Insurance Newsletter - Shipping a guitar

Posted: Tue May 05, 2009 3:31 pm

I just received this first edition newsletter from my Insurance carrier. I thought it was pretty interesting and figured that I would share Cool

Welcome to the first edition of our newsletter! As a valued client of Heritage Musical Instrument Insurance, you will be receiving this newsletter that will keep you informed of news within our industry, as well as stories and tips from real life experiences we have encountered throughout the years. Please enjoy it, forward to anyone you think may be interested, and of course, we welcome any feedback that you may have to offer.
SHIPPING AN INSTRUMENT?

Read here first…

We estimate that over 50% of the losses paid by Heritage are the result of the shipping process. Instruments, especially wooden ones, are intrinsically delicate. When an instrument is shipped, it enters a battle zone, and casualties are much greater than when it is being played or walked down main street under the owner’s arm. Regardless of which carrier is used to transport the instruments, the loss frequency, type of loss and severity remains constant. One carrier is as good or as bad as another, depending on how you look at it.

Here are some suggestions to improve the situation:

(1) Do not depend on the insurance offered by the shipping company. The shipping companies attempt to avoid responsibility for damages which occur during shipment, and few losses result in a fair settlement. If you examine the policy manuals and contracts of the shipping carriers, and certain legal statutes, you will understand how they avoid liability so well. If you are shipping an instrument, or have purchased one being shipped to you, make certain that functional shipment insurance is in place, written by a specialist to the musical instrument trade, but not the shipping company. Make certain it will cover not only cost of repair, but devaluation of the instrument. If your shipment is international, make certain that the coverage is broad enough to cover it. Many policies are limited to the US and Canada . Do not depend on another person or entity to insure your instrument in shipment unless you are satisfied with quality of their insurance.

(2) Packing, packing, and more packing. While non-delivery and disappearance of a shipped package occasionally occurs, the primary loss caused during shipment is damage to the instrument. Improper or inadequate packing is the cause of many, if not most, of the losses we see. If the instrument is entering a war zone (being shipped), then it needs special protection to survive.

3) Use Expedited or overnight shipment, but not ground shipment. Expedited or overnight shipments produce significantly less loss activity than ground shipment. Packages should always be sent using the shortest delivery time available, and they should not be shipped on a Friday, or in such a way as to be warehoused over the weekend.

(4) Control Delivery and Shipment – Arrangements should be made so that the package is received personally by the recipient, or their agent, and that they will be available at time of delivery. Require that the package be signed for by the recipient. Mark your address and the recipients on the carton directly, as well as on the shipping slip.

(5) Documentation of Shipment – Retain copies of shipment receipts and sales receipts (if any). Take digital photos of the instrument prior to shipment to show condition and/or authenticity.

Posted: Tue May 05, 2009 3:35 pm

mods,please sticky this thread. thank you.

thanks chuck.

Joined: 06 Dec 2003 Posts: 994 Location: The Office

EDIT: Somethings wrong with BraveDave. Wink

Joined: 13 Feb 2004 Posts: 5603 Location: phoenix az.

i got a hint from the ups store by my house!!they told me to let them pack it for an extra 30 bucks.then if it gets damaged it will be covered no matter what cause they packed it.ive had a few guitars damaged over the years being shipped and claiming the insurence was timely and rough.but since ive been paying them to pack it not one guitar ive shipped has been damaged.customers on ebay do whine when i ask for 70 bucks for shipping but i ask them do u want ur guitar undamaged and no worries for 70??or do u want to take the chance of having to go through the insurence claim for 40??they do try everything to get out of paying i know this first hand!!! my claims took between 30 and 60 days and usually by then the customer trys to get paypal to suck the money out of ur account cause they r allready mad they got a broken guitar.see when u file a claim the customer has to take the guitar to the shipper with the packaging so they can determine if it was packed properly,then to a repair guy for an estiment,then the estiment back to the shipper,then the shipper sends a guy to the customer to see the damage to decide wheather to replace or fix it,then they try to give u as little as possible.i musta made 20 phone calls argueing with ups to get it through major headache every time!!thank god i had packed the guitars well or they would have strait up denied me!~! Rolling Eyes

Posted: Thu May 21, 2009 11:28 am

I've been doing the exact same thing, Rob! I let UPS do the packing. If anything happens, they pay the piper.

I just had a guitar shipped to me from Tenn. to NJ (Thanks Chris!). It was packed and shipped via UPS. The box looked BRAND NEW when it arrived at my office. Looks like they packed it and drove it here in a limo!

They definitely treat their own packed packages with extreme care.

Posted: Wed Jul 22, 2009 11:03 pm

Thanks for the UPS tip... I'm looking to sell a guitar on ebay, so I'm definitely gonna get them to pack it!

