Instrument Insurance – what you need to know

By DMA member Marti Henry
The Denver Musician, Winter 2008

When I moved to Denver two years ago and joined the Denver Musicians Association one of my first concerns was to make sure that I had adequate instrument insurance. I had had excellent coverage from the symphony orchestra in Germany where I had played bass trombone for 24 years. My first thought was to purchase insurance with the “AFM Musical Instrument & Equipment Insurance Program.” After all, it was designed for AFM members. It is called the “All Risk” Musical Instrument & Equipment Plan. After carefully reading the policy, I sadly realized the “All Risk” refers to the risk that the musician carries if he or she chooses this program. The coverage sounds very reasonable, $100 deductible and reasonably competitive rates. The trouble is in the fine print. All insurance is great until you have a claim. That’s when you find out if you are really protected and the insurance company fulfills its obligation to get you back in business.

The problem that I have with this insurance program is that a reimbursement for a stolen or damaged instrument or equipment will only be made AFTER said item is replaced. A cash payout of damages is very clearly not possible according to this policy.

This seemed very strange to me. I have an old instrument from the 60’s and finding a suitable replacement could take years. Or maybe I would decide that I really don’t need to replace it because I have other suitable instruments and would prefer to opt for a cash settlement. A call to the sales rep gave no satisfactory answer to either hypothetical case. She suggested directly contacting the insurance underwriter. That proved my suspicions were absolutely correct. There can be NO PAYMENT unless a replacement is purchased. If the replacement instrument costs less than the insured amount, the difference is not reimbursed. So if you have an instrument insured at $2500 and it is stolen, you can be reimbursed for up to $2500 dollars. If you find a replacement for $2200 they will only pay $2200, even if the quality of the replacement is slightly inferior. If it should take years to find a suitable replacement, then you have to wait until a replacement is actually purchased before receiving your reimbursement.

These restrictions render such an insurance policy completely useless for me. If this is not an issue for you, then this is possibly acceptable policy for you. Read no further! I was not satisfied with this policy and investigated other alternative insurance offers.

The best offer that I found was with Clarion Associates. They assured me that a claim could be paid out in cash and replacement has no bearing whatsoever on the payout. Of course there are various programs to choose from depending on the type of instrument that needs to be insured, but for my trombones and equipment there was no deductible and the rate per $100 was lower than the AFM All Risk program.

Only in a very few cases is there a deductible on Clarion policies. For example, the minimum annual premium to insure upright basses is $500 with a $1000 deductible (depending on the value of the bass). Reimbursement is based on stated value. So if you insure your instrument for $2500 and it is stolen, you get $2500 paid out for repair or replacement as you see fit. For instruments over $5000, an appraisal is required at the time the policy begins.

I have not had a claim, nor do I know anyone who has had a claim with Clarion or AFM Risk Free, but at least with Clarion I am starting from an understanding that I have a choice to take a cash payout for loss of an instrument and at a predetermined reimbursement value of the instrument.

I strongly encourage all members to review their instrument insurance terms and determine if it fulfills their needs. NOW, before it is too late.

If you have questions about the AFM insurance call Marsh Afinity Group Services at 800-503-9230. For information about Clarion, check their website at www.clarionins.com or call 800-848-2534.