Insurance Q

[drachillix]

I had my vehicle broken into last night and a few things stolen, namely my laptop and two toolbags. I am an onsite tech by trade, I own all my own tools.

Now, while I was on the phone with my insurance company they made a big point out of asking if any given item was for personal or business use. I understand that they would want to know if my employer provided those tools/missing items, but why do they care otherwise?

[Leaffan]

Because if they belonged to your place of business then they could claim the items through their insurance.

[drachillix]

@Leaffan

Because if they belonged to your place of business then they could claim the items through their insurance.

OK, I get that, ownership of the items has been established. Why would it matter if it was work or personal if the items in question are owned by me and stolen from my personal vehicle.

[Gfactor]

A lot of policies exclude property used for business, at least unless you buy a rider or a special policy.

Most homeowner policies provide that coverage does not apply to animals, birds, fish, automobiles and business property

http://www.naic.org/consumer_homeowners_faqs.htm

[x-ray_vision]

@Gfactor

A lot of policies exclude property used for business, at least unless you buy a rider or a special policy.

Most homeowner policies provide that coverage does not apply to animals, birds, fish, automobiles and business property

Oops! Sorry, we can't find what you're looking for | NAIC

‘Property used for business’ and ‘business property’ aren’t the same thing. drachillix’s tools aren’t the property of his or any business. I think the wording used by the insurance company rep may have been purposely misleading.

Make sure you explain that your job doesn’t pay for your tools and that they are your personal property. I’m fairly certain you will be covered.

[Gfactor]

IIRC, drachillix is self-employed, and uses the laptop and tools as a part of his business. That may or may not exclude coverage. It will depend not on the snippet taken from a FAQ (which was offered as an explanation), but instead on the language of the policy and the cases in his state interpreting the language.

Also, I could be way off because I’m not sure which insurer he called or whether he has other coverage that might apply.

[MyglassISfull]

@Gfactor

A lot of policies exclude property used for business, at least unless you buy a rider or a special policy.

My brother had tools stolen from his own business van (he’s self-employed), but the policy didn’t cover tools used for business purposes. He wasn’t aware this was the case and had to buy over £5000 of new tools, plus get the van fitted with extra security so the insurance company would cover his business-use tools (at an inflated premium).

[Gfactor]

Here’s an article that discusses some cases on the business property exclusion: http://www.irmi.com/expert/Articles/2006/Olson06.aspx

In Mack v. Nationwide Mut. Fire Ins. Co., 2005 Ohio App. LEXIS 2591 (June 3, 2005), the court upheld the business property exclusion. In this case, the insured’s musical equipment valued at nearly $27,000 and used to perform for money, was stolen. The insurer offered to pay only $500, the limit for business personal property under the applicable homeowners policy. The insured then filed suit contending that his musical interests were more related to a hobby in that he used them more for pleasure than any business activity. He further argued that the business property exclusion was ambiguous because “business property” was not defined in the policy. The Ohio appellate court disagreed, finding that he did receive remuneration of cash or musical instruments in exchange for his musical services. The court also stipulated that the “mere absence of a definition in an insurance contract does not make the meaning of the term ambiguous.” It applied the plain and ordinary meaning to the phrase “business property.”

[drachillix]

@Gfactor

IIRC, drachillix is self-employed, and uses the laptop and tools as a part of his business. That may or may not exclude coverage. It will depend not on the snippet taken from a FAQ (which was offered as an explanation), but instead on the language of the policy and the cases in his state interpreting the language.

Also, I could be way off because I’m not sure which insurer he called or whether he has other coverage that might apply.

Yes I am self employed, my insurance agent also knows that.

The adjuster who called me made a point out of telling me I needed to make a list and specify which items were work related and which were personal. I made it clear that like many repair type trades that I pay for my own tools and that they are not paid for by an employer.

If they are looking to dodge coverage for my tools via a “business use” exception I am basically out of business because of a vehicle break-in that I thought I would be insured against.

[Gfactor]

It’s only a theory. I hope they don’t mess with you.

[drachillix]

@Gfactor

It’s only a theory. I hope they don’t mess with you.

Me too, I have a couple customers who also happen to be agents of the same company. I’m gonna bounce this off of one of them too.

[Freddy_the_Pig]

The standard HO-3 homeowner’s policy limits coverage for property used primarily for business purposes to $500 for property away from the residence (in other words, in a car) or $2,500 for property in the home. Homeowners insurance rates are based on losses incurred by ordinary home owners who don’t transport expensive work equipment in their car or van on a daily basis. Business owners who do so incur higher losses and should protect themselves with one form or another of Business Owners Policy.