. . . and Old-Iron Insurance

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SmokStak, By Harry Matthews

I recently spoke to my insurance agent concerning insurance on my engines and tractors, and - as I understand it - if you think your homeowners insurance will cover them, you're probably wrong. My agent said since they're antiques and can't be easily replaced, they're not insured under my homeowner's policy. In order to protect them, she must secure a policy with an underwriter who specializes in heirlooms, wine collections and other irreplaceable personal keepsakes.

I got to thinking about this is not so much from the standpoint of fire or theft, but what happens if I'm in a traffic accident and lose or severely damage an engine or tractor?

A few years ago, a guy lost his beautiful Rumely 30-60E Heavyweight when the tractor slid off the hauler's trailer. Almost every casting on the tractor was broken or cracked, and insurance didn't cover anything. A hired hauler must have special insurance added to his policy since normal cargo insurance won't cover antique equipment. It would be a good idea to check your club's haulers' insurance because most insurance policies state that antique equipment will not be covered. What have others done to protect their collection against a worst-case scenario, or do you all not worry about it? - Mark

That type of coverage is called 'inland marine' and costs a fortune! Half the insured value of your homeowner's policy will cover the contents. Raise the insurance on your house or out buildings as high as your agent will allow and take pictures so you have proof of your collection. - Craig

As far as my steam engines and tractors go, I have the high-value ones listed at only partial value on my farm policy. Anything of much value has to be listed on the policy. As far as gas engines go, I don't have much insurance on them. After all, if you insure all this stuff at full value, it'll cost a small fortune.

All insurance companies are in business to make money, it's just a matter of your personal risk and how much of it you are willing to take. We've probably stumbled onto the reason many nice items aren't seen at shows any more. -Ken

I have an extra policy on my homeowner's insurance for theft and fire in the engine shed. My policy probably won't pay me more than $20,000. It's the same for antiques and ancient art objects in the house: I have to pay extra for it, and the insurance company wants pictures and specifications for each piece.

For engine shows, I have insurance for $2,500,000 in case my engines cause a problem (for example, a flywheel could fly into the crowd), but when someone tries to stop a flywheel by hand on a running engine, that's their own responsibility.

My agent insures my tractor and engine collection at whatever dollar price I set. 1 insure them for whatever is the going value, and right now I'm carrying over $20,000 in insurance on my toys. That way if something catastrophic happens with traffic, fire or storm - since I live in a tornado alley - I'll at least have some money to buy something to replace them. - Rodney

Insurance is a lot like cell phone packages. A company may offer lower rates, but when you read all that small print, paying their so-called lower rates will most likely cost you more in the long run.

My wife is an underwriter for a well-known insurance company. We have our personal insurance through that company, but I haven't purchased any 'special' policy to cover my engine collection because my engines are covered through my homeowner's policy. Even though I rent storage for them away from my home, they're still covered as 'personal belongings' under my policy. It doesn't matter if they're considered antiques or hard-to-replace possessions.

You can - in most cases - set a coverage amount for your personal belongings. I believe it's referred to as a 'stated amount.' Sure, it'll cost a little bit extra, but it really isn't too bad. I recommend you contact your insurance company (not your agent) to find out what will and will not be covered. Of course, take a look at your policy first to see if you can decipher it for yourself.

In most cases, insurance agents don't really know as much as you think they do. If they can convince you to buy extra insurance you don't really need, it's more money in their pocket. Every company has different 'rules' for policies, so take a good look at the policy you have. You might be shocked at what you are and what you are not covered for. - Ironman

Ironman is 100 percent on the money. Agents love to sell 'inland marine' coverage. Read your homeowners policy! Most states require plain language, so policies are a lot more readable than ever before. Never accept the first answer from a carrier unless you're completely satisfied with the answer. Your agent doesn't work for you, and he'll sacrifice you in a heartbeat to protect his relationship with a carrier -that's where his income comes from. Any agent who tells you the only way he can cover you is with 'inland marine' has just told you that you need a new agent.

Here's quick test to determine how good an agent is: Ask who re-insures the policy that you're about to purchase. A competent agent can answer the question, and the correct answer will be another insurance company. Any agent who cannot answer that question is wasting your time, and probably not selling you the correct product.

I have bought insurance, worked for insurance carriers and investigative agencies that de-license insurance agents - as well as investigated insurance fraud. I'm probably a lot more knowledgeable about insurance than the average person and well aware that under New York state law an individual can defraud a carrier, but a carrier cannot defraud an individual. - Franz

Let's say you have a $100,000 homeowner's policy. The policy automatically covers 'contents' for half the policy's face value unless you also have very expensive 'replacement value' coverage. In the event of a total loss, you'll get $50,000 to refurnish either your house or your shed. The insurer won't care if you buy plasma TVs or engines.

To them, contents are contents, which is why I said earlier to raise the insurance on your house as high as your agent will allow. In the long run it's still the cheapest way to protect your stuff.

Don't underestimate what your auto policy will cover, either. Auto policies cover many things you wouldn't even think of! - Craig

I go for the company that will insure the whole ball game. Home owners, auto, property liability -everything. I also do the same for the business. If my car gets into trouble on my property, who pays? Let the insurance company decide. If an employee gets hurt driving my truck, who pays? Workman's comp or auto insurance? Let them decide. - Al

Insurance is always a hot topic on the SmokStak. We presently have over 300 posts with the word 'insurance' in them. Evaluate your own cautions, cares and concerns, and see your agent if something doesn't add up. - Harry 

SmokStak (www.enginads.com/ smokstak.cgi) is an engine conversation bulletin board with over 50,000 messages on file and is part of the Old Engine series of Web sites that started in 1995 as 'Harry's Old Engine.' Harry Matthews is a retired electronic engineer and gas engine collector from Oswego, N.Y., now residing in Sarasota, Fla.