Instrument insurance: What is my gear worth in the event of a claim?
Musical instruments - Agreed Value vs. Replacement Cost
I have insurance for my musical instruments and gear. A common question: How will these items be valued if I have a claim?
The instrument policy provides coverage on a replacement cost basis. Replacement Cost provides for the cost to repair or replace the damaged property without deduction for depreciation.
The insurer will pay the smallest of the following:
- The amount you actually spend on repairing the damage.
- The amount it would cost to replace the lost or damaged property at the time of loss with new property of similar kind and quality to be used for the same purpose.
- The limit of coverage purchased for the property on your policy.
- Payment for repair or replacement will not be paid until the property has actually been repaired or replaced.
If you have vintage or one-of-a-kind equipment, coverage can be provided on an Agreed Value, which would be the amount the item has been appraised for by a reputable appraisal company. In order to obtain coverage on this basis, please contact our office to obtain coverage and provide your appraisals. A new appraisal would be required every 5 years.
If your instrument is 5 years old or older and you do not have an appraisal, your instruments will be valued at actual cash value. This is the amount equal to the replacement cost minus depreciation of damaged or stolen property at the time of the loss. This means that in the event of the loss, your settlement will be based on the smallest of the following amounts:
- The actual cash value of the lost or damaged property at the time of loss.
- The amount it would cost to repair or replace the property with similar kind or quality.
- The limit of coverage that applies to the property.
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