Portable Generator Insurance?

[rexmitchell]

Anybody insure their portable generators? Talked with State Farm today and am trying to figure out what the best option is. A personal item policy (similar to insuring a watch) is one option that has no deductible but only covers that one item. The other I'm trying to do is the contents policy of the travel trailer. There is some weird wording in our policy that covers items "normally used" in a trailer, while outside of the trailer within 30 feet of the trailer. So I'm wondering if it might be covered there. The benefit there is the contents coverage covers more than just the generator and will probably be cheaper even with our deductible ($250). Thoughts?

[mich800]

midnightsadie wrote:
I disagree with the post from good sam director, I,ve had the same company for over twenty years I have over 20 different properties and rv,s cars etc with the same agent now his son. had claims over 5figures. and I,ve never got a letter saying my rates going up. or your cancelled. and he comes to my house every two years and reviews the darn things. sure glad I,m not with good sam.

And this is why people use professionals when purchasing insurance. Because you are 100% wrong about not getting booted from your homeowners insurance with multiple claims in Michigan.

[Lwiddis]

HTE has learned to spell “insurance fraud?” Just sayin’...

[Mickeyfan0805]

rexmitchell wrote:
A generator is probably 1000x more likely to get stolen vs a wedding ring or watch so it makes sense why they won’t let me insure it as a personal item.

Not only is the likelihood of theft an issue, but the small pool of those seeking such coverage is also a concern. Insurance companies make their money by spreading out the risk to the point that it is statistically justifiable. They may lose out on a claim here or there, but the vast majority of participants will spend more on premiums than they will receive in benefits (which is why, in general, the public 'loses' on insurance).

When there aren't enough people who need coverage, however, the premium gets to high to be viable for the small group seeking coverage.

Generators are easily stolen, high cost, and used by a small group of individual consumers (I'm assuming commercial applications would be covered in other ways). This is a lose-lose scenario for insurers. So, yes, no surprise at all that some don't want to issue coverage.

[rexmitchell]

valhalla360 wrote:

rexmitchell wrote:

My thinking was this, when initially considering this I was thinking the cost would be that of a personal article policy. This runs about approximately 12$ a year per thousand dollars of insurable value. So in this case, if they would have covered it, it would have been $24 dollars a year. I'd pay that to insure the generator and I guarantee you it would die before I even came close to paying out the total value of it. This isn't an option since they won't insure it but that would have been worth it had they been willing to insure it in the same manner as they do jewelry, art, etc.

And I will GUARANTEE that ON AVERAGE, you will pay more for insurance than you will get back from insurance payouts. If this is not true, the insurance company will quickly be out of business.

I suspect, you are being confused by the small dollar value of the item insured and the dollar cost of the insurance but not looking at the big picture...which is what insurance actuaries look at.

I’m not confused about it, we insure jewelry at the rate listed above. It would take many years before the cost of insurance equaled the replacement cost...like close to a lifetime. A generator is probably 1000x more likely to get stolen vs a wedding ring or watch so it makes sense why they won’t let me insure it as a personal item.

[jkwilson]

rexmitchell wrote:

jkwilson wrote:
Insuring something you can afford to replace is a poor financial decision. If you can’t afford to replace a portable generator, you shouldn’t have one because they are difficult to insure. Insure companies sell the idea that insurance is a good idea. It’s a bad gamble in almost all cases until it begins covering more than you can afford to pay.

Seems like pretty dumb logic. I can replace my pickup but cover it with insurance because I’d prefer not to write a check when a couple hundred bucks a year covers me in the event of a total loss. Risk mitigation is smart if it is cost effective. Just like we ensure personal items that are valuable, I wanted to explore the same with a generator that costs over 2k. The price isn’t right/not available so I’m not doing it but it was worth exploring.....

On average, you will spend more in insurance premiums than you would to replace the truck. That is an absolute fact. If it weren’t true, the insurance industry would not exist. Like anything else, there are cases where insurance pays you more than you pay in, but those are a big minority of policy holders. The odds are against you, but insurance marketing has convinced people that it makes financial sense to insure everything.

When you figure in depreciation and deductibles, the payback on totaling a $70K truck is substantially less than $70K. The kicker that really gets you that most people don’t consider is how much your rates go up after making a claim. Even if a tree falls on your truck, insurance companies (they share claim data) will consider you a higher risk and you will pay more.

[All_I_could_aff]

Just remember, insurance isn’t the oldest profession, but the end result is the same.

[valhalla360]

rexmitchell wrote:

My thinking was this, when initially considering this I was thinking the cost would be that of a personal article policy. This runs about approximately 12$ a year per thousand dollars of insurable value. So in this case, if they would have covered it, it would have been $24 dollars a year. I'd pay that to insure the generator and I guarantee you it would die before I even came close to paying out the total value of it. This isn't an option since they won't insure it but that would have been worth it had they been willing to insure it in the same manner as they do jewelry, art, etc.

And I will GUARANTEE that ON AVERAGE, you will pay more for insurance than you will get back from insurance payouts. If this is not true, the insurance company will quickly be out of business.

I suspect, you are being confused by the small dollar value of the item insured and the dollar cost of the insurance but not looking at the big picture...which is what insurance actuaries look at.

[rexmitchell]

pianotuna wrote:
As I said earlier, my RV insurance covers my generator, at no extra charge.

