't care a bit.

I don't feel unlucky, but I don't want to give it a second thought no matter what I'm doing.

Best regards,
Howard Emerson

My guitars stay at home. I have many other things I can spend $250 a year on. Never had an issue in over 12 years of owning guitars. Not saying something could happen, but I'm happy to take my chances. Totally understand others who want peace of mind.

[eshrager]

Originally Posted by Rosewood99

Good points. However, when I sell a guitar, my terms are if it's damaged I will either pay for the repair (if that's what you want) or you return it and I will repair it and keep it. I don't renegotiate the price.

But I'm wondering how busted it up it can be if it's in a case and packed well. Run over by a forklift, maybe? How many times has that happened ever? I guess I'm just betting the odds are in my favor. But I understand that many will feel differently.

Yes, you may get enough money to repair it - but the value of the guitar is now less than when you shipped it. If you decide to sell it after it is repaired you probably will be out a significant amount of money (in insurance terms 'diminished value') compared to what it would have sold for if the guitar hadn't been damaged.

[Rosewood99]

Originally Posted by eshrager

Yes, you may get enough money to repair it - but the value of the guitar is now less than when you shipped it. If you decide to sell it after it is repaired you probably will be out a significant amount of money (in insurance terms 'diminished value') compared to what it would have sold for if the guitar hadn't been damaged.

Again, my thought process is the chances of it sustaining any major damage that will diminish it significantly would be rare. I guess it all comes down to how risk-averse you are. I’m happy to take the risk that it would still be playable after repair and not worry about a partial loss of value. It’s not like it’s suddenly going to be worth nothing.

[rllink]

I have never sold a guitar privately or bought one privately so I'm just talking off the top of my head, but there seems to me a lot more factors involved than just repairing it. From a buyers stand point, if I buy a guitar that is represented as in great condition, or mint condition, or whatever condition other than been repaired condition, I don't want to take a repaired guitar. I want a guitar in the same condition as what I paid for. So as the seller, how do you deal with that? Do you tell them that in good faith you have a highly respected luthier who going to repair it and then give the buyer a partial refund for a damaged and repaired guitar? Because as soon as it is damaged and repaired value is significantly less. I don't care how respected the luthier is, he can't change the fact that it has been damaged and repaired. Or are you going to give the buyer a full refund, get it back and then try to sell a repaired guitar when you get it fixed? Again, you've lost some value there. And that is assuming it didn't get damaged beyond repair.

These are just the thoughts going through my head. How much do you save in premiums by under insuring it? Do you save enough to cover the loss in value if something happens to it? I think that I would want to wash my hands of it once it went out the door if I could.

[Rosewood99]

Originally Posted by rllink

I have never sold a guitar privately or bought one privately so I'm just talking off the top of my head, but there seems to me a lot more factors involved than just repairing it. From a buyers stand point, if I buy a guitar that is represented as in great condition, or mint condition, or whatever condition other than been repaired condition, I don't want to take a repaired guitar. I want a guitar in the same condition as what I paid for. So as the seller, how do you deal with that? Do you tell them that in good faith you have a highly respected luthier who going to repair it and then give the buyer a partial refund for a damaged and repaired guitar? Because as soon as it is damaged and repaired value is significantly less. I don't care how respected the luthier is, he can't change the fact that it has been damaged and repaired. Or are you going to give the buyer a full refund, get it back and then try to sell a repaired guitar when you get it fixed? Again, you've lost some value there. And that is assuming it didn't get damaged beyond repair.

These are just the thoughts going through my head. How much do you save in premiums by under insuring it? I think that I would want to wash my hands of it once it went out the door if I could.

I think I already addressed that in an earlier post. I let the seller decide if he wants to take the repair, or send it back for a full refund. Fortunately for me, in 12 years of selling I’ve never had a guitar damaged.

[rllink]

Originally Posted by Rosewood99

I think I already addressed that in an earlier post. I let the seller decide if he wants to take the repair, or send it back for a full refund. Fortunately for me, in 12 years of selling I’ve never had a guitar damaged.

Well it appears then you've thought it through and made up your mind before you even asked the question. Go for it.

[Rosewood99]

Originally Posted by rllink

Well it appears then you've thought it through and made up your mind before you even asked the question. Go for it.

I didn't at first, but the more I read the posts, the more I convinced myself.

[seannx]

Originally Posted by Rosewood99

Again, my thought process is the chances of it sustaining any major damage that will diminish it significantly would be rare. I guess it all comes down to how risk-averse you are. I’m happy to take the risk that it would still be playable after repair and not worry about a partial loss of value. It’s not like it’s suddenly going to be worth nothing.

Packages get lost. Sometimes even with signature required they are left if no one is there, and stolen. In that case you will be out the whole value of the guitar, and your reducing the shipping cost strategy won’t seem like such a good idea. In addition, we’ve had numerous posts here about how hard it is to get damage covered anyway.

