Seeking insurance advice for home shop.

[David King]

I haven't had to deal with this question in quite a while but I recently got a big increase in my homeowners policy premium and figured it was a good time to look around. What I'm finding out is that not many companies want to have anything to do with a home workshop that's used for business.

There are lots of different kinds of insurance of course and I'm trying to figure out what's indispensable vs what I can forego.
The main things are liability insurance, if you have anyone over to your shop who falls down your front steps, and product liability if a bridge come unglued and hits them in the forehead.
It looks like I can cover those for between $375-$650 depending on the amount of coverage through Liberty mutual. They can't cover the house because it was built before 1920.

State Farm won't cover any house that has a commercial manufacturing operation on the property.
No regular insurance company will write a policy on a house that has moss on the roof or loose paint on the exterior. You can get a substandard policy but it costs about 2x more.

Heritage will cover the shop and instruments for just under $1000.

I was hoping to get coverage for under $2000 a year but it doesn't seem like that's possible anymore. I'm curious what other's experience has been.

[Bob Gramann]

I have all of my insurance with Erie. A guitar repair business would be covered as an allowed home-based business under my homeowners, but guitar making is not. To keep my homeowner's policy I had to get a business liability policy. They sold me a business liability policy (with a deductible) for about $275/year covering up to $100k liability. I don't expect that it will ever do anything but allow me to keep my homeowner's insurance--I don't see a lot of risk here. I also bought a policy from them to cover my instruments, both the ones I build and the ones I perform with, and tools against damage and theft. It has a deductible, but it is a lot easier to administer than the policies that I had with the music insurance companies who required that I keep my inventory up to date with them--the staff at each (Musicpro and Clarion) kept changing and I kept having trouble informing them of my sales and additions.

When my homeowners came up for renewal a couple of years ago at a very high price, I called the agent. He was able to write a new policy (with the same company--Erie) for much, much less--I was on an archaic policy--the new one with better features was cheaper. I have been with Erie for over 40 years. I have found them economical and very easy to work with. If they do business in your area, I recommend that you call them.

They have never asked me about moss or inspected my paint. If that's a problem, put some zinc strips on your roof and touch up your paint.

[David King]

Thanks Bob,

It turned out my house was WAY over insured. I'm not sure how that happened but it wasn't my doing. All I know is that a 1200' house shouldn't cost $466,000 to replace. Fixing that dropped the premium down to just under a thousand. My current insurer, Kemper, is the perhaps only company that will allow me to build guitars in the basement as a business in a pre-1920 house.
Now if I could just keep the squirrels out of the attic and fasten the sills to the foundation I'd be in better shape.

[Bob Gramann]

Rat wire (aka hardware cloth), that wire cloth with the quarter-inch grid, works pretty well for the squirrels. I've found that only metal works. Tying the sills is a whole 'nuther problem. Don't you wish you'd done that when you built it? I passed on buying a house built in the 1800's once. The retrofit knob and tube wiring didn't scare me but the brick foundation had been made with mortar that apparently didn't contain any Portland cement. We had a 5.7 earthquake here a few years ago. I wonder how that house made out.

[David King]

Bob thanks for the advice. I nailed up aluminum flashing but the squirrel just chewed a new hole through 3 layers of cedar shingles and 1" of fir sheathing. They seem to stop at nothing when they have a mind to do something. The 3 layers of lead paint and a thick coat of capsicum paste must have been like frosting. The solution is to cut down every nut tree in the neighborhood of which there are dozens, all planted by squirrels.

[David Bingham]

David,
I can tell you how that happened because I ran into the same thing. It's common practice for a lot of insurance companies to assume that your house will increase in value and put in an automatic increase every so often. Since most people just pay the bill every year without looking at the details, it creeps up over time with the person being oblivious to it. It increases the insurance company's take and if you happen to catch it then they claim that they were doing you a favor by looking out for your interests.

[David King]

I think that's part of it but my house creeped up from 1200 square feet to 2600 square feet. Perhaps that's a first?