Posted: Tue Jul 28, 2009 2:19 pm

Some additional insurance info:

Use of Homeowner Policies to Insure Musical Instruments

We often get asked to explain why someone should insure their personal instruments/equipment with us, versus placing them on a schedule on a homeowner policy. Homeowner policies vary from company to company, and from policy form to policy form. Generally speaking, the most common homeowner policy is the “HO-3” policy form, which can have a special endorsement (the “HO-61” endorsement) attached to the policy at the client’s request. This endorsement covers “Scheduled Personal Property”, and is copy written by the Insurance Services Office, who then provides the insurers with the endorsement form. The most common and practical use of this endorsement is to cover valuables such as jewelry or fine arts. Even if an insurer uses their own forms and definitions for scheduled personal property, the intent shadows the HO-3 and HO-61 forms.

The basic problems with using this endorsement to insure musical instruments and equipment are as follows:

A.) “You agree not to perform with these instruments for pay unless specifically provided for under this policy.” So reads the HO-61 endorsement. Seldom, if ever, will a homeowner carrier approve professional use of an instrument. Therefore, if you play for any remuneration at all, you have voided the terms and coverage of the policy contract.

The professional is best covered under a Heritage Musical Instrument Policy, as it is designed to cover those who earn money from the playing of their instruments.

B.) The value of the property (instruments/equipment) insured is not agreed upon, but will be ascertained ay the time of loss or damage. Even though an appra isal was requested at the placement of the coverage, the carrier may still deviate from that figure. The insurer may disagree with the insured as to the value and push the settlement into arbitration or litigation.

With an appraisal, Heritage policies provide agreed value coverage, which guarantees the amount the insured will be paid for the loss.

C.) There is nothing specific with regard to devaluation caused by breakage in the homeowner form. Claims representatives may agree or disagree on this point. Policies are quiet on this issue.

Heritage policies specifically include devaluation.

D.) Agents and employees of homeowner insurance companies generally have a very limited knowledge of musical instruments; that is, their value, devaluation, repair costs, etc. This type of knowledge can be of immense help win solving coverage and claims problems quickly.

Heritage Insurance Services maintains communication with literally hundreds of resource people in the various music trades, and uses a professional consultant to coordinate claims and valuations.

E.) Many homeowner carriers will not accept high valued musical instruments on their policies. Some companies may refuse all musical instruments and equipment.

Heritage Musical Instrument Insurance insures instruments from the low four figures to the high seven figures. Large or small values are not a problem.

--------------------------------------------------------------------------------

F.A.Q.

If I loan or give custody of my instrument to an individual or business entity, is it covered should a loss occur?

The answer is both yes and no, depending upon some variables.

The Heritage policy designed for collectors and players will cover such entrustment on a worldwide basis, subject to the same terms and conditions that apply to the owner. So, in this case, the answer is yes.

If your policy is written by another carrier other than Heritage, you must read your policy carefully and ask the agent to define the extent of coverage. There are significant limitations placed on this exposure and it takes a trained eye to ferret them out. For instance, policies may exclude coverage while being worked upon by a repair shop, and limit the provision of coverage for mysterious disappearance or failure to return instruments. Dishonesty of entrustment can be excluded as well. So, the answer may be no, depending on your policy and the circumstances.

Beyond the issue of coverage, there is another possible consequence that should be mentioned. The word is “subrogation” and the person who takes possession of the instrument needs to understand what this means. If you relinquish custody of your instrument, you are insured and you will be paid should a loss occur, as your policy may apply to such. However, the person taking custody of the instrument is not an insured under your policy, and there is nothing to prevent your insurer from seeking restitution from that individual or entity if they discern negligence, or if they have signed a contract agreeing to be responsible for the instrument.

Someone taking custody of a non-owned instrument can avoid the subrogation process in a couple of ways:

1- If permitted by the insurer, have their name/names added to the owner’s policy for the period of the loan. (Heritage usually allows this action)

2- Add the instrument to your own policy or take out insurance on the instrument and have the owner added as a “loss payee.”

3- Have the owner waive the subrogatory interest of their carrier in writing prior to taking possession of the instrument. (Be careful; not all policies allow their policy holders to do this, so check with your agent before executing.) Heritage policies allow their insured’s to waive subrogation in writing prior to a loss occurring.

Does this really happen?

A player borrowed a bow and accidentally left it in a taxi cab and could not recover the bow. The insurer paid the loss to the owner, and turned to the player for restitution. The player wanted nothing to do with this action or responsibility, until they stepped off stage after a concert and received service of a lawsuit. The loss was substantially settled by the player without further litigation.

Joined: 28 Jan 2009 Posts: 6298 Location: Jacksonville, TX.

