Subject: Re: Water damage/Insurance claims

[Dan Noonan]

My "real job" during the week is as an insurance claim adjuster but I've 
been getting up to speed on piano technology and this list has helped a lot. 
  I'd like to help the list by sharing what would make a piano claim easier 
to settle to everyone's satisfaction from a claim adjuster's point of view.

Claims people don't know pianos but they know money....as in "HOW MUCH?"
They are looking for several dollar values and will be grateful for any 
documentation they can find that will help them justify their decisions.  If 
you can document the following values you will have provided a service for 
which you should consider sending someone a bill.

#1) ACTUAL CASH VALUE How much was the piano worth before the damage?  Not 
new, not rebuilt, but in the condition it was in before the damage. How much 
would an informed buyer have paid for the piano the day before the damage? 
Can you document sales of similar pianos in this price range? This is the 
piano's Actual Cash Value. Another way to figure the Actual Cash Value is to 
determine the cost of a new piano and then deduct for depreciation to 
account for the piano's age.

#2) REPAIR COST How much will it cost to repair the damage, to put the piano 
back to the condition it was in before? Not the cost to rebuild but the cost 
to repair.  An estimate showing hourly rates and material costs would be 
helpful. If it's your professional opinion that the strings needs to be 
replaced because of exposure to moisture then write to replace the strings 
but all the repairs you are recommending should be new damage and not old 
damage or wear and tear.

#3) SALVAGE VALUE How much is the piano worth in it's damaged condition? How 
much would you pay for it to keep it for parts or for rebuilding later? This 
is the Salvage Value. Let the adjuster know if you are interested in 
purchasing the salvage.

#4) REPLACEMENT COST How much does a new, comparable piano cost in today's 
dollars if bought at a retail store? This is the Replacement Cost. Include 
sales taxes and shipping if any.

If the Cost to Repair(#2)exceeds the Actual Cash Value (#1) then the piano 
is a total loss. If the cost to repair (#2) approaches 70% to 80% of the 
Actual Cash Value (#1) and if the Salvage Value (#3) makes up the difference 
then the adjuster can declare it a "constructive" total loss.

Insurance Policies are complicated contracts. Some of them will pay the 
Replacement Cost while others won't. Policies with Replacement Cost coverage 
will usually make two payments: the first at Actual Cash Value (#1) and then 
the balance after the new piano has been purchased.

Every claim, like every piano, is different. Some policies have limits on 
musical instruments. Some causes of loss are covered and others aren't. 
Answering the "HOW MUCH" questions and providing documentation is a real 
service to the piano owner.

Hope this helps.

Dan Noonan
Waterville, Maine



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