[Rosewood99]

Originally Posted by seannx

Packages get lost. Sometimes even with signature required they are left if no one is there, and stolen. In that case you will be out the whole value of the guitar, and your reducing the shipping cost strategy won’t seem like such a good idea. In addition, we’ve had numerous posts here about how hard it is to get damage covered anyway.

As I said, it all comes down to how much you are averse to risk. You might think the chances of that happening are great so you get full insurance and others might think the chances are so small it’s not worth getting full coverage.

[Pura Vida]

Originally Posted by Rosewood99

Heritage is good for protection from theft, fire, etc but my post is specifically for those of us that aren't using long-term insurance. I'm strictly talking about insurance when you sell a guitar and have to ship it.

My point is you probably don't need to tell UPS of fedex (this isn't about whether they will dispute the claim, for the sake of argument, let's say they will) but rather if it makes sense to just pay for amount that would cover 99% of potential repairs, rather than replacement of the guitar. The logic being the chances of a complete totaling of the guitar are practically nil.

Right. It seems like there are two discussions happening within this thread, possibly b/c of the thread title.

To the point, though, this is precisely why I have only sold guitars locally... b/c I don't think it matters much what value you insure, if the carrier is not going to stand behind the insurance. The only benefit I see is if the guitar is stolen or lost, in which case, I'd want a full replacement value. One of the reasons I added Heritage was to mitigate against that gap, as I can ship with their full protection.

[Misifus]

In 1978, I had a guitar stolen from my house. It was a 1957 Martin D-18. I’m sure glad I had it insured for replacement value.

[UncleJesse]

edit - I misunderstood the question about this being short-term shipping insurance value but figured I'd leave this here anyway for people who have Heritage or are thinking about it.


So I sort of have experience with this. I bought a D18. So I went ahead and insured it for full replacement value which is 2499. The guitar got damaged in transit and Traveller's (Heritage) wanted the guitar appraised or assessed by repair guy to see what the diminished value was. My repair guy wasn't confident in judging diminished value so I had to send photos to Gruhn's.

Gruhn's assessed the guitar's value pre-damage at $2000 and the damage caused the guitar to lose $500 and as a result it was only worth $1500 now. It made no difference that I had insured it for 2499, the insurance company was basing it completely off those appraised figures and NOT my replacement cost or agreed value, so I got a check for $500 not $1000. If I had decided to insure it in the first place at $1500 I would have gotten nothing.

So there's definitely a fine line between increased premiums or being underinsured. I like to illustrate this point because most people haven't done this. You can shoot for the moon with values all you want but when the rubber meets the road at claim time, you're at the mercy of your repair person or appraisal person. If you'd used an "agreed value" of $5000 for a guitar but then when you go to file a claim the appraiser says it's really only worth $2500 in excellent condition, the insurance company isn't going to pay you that extra $2500 you think the guitar is worth, even if Heritage had agreed on that value when you insured it.

[DavidE]

As long as you're willing to risk a total loss and eating the $3,500, do you want you want. You're going to have to pay the $4k back to the buyer and then have to fight the shipper to get them to pay off on their insurance.

[DavidE]

Originally Posted by UncleJesse

edit - I misunderstood the question about this being short-term shipping insurance value but figured I'd leave this here anyway for people who have Heritage or are thinking about it.


So I sort of have experience with this. I bought a D18. So I went ahead and insured it for full replacement value which is 2499. The guitar got damaged in transit and Traveller's (Heritage) wanted the guitar appraised or assessed by repair guy to see what the diminished value was. My repair guy wasn't confident in judging diminished value so I had to send photos to Gruhn's.

Gruhn's assessed the guitar's value pre-damage at $2000 and the damage caused the guitar to lose $500 and as a result it was only worth $1500 now. It made no difference that I had insured it for 2499, the insurance company was basing it completely off those appraised figures and NOT my replacement cost or agreed value, so I got a check for $500 not $1000. If I had decided to insure it in the first place at $1500 I would have gotten nothing.

So there's definitely a fine line between increased premiums or being underinsured. I like to illustrate this point because most people haven't done this. You can shoot for the moon with values all you want but when the rubber meets the road at claim time, you're at the mercy of your repair person or appraisal person. If you'd used an "agreed value" of $5000 for a guitar but then when you go to file a claim the appraiser says it's really only worth $2500 in excellent condition, the insurance company isn't going to pay you that extra $2500 you think the guitar is worth, even if Heritage had agreed on that value when you insured it.

You should have received the $500 in diminution of value plus the cost of repair. Travelers owes you money. Seriously, go back to them.

[Jim Comeaux]

Firstly, just what is insurance? It is a system of risk spreading. If one partially insures something and there is a loss that is greater than the amount that it was insured for, then I guess that you are out of luck. The question to be answered is: How much risk is the person paying for the insurance willing to take?