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Thread: Insurance question.

  1. #1
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    Insurance question.

    Iíve had a small side business doing small jobs, mostly railings and some other small repairs on whatever shows up at my door for several years, I went full time in May but on a limited basis as Iím easing into retirement. Last year my wife and I bought a new property with a smaller home and a big (30X50] barn attached at one corner. A couple weeks ago we got a notice from our homeowners insurance company that they would not be renewing our homeowners policy because Iím working out of the barn and they are refusing to cover the premises. The barn is a full concrete floor, concrete frost walls up to four feet and double layered sheet rock on all the walls as a fire barrier to protect the home. Iíve got a couple insurance agents looking for a new policy but the only offer we have received so far are from commercial carriers at four times the cost. This one offer only covers the building, none of the furnishings or tools etc would covered and weíd need another policy to cover the other property. I just snapped on the agent, I told her that Iím not pissed at her but at the underwriters who are using the presence of a welder to justify raping me on the coverage. Where do they think all the welders sold at Home Depot, Loweís and harbor freight go? If welders were so hazardous there would be houses burning down everyday around here.

    Has anyone else run into a similar situation and what was your outcome, Iím getting a large screwing and Iím none too happy about it. Hopefully one of you gents has found a work around for this situation. Thanks in advance for any advice.

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    Re: Insurance question.

    if your in business your home owners WILL NOT COVER..you need both a home owners insurance to cover your house and a full business policy to cover your business for liability and the barn structure, tools and anything else you want to add in..and the cost adds up..welcome to the being in your own business world....
    now if you werent in business and any welding was just your personal stuff, then your home owners would cover the barn in case of fire...

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    Re: Insurance question.

    Quote Originally Posted by Hobbytime View Post
    if your in business your home owners WILL NOT COVER..you need both a home owners insurance to cover your house and a full business policy to cover your business for liability and the barn structure, tools and anything else you want to add in..and the cost adds up..welcome to the being in your own business world....
    now if you werent in business and any welding was just your personal stuff, then your home owners would cover the barn in case of fire...
    Thanks, the biggest hurdle seems to be the barn is attached to the house and splitting coverage to cover the barn and A separate policY to cover the house is some kind of a hurdle for the underwriters. It seems that they are piling on and everybody is looking for a taste when I’ve NEVER filed a claim against any insurance policy I’ve ever had.

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    Re: Insurance question.

    Quote Originally Posted by winniweld View Post
    Thanks, the biggest hurdle seems to be the barn is attached to the house and splitting coverage to cover the barn and A separate policY to cover the house is some kind of a hurdle for the underwriters. It seems that they are piling on and everybody is looking for a taste when I’ve NEVER filed a claim against any insurance policy I’ve ever had.
    yeah that may be an issue, unless you can build some code approved fire wall where they connect, thats what they do in attached housing units...

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    Re: Insurance question.

    There is a fire wall between the house and the shop. It’s double thick sheet rock and built right . The guy who built the house is an excavation contractor and built the home for himself and he built it to service his own equipment. I guess I’ll just have to shop around until I get the best combination of policies .

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    Re: Insurance question.

    Welcome to the world of commercial where everything costs 10x more

    While your residential firewall may be built right and code for a home shop I really doubt a double rock wall would ever be found in commercial space for that purpose... everything we do in warehouses has to be completely flame retardant... steel studs plates and sils any lumber when permitted to be used has to be fire treated, commercial building is a completely different animal from residential... that's why they don't like to cross cover on insurance. As for insurance same thing -- completely different from personal/homeowners insurance... just for setting foot in warehouses we have to have a 2 million dollar policy... for starters!!!

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    Re: Insurance question.

    I don't know if it would hold up in court(probably not in today's society) but you could do the work for free and accept donations!

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    Re: Insurance question.

    The cost goes up because the risk- for the Insurance Company- goes up when you have a business.

    Besides structure coverage you'll be getting a lot more liability coverage. Doesn't matter much to the insurance company that a business doesn't have much foot traffic, just takes one person to get injured at your business premises. That could be a customer or a delivery person.
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    Re: Insurance question.

