Carlos Perez-Palacio <ceppm_photo@yahoo.es> writes:
> I'll be interested in damage and stolen coverage,
> both local and international (mostly european but
> also asian and latinamerican travelling).
>
> How does it works? I had my equipment for some
> years now and I don't have the receipts so, do I
> have to take it to the insurance company so they
> can check I have it and it's working? Or they are
> just going to trust my declaration?
>
> Any idea of how much it can cost? I know it has a
> lot of "depends" but roughly as a ratio of the
> equipment value, how much you are paying?
Well, what does the insurance company do? They assess, from long
experience, what the *expected loss* per year in your case is. To make a
gross simplification, suppose you have equipment worth Z2000 ("Z",
because I can't do a pound sign, but it may as well be a fictional
currency); further suppose that the loss is always total, and occurs
with probability P. Guess P = 1/25. In other words you expect (over the
long term to lose 1/25 * Z2000 = Z80 per year. The insurance company is
a charitable foundation, which accepts a trifling fee from you, so that
when this loss occurs it can warm its own heart with the glow of human
goodness, and save you any losses.
Hang on, delete that last sentence. Actually the insurance company is a
business, populated largely by totally innumerate marketing types, and
seeking to make a profit (which it sometimes does). So it charges you
your expected loss (leaving you at zero balance, in the long term). But
then it has to charge you its costs, which are substantial, plus its
profit, plus something to take care of the uncertainty in what the
expected loss actually is. Then a bit for the carpets, because they
wouldn't have cheap carpets, since _no-one_ would insure their camera
equipment with a company that had cheap carpets, would they?
And so on. So I reckon that if you can afford to buy your own equipment,
and if you expect to stay in the business of owning it (and its
successors) for at least ten years, you will be very much better off
financially by not insuring it. Particularly if you are a careful person,
you will be subsidising the careless, since the insurance company can't
tell, and has to assume you are careless.
FWIW, it _does_ make perfect sense to insure against an
"uncountenanceable loss". If your house burns down you cannot afford to
buy another; the probability of this happening is much less than once a
lifetime, so you want to spread the loss by insuring. (House insurance
is likely to be much much more efficient.) _If_ you're a new graduate
>from a photography course, and your sole fabulously rich relative has
just died, and left you the money to buy one of everything, which you
are going to use for your breadwinning street photography, then you'd
better insure it.
Sorry, this strictly has nothing to do with photography at all, but it
always irritates me when someone asks "I've dropped my camera in a lake:
what should I do?" and we get people wittering about insurance
companies, which have nothing whatsoever to do with it.
Brian Chandler
----------------
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