They said if it was permanently mounted it would be covered.

[Grit_dog]

midnightsadie wrote:
I disagree with the post from good sam director, I,ve had the same company for over twenty years I have over 20 different properties and rv,s cars etc with the same agent now his son. had claims over 5figures. and I,ve never got a letter saying my rates going up. or your cancelled. and he comes to my house every two years and reviews the darn things. sure glad I,m not with good sam.

You’re lucky then. And may want to shop your rates to see how they stack up after 20 years.
But if you’ve found a honest insurance company, please share, because I could lump the majority of ins co’s I’ve dealt with into the snake repellent thread!

[pianotuna]

As I said earlier, my RV insurance covers my generator, at no extra charge.

[rexmitchell]

valhalla360 wrote:

rexmitchell wrote:

jkwilson wrote:
Insuring something you can afford to replace is a poor financial decision. If you can’t afford to replace a portable generator, you shouldn’t have one because they are difficult to insure. Insure companies sell the idea that insurance is a good idea. It’s a bad gamble in almost all cases until it begins covering more than you can afford to pay.

Seems like pretty dumb logic. I can replace my pickup but cover it with insurance because I’d prefer not to write a check when a couple hundred bucks a year covers me in the event of a total loss. Risk mitigation is smart if it is cost effective. Just like we ensure personal items that are valuable, I wanted to explore the same with a generator that costs over 2k. The price isn’t right/not available so I’m not doing it but it was worth exploring.....

Could have explained it better but he's right....

On average, insuring something will long term be more expensive than simply paying for the replacement. With insurance, the price has to pay the average replacement cost plus advertising, agents, taxes, all kinds of expenses of running a business and making a profit.

Where insurance makes sense is for rare events that would cause a major financial impact.
- Lose a $1k generator...I'd be mad but I could go out and buy another without any significant long term effect on my financial situation.
- Lose a brand new $70k pickup a week after buying it...While I would get by, it would be a significant impact that could set me back a few years going towards retirement, to liberate enough cash to go get another...I would want to protect against that.
- Lose an old $5k pickup...again, I would be mad but it's not a big impact on my lifestyle.
- $250k house...very few people can justify skipping the insurance as the impact of a loss is simply too high.

My thinking was this, when initially considering this I was thinking the cost would be that of a personal article policy. This runs about approximately 12$ a year per thousand dollars of insurable value. So in this case, if they would have covered it, it would have been $24 dollars a year. I'd pay that to insure the generator and I guarantee you it would die before I even came close to paying out the total value of it. This isn't an option since they won't insure it but that would have been worth it had they been willing to insure it in the same manner as they do jewelry, art, etc.

[valhalla360]

rexmitchell wrote:

jkwilson wrote:
Insuring something you can afford to replace is a poor financial decision. If you can’t afford to replace a portable generator, you shouldn’t have one because they are difficult to insure. Insure companies sell the idea that insurance is a good idea. It’s a bad gamble in almost all cases until it begins covering more than you can afford to pay.

Seems like pretty dumb logic. I can replace my pickup but cover it with insurance because I’d prefer not to write a check when a couple hundred bucks a year covers me in the event of a total loss. Risk mitigation is smart if it is cost effective. Just like we ensure personal items that are valuable, I wanted to explore the same with a generator that costs over 2k. The price isn’t right/not available so I’m not doing it but it was worth exploring.....

Could have explained it better but he's right....

On average, insuring something will long term be more expensive than simply paying for the replacement. With insurance, the price has to pay the average replacement cost plus advertising, agents, taxes, all kinds of expenses of running a business and making a profit.

Where insurance makes sense is for rare events that would cause a major financial impact.
- Lose a $1k generator...I'd be mad but I could go out and buy another without any significant long term effect on my financial situation.
- Lose a brand new $70k pickup a week after buying it...While I would get by, it would be a significant impact that could set me back a few years going towards retirement, to liberate enough cash to go get another...I would want to protect against that.
- Lose an old $5k pickup...again, I would be mad but it's not a big impact on my lifestyle.
- $250k house...very few people can justify skipping the insurance as the impact of a loss is simply too high.

[HTElectrical]

I have an Inland Marine Policy thru State Farm. It costs me $78.00 per year, and covers any tools, or materials in my truck up to $5,000.00 with a $100.00 deductible. It is also replacement cost of item. I had my laptop stolen out of my truck. It was mounted on a Ram Mount and was used for Invoicing. I paid $800.00 or $900.00 for it when new, and State Farm ended up sending me $1,300.00 because that is what the closest spec HP laptop cost to replace the stolen one.

[rexmitchell]

jkwilson wrote:
Insuring something you can afford to replace is a poor financial decision. If you can’t afford to replace a portable generator, you shouldn’t have one because they are difficult to insure. Insure companies sell the idea that insurance is a good idea. It’s a bad gamble in almost all cases until it begins covering more than you can afford to pay.

Seems like pretty dumb logic. I can replace my pickup but cover it with insurance because I’d prefer not to write a check when a couple hundred bucks a year covers me in the event of a total loss. Risk mitigation is smart if it is cost effective. Just like we ensure personal items that are valuable, I wanted to explore the same with a generator that costs over 2k. The price isn’t right/not available so I’m not doing it but it was worth exploring.....