    Quote Originally Posted by winniweld View Post
    There is a fire wall between the house and the shop. It’s double thick sheet rock and built right . The guy who built the house is an excavation contractor and built the home for himself and he built it to service his own equipment. I guess I’ll just have to shop around until I get the best combination of policies .
    a proper fire wall needs to be engineered, the fire wall in the attached housing was cinder block that I believe had some sort of fire rating and it ran above the roof line and was capped to look pretty....

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    Re: Insurance question.

    I would call a hobby welding.
    Some times the insurance company will look at fire wall. Some you get a permit from city or county.

    My self I would take the insurance company and find out what what you to do. Ever state, city and county will be different.
    I can not give one fix all statement.

    I have had two times in my life that just after buying the insurance company said need a new roof with permit from my city. Both time I had already had roofer put a roof on with permit for city. After the roofer was finish and city did there inspection and signed off I sent copy to insurance company.
    FYI I buy fixer uppers for home.

    Dave

    Quote Originally Posted by winniweld View Post
    Iíve had a small side business doing small jobs, mostly railings and some other small repairs on whatever shows up at my door for several years, I went full time in May but on a limited basis as Iím easing into retirement. Last year my wife and I bought a new property with a smaller home and a big (30X50] barn attached at one corner. A couple weeks ago we got a notice from our homeowners insurance company that they would not be renewing our homeowners policy because Iím working out of the barn and they are refusing to cover the premises. The barn is a full concrete floor, concrete frost walls up to four feet and double layered sheet rock on all the walls as a fire barrier to protect the home. Iíve got a couple insurance agents looking for a new policy but the only offer we have received so far are from commercial carriers at four times the cost. This one offer only covers the building, none of the furnishings or tools etc would covered and weíd need another policy to cover the other property. I just snapped on the agent, I told her that Iím not pissed at her but at the underwriters who are using the presence of a welder to justify raping me on the coverage. Where do they think all the welders sold at Home Depot, Loweís and harbor freight go? If welders were so hazardous there would be houses burning down everyday around here.

    Has anyone else run into a similar situation and what was your outcome, Iím getting a large screwing and Iím none too happy about it. Hopefully one of you gents has found a work around for this situation. Thanks in advance for any advice.

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  16. #11
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    Re: Insurance question.

    Quote Originally Posted by smithdoor;8760465[COLOR="#FF0000"
    ]I would call a hobby welding.[/COLOR]
    Some times the insurance company will look at fire wall. Some you get a permit from city or county.

    My self I would take the insurance company and find out what what you to do. Ever state, city and county will be different.
    I can not give one fix all statement.

    I have had two times in my life that just after buying the insurance company said need a new roof with permit from my city. Both time I had already had roofer put a roof on with permit for city. After the roofer was finish and city did there inspection and signed off I sent copy to insurance company.
    FYI I buy fixer uppers for home.

    Dave
    yeah and your an idiot....so when the barn and house burn down, and the insurance company investigates and find out he runs a business and tried insurance fraud by lying about what he does, 2 things will happen..they deny the claim and he gets to pay out of pocket to rebuild, and maybe he spends some time with a lawyer trying to stay out of jail..insurance companies will spend alot to not pay out large claims....and if someone gets hurt and insurance doesnt cover..then he will be on the hook for that liability too...but hey if he doesnt have any assets then go that route...

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    Re: Insurance question.

    I said check with insurance company and find out what they want.
    If at working as hobby business it may make a difference.
    It is still up to insurance company on what you can do.

    Quote Originally Posted by Hobbytime View Post
    yeah and your an idiot....so when the barn and house burn down, and the insurance company investigates and find out he runs a business and tried insurance fraud by lying about what he does, 2 things will happen..they deny the claim and he gets to pay out of pocket to rebuild, and maybe he spends some time with a lawyer trying to stay out of jail..insurance companies will spend alot to not pay out large claims....and if someone gets hurt and insurance doesnt cover..then he will be on the hook for that liability too...but hey if he doesnt have any assets then go that route...

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    Re: Insurance question.

