I inquired to my homeowners insurance agent about the use of a wood fired furnace in my wood shop. I was told it had to be professionally installed then inspected by their adjuster. It was bought, installed, and called for inspection. Upon inspection the insurance adjuster became more interested in my display of machinery than the furnace itself. Then came the letter that “we” can no longer insure your shop!! I inquired about removing the newly installed wood furnace. Even having spent a fortune in stainless steel flu. But the general senses was that my out building was no ordinary “garage” with all that equiptment. And the insurance company does not want to insure nor has any suggestions on how to insure my shop. Anyone else having trouble insuring their equiptment. I am making minimal income at my, so far, expanding hobby. I tried but cannot afford to heat my sizeable shop by other means. so I would like to keep the furnace! I have dust collection, over head air filteration, a separate sanding and staining booth with adaquate ventilation, and safe storage of chemicals. So excuse my ignorance, but where is the hazard of burning wood in the shop with a UL listed furnace. Any suggestions?? How do I insure my shop? Do I need to inquire about commercial insurance?
Edited 3/4/2005 11:34 am ET by rod
Replies
I asked my agent when I bought my current home if my woodworking tools were covered to which his reply was "only if they are not used as part of a business". He asked me to estimate the value and I just threw out $10,000 figuring that more than covered the tablesaw, dc, planer, routers, and large collection of handplanes. He gave me the usual bit about the deductible, etc etc and that was it. Did you explicitly state you were using these tools to generate income? If so, I could see that as his opening to drop your tools/shop from your homeowners policy and get you to sign up the shop/tools as a business.
Could it have anything to do with state laws and their grip (or lack thereof) on the insurance industry in your state? I live in California by the way.
Kosta
Rod:
I went through this same thing last year. I wanted to insure my shop (in my garage) through my small business (I am in Michigan). My home owners insurance would not cover the business machinery, but he gave me a list of other companies that might. I got the same response from most of them: woodworking was considered a "high risk" business to insure. The ones that would consider it had similar conditions: the entire building (my house) had to be insured as a commercial building; all flammables had to be in an OSHA approved locked fireproof cabinet; a fireproof metal container was needed for rags; firewalls had to separate the shop from living quarters. All of this was also subject to an inspection prior to finalizing the rates. A stand-alone building would make it more cost-effective for me, but not practical in my current location.
You probably need to be looking for an insurer that is more comfortable with your sort of risk.
The sort of insurer that insures homes and private cars is unlikely to be comfortable with anything that is not very ordinary.
They only undertsand ordinary booring peoples homes & cars. If you do "unusual things" at home or have a "modified" car they are not interested.
Have a chat to a commercialo insurer or even better a good broker.
cheers chaps
Hi Rod, don't feel alone, 3 years ago my wife & I restored an old barn on our property where I build custom furniture. After ALOT of work & $ our nice insur co. covered it for 7000.00..... A joke.!!! I have tryed several dif. types of routes,but it comes down to buying food,paying taxes.I guess I will be underinsured for a long time,or out of bussiness, here in Georgia. Later Rickkk
Thanks everyone for your input. It sounds like I am not alone. My shop is a pole and steel type structure 32 x 48. It also doubles as our rec. room, office, music room, ect. Everything I own of value is in the shop. It has a loft where we have music instruments and sound equiptment, computer. At times we spend more time playing darts and music than making sawdust. But nonetheless it contains woodworking machinery and insurers frown at that. If I hurt myself doing woodworking my health insurance will flip the bill. So can any one explain the risk to home insurers of my owning such equiptment? It's not like I have a $60,000 suv sitting in the garage. To top it off, not only does the insurance company want to insure the house only but they don't want to give me a break on my premium for their minimal coverage either! It seems to be the general concenses lately with the insurance companies- pay us insurance premiums but we may not cover you in a loss! I am sure some of those in Ca. are wondering why they piad homeowners insurance for all those years! My greatest fears are the violent spring storms here in the midwest. Is my fear of lightning strikes to my shop a legitimate concern? Is there a way to protect my equiptment against the threat of power surges caused by lightening?Does such an electrical apparatus exsist? Just rambling out loud!
I went through a very similar situation 2 years ago. All of the large agencies (state Farm, allstate ect.) wouldn't cover my shop once I brought it to their attention of the value of equipment that I had. My shop is a detached structure. The more I though about it I probably shouldn't have brought it up since my personal property coverage that we had would have likely covered the shop alone or the house alone, but not enough for both. My insurance co wanted to charge me an extra $800/year for coverage on the shop and it is very dicey whether it is a business. For me woodworking is a hobby, but all of the tools in the shop have been paid for by projects and are being deducted as a home business, I do not realize a profit from woodworking and never care to.
I finally found a small local agency that would provide me reasonably priced rider coverage for the shop and tools. They came out and looked at the shop and were fine with it. I had to stress to them that it is not a business. Try and look for the smaller agents.
Aaron
It seems like you have a bit of a conflict there. How can you deduct the tools as a business, never make a profit and stay on the good side of both the ins co and the irs. It appears that a rule or two is being bent somewhere. I'd love to be able to deduct my tools but as far as I can tell , as long as it is a hobby I can't deduct any more than I made so it is a wash anyway. Tom
Douglasville, GA
When ever i do a project for pay it is claimed as income as a home business. It is a home business and my new policy for insurance was able to write and accept it. When i say it is a hobby it is not my livilyhood the income is insignificant, but it all has to be claimed. The rules are not being bent. The concerns my insurance agent had for it as a business was customers comming into the shop each day. Not a home business where they just cover the items in the shop. They have other contractors that they cover equipment stored at home, but don't cover the business liability. I'm fine with not having the business liability coverage.
Edited 3/7/2005 3:15 pm ET by Abenker1
Thanks, I need to look into doing something similiar but the insureance aspect scares me. My shop is attached to my house and I'm afraid they will drop me altogether if i ask about it. I currently am a hobbyist but am considering doing more work and I'm afraid the line will blur, at least from the ins cos standpoint. Tom
Douglasville, GA
My home insurer has no problems with my shop.
But I want to be insured. I do what my insurer askes me to do.
I limit the amount of raw materials, waste materials, and people in my shop. I have a high deductable - it hurts me as much as my insurer when I hve a loss.
Rod
It is getting harder to find reasonable insurance for a wood shop. Since 911 rates have over doubled. I have a small propane furnace( the older tall, thin stand up kind ) from an older mobil home and a wood stove for back up. Wood seems to be ok with insurance co. if it is only ( used ) for back up heat source.
Good Luck
Mac
From what you're saying it sounds like they don't want to insure your shop because it is a shop, not because of how you heat it. Now that they have seen your shop, it sounds like you are out of luck with that company, at least.
My understanding is that if you make any money at your hobby, you will need to look at commercial insurance. Insurance laws vary by state; you'll need to check locally. Asking a broker is not a bad idea.
I also ran into the same prob. a few years ago. (live in Fl., no heat in building.) The shop that I was using was about 20 years old and my insurance co. would not cover it or my equipment.
I built a new two story shop 5 years ago next to the old one and there was never any prob. with getting coverage for it or the same equipment that was in the old shop. I haven't figured that out yet.
knothole
My shop is about 1/2 mile as the crow flies from my house. I have Auto Owners/Home Owners insurance and my agent is fully aware of my dedicated wood shop. He is also somewhat of a woodworker. They have no problems with insuring my shop or equipment. It cost approximately 8.00 per thousand per year on top of the rate for my home per year. Try an agent with Auto Owners insurance, the have been very easy to deal with
Garry
WoodWorks by Garry
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