So where do we get this insurance from?
Nightrain Cool

Joined: 18 Sep 2004 Posts: 2230 Location: Stockholm, Sweden

I really cant take this UPS deal seriosly even though i see how it can be conveniant.

To me it seems like:

"Pay us 30$ extra or the guitar may get smashed".

Kinda like:

"If you dont pay us your store/restaurant may burn down some day, would that be unfortunate ?" .

I cant help thinking they take good care of the ones they pack themselves and play football with the others.

Posted: Tue Jul 28, 2009 9:56 pm

Neonknight wrote:

I really cant take this UPS deal seriosly even though i see how it can be conveniant.

To me it seems like:

"Pay us 30$ extra or the guitar may get smashed".

Kinda like:

"If you dont pay us your store/restaurant may burn down some day, would that be unfortunate ?" .

I cant help thinking they take good care of the ones they pack themselves and play football with the others.

Then take a good note of their shipping requirements to honor their insurance. This is a box inside a box with 2" of padding all the way around. Video and photograph your packjob, and if they damage your goods, then you have what you need to put their balls to the wall.

Joined: 17 Jun 2009 Posts: 596 Location: Poplar Bluff,MO

Neonknight wrote:

"If you dont pay us your store/restaurant may burn down some day, would that be unfortunate ?" .

thats like mafia talk right there Laughing

Joined: 30 Sep 2009 Posts: 1

I have shipped probley over 50 guitars by the USPS and did not add insurance to any of them because of the huge price they charge
for insurance. I did pack them very well and had no probley with
any of them, knock on wood. Chuck
www.texasguitartradingpost.com

Joined: 18 Dec 2003 Posts: 2151

What's really funny is that non one single guitar company in the United States ships brand new guitars in a way that is up to UPS standards.

Posted: Fri Nov 20, 2009 2:51 pm

Greg Crowe wrote:

What's really funny is that non one single guitar company in the United States ships brand new guitars in a way that is up to UPS standards.

So True! LOL!

I got a $4,000 PRS sent via UPS where all they did was slide the case into a box. Some basic padding on the bottom and top… that was it!

Now… PRS cases are some of the best I've seen… but c'mon!

Posted: Sat Nov 21, 2009 8:01 pm

I have all my guitars shipped by carnies and delivered by bearded ladies.

It takes a few months for the circus to get to your town, but there are no damage issues.
and the bearded ladies scare away any watch dogs that stop the dropping off of guitars at the back door.

Joined: 24 Dec 2007 Posts: 3359

I won a Dean acoustic off Ebay for $42 (YES, 42 BUCKS!!!) and when it arrived, the headstock had a small chip of wood missing. I filed a claim online with UPS and without inspection, they paid the cost of the guitar and shipping... So I got a free guitar. $42 was already a steal, this just sweetened the deal even more.

Joined: 24 Oct 2005 Posts: 11990 Location: Louisiana

seeing as i plan on taking just about all my gear to a gig at one point or another... i'm DEFINITELY looking to insure it. i probably have 10-15k worth of gear... maybe higher if you think of it as replacement costs.

Joined: 29 Nov 2003 Posts: 5324

UPS, FedEx, etc.. will not insure an instrument that is "one of a kind" or "Vintage, Over 20 years old"..

go to FedEx/UPS and most shipping sites and read the entire insurance contract..

the only way i think this can be dealt with is coming up with a reusable lightweight shipping box that is returnable..

Posted: Sat Jan 07, 2012 5:41 am

throbgod13 wrote:

UPS, FedEx, etc.. will not insure an instrument that is "one of a kind" or "Vintage, Over 20 years old"..

go to FedEx/UPS and most shipping sites and read the entire insurance contract..

the only way i think this can be dealt with is coming up with a reusable lightweight shipping box that is returnable..

It's called a Lear Lite...............absolutely the best to ship in!!

Joined: 14 Jun 2010 Posts: 370

wstoll wrote:

throbgod13 wrote:

UPS, FedEx, etc.. will not insure an instrument that is "one of a kind" or "Vintage, Over 20 years old"..

go to FedEx/UPS and most shipping sites and read the entire insurance contract..

the only way i think this can be dealt with is coming up with a reusable lightweight shipping box that is returnable..

It's called a Lear Lite...............absolutely the best to ship in!!

Yikes! if this is true I sure hope the custom shop ships their axes in one of these Lear Lites when they send a finished axe to a dealer... I'd sure hate to receive mine damaged then get caught in the "who covers it" game! Didn't realize there were these limitations on shipping insurance!

Joined: 28 Dec 2012 Posts: 4

Retain copies of shipment receipts and sales receipts (if any). Take digital photos of the instrument prior to shipment to show condition and/or authenticity.........

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