    [QUOTE=smithdoor;8760476]I said check with insurance company and find out what they want.
    If at working as hobby business it may make a difference.
    It is still up to insurance company on what you can do.[/QUOTE

    once again..its NOT a hobby business..its too easily to be found out in todays times, and end up losing all your coverage..and you know dam well the insurance industry will black list you for super high rates and the lowest coverage...so will it be worth it?? your risking all that over a few thousand $$ each year...and if hes in a legit business..its all tax deductible....so your cost goes down your tax rate..

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  22. #14
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    Re: Insurance question.

    Just ask IRS what a hobby business
    They will till you.

    But you still have Check with insurance company on this part too.

    Quote Originally Posted by Hobbytime View Post
    once again..its NOT a hobby business..its too easily to be found out in todays times, and end up losing all your coverage..and you know dam well the insurance industry will black list you for super high rates and the lowest coverage...so will it be worth it?? your risking all that over a few thousand $$ each year...and if hes in a legit business..its all tax deductible....so your cost goes down your tax rate..
    Last edited by smithdoor; 5 Days Ago at 08:54 PM.

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    Re: Insurance question.

    Quote Originally Posted by smithdoor View Post
    Just ask IRS what a hobby business
    They will till you.

    But you still have Check with insurance company on this part too.
    your missing the point as usual...you are telling the op to tell his insurance company he is a hobby welder..and then have a commercial business going while paying a lower rate...

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  26. #16
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    Re: Insurance question.

    Quote Originally Posted by Hobbytime View Post
    your missing the point as usual...you are telling the op to tell his insurance company he is a hobby welder..and then have a commercial business going while paying a lower rate...
    Yep, cheat the system .. then WHEN something happens no matter whos fault it is we ALL lose because the insurance companies WILL get their money and some political hack will get involved and put even more rules and laws in place to make it safer for ALL of us....

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    Re: Insurance question.

    Hobby business
    As taxes go you have follow the tax laws.
    But still up to insurance company.


    Quote Originally Posted by Hobbytime View Post
    your missing the point as usual...you are telling the op to tell his insurance company he is a hobby welder..and then have a commercial business going while paying a lower rate...

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  30. #18
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    Re: Insurance question.

    I don't think smithdoor's first language is English, so y'all are talking past each other some.

    That said, there's no such thing as a hobby business. It's a hobby. Or it's a business. You've already said it's a "side business," you also said "full time in May," so it's already settled. The system which some people (maybe smithdoor?) seem to be always trying to cheat is eventually going to catch and fry you...actually it seems like that's already happening.

    I can't comment on the rest of the questions because my situation is different and it's apples to oranges, but I'll say in closing that the reason we business owners have to charge high rates is largely because of overhead like insurance. If you've been used to getting all the work you bid on because you've been undercutting legitimate businesses, that may change once you're playing by the same rules they are. You'll get a chance to see how much customer loyalty you have once they realize that they're now paying you as much as they would be any other welding shop. Not trying to be mean or pick on you, BTW. This is what happens when anyone who's been flying under the radar either decides or is forced to go legitimate.
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    Re: Insurance question.

    Quote Originally Posted by smithdoor View Post
    Hobby business
    As taxes go you have follow the tax laws.
    But still up to insurance company.
    message to the OP..dont listen to smithdoor unless you want a very expensive and possible criminal lesson in business insurance...talk to your broker and get the proper business insurance and limits that will protect you, and pay the price..remember its not costing you but its an investment in your secure future, and thats how you have to look at lit..just like car insurance and a seat belt..you dont need any of them , till you get into an accident and then its too late to get them..damage already done..use common sense...

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    Re: Insurance question.

    If you do not have liability insurance or can not pay the use chapter 11 or 13.
    It still come down to what the insurance company will want from you.

    Dave

    Quote Originally Posted by Hobbytime View Post
    message to the OP..dont listen to smithdoor unless you want a very expensive and possible criminal lesson in business insurance...talk to your broker and get the proper business insurance and limits that will protect you, and pay the price..remember its not costing you but its an investment in your secure future, and thats how you have to look at lit..just like car insurance and a seat belt..you dont need any of them , till you get into an accident and then its too late to get them..damage already done..use common sense...

