So, for insurance purposes, I need to put a monetary value on all the tools and machinery in my shop. Yowza! How in the world do I even start something like this? I can recall what I paid for the stuff I bought. But what about the stuff that I inherited from my grandpa, or the stuff I got at garage sales, or the stuff I traded for, or the jigs, the shop fixtures, the wood, the workbench I made, and all the other shop improvements that I added over the years? Aaaa! How do I figure for depreciation? My mind is spinning even thinking about just taking an inventory of all the things in my shop.
Jeffrey
Replies
Once u get the cost figured up, DON'T TELL YOUR SPOUSE!
Also, get all your tools out and line them all up on your work bench and start taking pictures. Keep the negatives or slides in a safe deposit box. While you at it, might as well do everything in the house too.
And, scribe your SS# on all your tools. Won't keep them from getting stolen, but sure will keep the slimy SOB's from selling them to a pawn shop.
PlaneWood by Mike_in_Katy
PlaneWood
ps - get replacement value insurance and figure the new price for replacing each tool.
PlaneWood by Mike_in_Katy
PlaneWood
Ditto to Planewood's advice to get replacement value. That is paramount -- "market value" does you next-to-no good whatsoever. If you insure your tools for replacement value, you don't have to remember what you paid, or come up with a value for tools you inherited. Keep a complete written and photographic record in a safe, fire-proof place.
PS: This "replacement value" idea applies to homeowner's insurance for belongings also. forestgirl -- you can take the girl out of the forest, but you can't take the forest out of the girl ;-)
No easy way to do it. You need to inventory everything first, photograph it, then go about the business of looking up the replacement cost for it. I sympathize with you, I too inherited many hand tools from my elders, and placing value on them is tough. My 1950 unisaw is a tank, and in my opinion better built than the new ones, but I would only get what a new one sells for now, should I loose it somehow. You can also make a video once you have everything inventory'd.
Don't see why you need figure depreciation. For insurance purposes all you need is either original cost or replacement cost. I use a spread sheet, which makes things a lot easier.
Most of my big stuff I still have invoices for. If you are insured for repl. cost, then that is the number you want tho most policies are ACV which is cost minus depreciation. You'll know because you have to pay extra for R/C policies. As a former insurance adjuster, I'd recommend that you use the current R/C. You don't worry about depreciation unless you have a loss. Depr. = useful tool life divided by age.
Generally you won't have the original cost, so for insurance purposes it is okay to just estimate todays cost if you know it. For example, I have 15 simple router bits at avg. $28/ea. and 12 big bits at $70 each.
If you have a spread sheet, the job shouldn't take you more than an hour. Just because you got a very low price on a tool, use it's replacment cost. Maybe you paid $10 for something at a flea market, but you're unlikely to be able to ever buy that thing again at that price, so $10 is not a fair market value, but a windfall. You have a right to insure to fair market. If you got it for free, that wouldn't make it worth nothing. See my point?
If you have a loss, you are only required to prove that you owned the item. Whatever value you claim, the ins. co. will try to verify and if they can replace the item at less than what you claim, that's all they'll give you. But they're not going to spend a lot of time quibbling over small items, so you need not be too concerned about those.
Dave of FLa.
Edited 8/7/2002 12:40:11 PM ET by none
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