TM reader David writes: “Today I was switching homeowner’s insurance and wanted to ensure that my workshop and its tools–worth an estimated $175,000–were properly insured. While the insurance agent was completely sure that they were covered, I asked for a copy of the actual policy. After reading it through, I discovered that instead of the promised $100 per tool, it was actually $1,000 for ALL THE TOOLS should they be stolen. I wonder how many other Toolmongers think they’re covered only to find out when they run into an event that they don’t have the coverage they expect?”
That’s a great point, and totally made me dive for my own policy to take a look. Here’s the skinny: Most policies set limits on some specifically valuable material, like jewelry, furs, silverware, and so on. This isn’t necessarily designed to screw you if you have items worth more than the limit, but rather to allow the insurance company to set the price for your policy. They’ll increase those limits, but the cost of your coverage will increase as well. I’m guessing that, for example, if you have a home worth $400,000 and wish to add $175,000 in specific coverage for the stuff in your garage shop, you’re going to pay a pretty significant premium.
My first experience with this was with computer equipment. Thankfully, unlike David’s agent, who sounds a bit shady, mine was up-front with all of this. Knowing that I have goings-on in my life involving technical gear (like Toolmonger), he asked specifically about my equipment. I have far more than the standard $2,000 limit, so we bumped it to $10,000, which ended up costing me very little. Going back and looking, though, I don’t have an extension for tools–of which I own quite a few. I’m going to schedule time this next week to give my agent a call to discuss upping my coverage.
How about you? Do you have extensions in place on your homeowner’s insurance to cover your tools?