With good insurance coverage, a damaged instrument will be repaired by the artist of your choice or replaced at minimal cost, and additionally you will be compensated for any loss of value after repairs are completed. You will need a current insurance appraisal, which most instrument dealers will provide free at the time of purchase. Keep the original with your purchase receipt and send a copy to your insurance broker.
Ascertain that the insurance company issuing the policy (the “carrier”) will issue an unconditional payment for any loss. Make sure they will not dictate who will do the repair, nor supply you with a replacement instrument of their choice. Be sure you understand the Exclusions of Coverage that can void your protection, i.e. theft from an automobile or weather damage.
We recommend that you insure your instruments with a musical instrument specialist. If you are a professional, the coverage is tax deductible. Many policies have a minimum coverage limit of approximately $10,000 so if you have a collection of instruments of moderate value they may all be covered under one policy at no extra cost.
Homeowner’s policies have low premiums but big problems. Some of the problems include:
- A homeowner’s policy almost never approves professional use of an instrument and you will void the terms and coverage of the policy if you ever play for money, no matter how little.
- The value of the insured instruments may be determined at the time of loss or damage. Even though an appraisal was required at the initiation of the coverage, the insurer may force the settlement into arbitration or litigation. “Agreed Value Coverage”, guarantees the amount the insured will be paid in case of loss but is rarely part of a homeowner’s policy.
- Homeowner’s insurance companies generally have a limited knowledge of musical instrument values, devaluation, repair costs, etc. A lack of this type of knowledge can slow down resolving claims quickly and easily.
- Many homeowners’ insurance companies don’t accept musical instruments of high value.
- There is nothing specific about devaluation caused by breakage in the homeowner’s form.
Devaluation insurance compensates for loss of value in the case of severe damage. Instruments and bows of high value are particularly susceptible to such loss and the failure to have devaluation coverage on your policy can be devastating. Imagine a violin insured for $200,000 damaged in an accident. The restoration cost was $30,000 and the instrument value was diminished by $90,000. The total payment was $120,000 as the instrument could no longer command the same price as before. Now imagine a bow valued at $30,000 suffering an accident in which the head is broken off. The orchestra that provided the musician’s insurance was a policy with no devaluation clause. The insurance company would offer $400.00 to repair the bow, but would not pay over $25,000 in devaluation.
Many policies not specific to musical instruments do not have a devaluation clause, and therefore do not provide such coverage. Many insurance adjusters are not comfortable with the concept of devaluation, so this should be clearly spelled out in the policy. If you have any questions about the coverage on your instrument, contact your agent.