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  36. #21
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    Re: Insurance question.

    smithdoor's Avatar
    smithdoor
    smithdoor is online now WeldingWeb Craftsman

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    Re: Insurance question.

    If you do not have liability insurance or can not pay the use chapter 11 or 13.
    It still come down to what the insurance company will want from you.

    Dave

    Quote Originally Posted by Hobbytime View Post
    message to the OP..dont listen to smithdoor unless you want a very expensive and possible criminal lesson in business insurance...talk to your broker and get the proper business insurance and limits that will protect you, and pay the price..remember its not costing you but its an investment in your secure future, and thats how you have to look at lit..just like car insurance and a seat belt..you dont need any of them , till you get into an accident and then its too late to get them..damage already done..use common sense...


    I guess you cant read either....

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  38. #22
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    Re: Insurance question.

    Thanks all. I think weíve got the insurance thing heading in the right direction. Our original homeowners agent is Putting together a policy that will cover the buildings under a business policy and then covering the home furnishings etc under a separate policy similar to a renters policy. Itís gonna be about 4X the regular policy cost but we will be covered. The reason I was pissed is that Iíve been doing this as a side hustle for several years. Now Iím doing the ď side hustleĒ exclusively as I enter semi retirement and the agent has been aware of this all along the underwriters exposure to loss is no different than it ever was but since this is no longer a side hustle Iím going to have a much larger insurance cost. It just seems like a money grab by the underwriter purely because they can; I thought only the government was allowed to pull that maneuver.

    Iím not looking to undercut any of the local welders, one is a friend who has encouraged me to please take the small repair work on farm equipment and homeowner jobs etc. so he can focus on bigger jobs. Sure the insurance is going to eat into the profit, as does the liability insurance, electric and everything else but I not going to start playing games with the insurance. You have insurance for a reason , lying to them is likely to end up with coverage being denied when you need it the most and is just not a good idea in my opinion.

    Does anyone actually run their business from a home shop ? Iíd like to hear any advice you might have.
    Last edited by winniweld; 1 Day Ago at 08:01 AM.

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    Re: Insurance question.

    Quote Originally Posted by winniweld View Post
    Thanks all. I think we’ve got the insurance thing heading in the right direction. Our original homeowners agent is Putting together a policy that will cover the buildings under a business policy and then covering the home furnishings etc under a separate policy similar to a renters policy. It’s gonna be about 4X the regular policy cost but we will be covered. The reason I was pissed is that I’ve been doing this as a side hustle for several years. Now I’m doing the “ side hustle” exclusively as I enter semi retirement and the agent has been aware of this all along the underwriters exposure to loss is no different than it ever was but since this is no longer a side hustle I’m going to have a much larger insurance cost. It just seems like a money grab by the underwriter purely because they can; I thought only the government was allowed to pull that maneuver.

    I’m not looking to undercut any of the local welders, one is a friend who has encouraged me to please take the small repair work on farm equipment and homeowner jobs etc. so he can focus on bigger jobs. Sure the insurance is going to eat into the profit, as does the liability insurance, electric and everything else but I not going to start playing games with the insurance. You have insurance for a reason , lying to them is likely to end up with coverage being denied when you need it the most and is just not a good idea in my opinion.

    Does anyone actually run their business from a home shop ? I’d like to hear any advice you might have.
    just because your broker knew what was going on, you still were NOT covered incase something happened...hey thats the cost of business....my business insurance is far more expensive than my private home or even rental properties insurance costs..thats just the way it is...it suxs, but you must have it if you have any assets, and some areas its CRIMINAL not to carry the proper liability insurance if your in business...look at it this way..peace of mind is priceless....and now you can do as much work and make as much $$$ without worry or always looking over your back for the day you get caught or something happens...plus being in business the proper way shows responsibility to your customers and that puts them at ease when hiring you for work...
    just get a GOOD accountant, yes pay for one, they will save way more $$ than it costs to hire them...

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