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The value of DIY


No.4

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The time has come to have my annual meeting with my insurance agent. I have my home owners and all of our vehicles with the same company as the savings are significant. During this meeting the request to catalog the contents of our home will undoubtedly come up. Assigning a value to these contents for the most part is fairly straight forward as most are common consumer goods. However, the topic of my DIY stereo system has been a grey area in previous conversations with my agent. I can calculate the value of the individual purchased components, but how do I value the finished product. Certainly, time and skill need to be calculated in the total value of these items. Unfortunately, due to fact that I am a hoarder of my own creations I have never sold any of my DIY items. One suggestion my agent had was to have someone appraise the value of these items. I would assume that someone involved in similar cottage industry with a history of sales would suffice, but I don’t know for sure.

Have any of you ever encountered this situation? I would think heavily modified components would also fall into this category to some extent as well.

 

Let me know your thoughts.

 

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This is a sticky wicket for sure. If you get an appraiser make sure YOUR labor costs are factored in somehow. In my situation the contents of the home are insured at 1/2 or 3/4 of the homes value, I can't remember which. In either case there is NO WAY the contents of my home are worth any where near that amount. And my HT and 2 channel rig are not jewelry or furs so I assume therefore they would be covered. Maybe that's a bad assumption and I should talk to my agent also.

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I think that we all value the fruits of our labor higher than others value them, because we know what went into them, why they were done the way that they were (based on our own requirements lists and their relative precedence) and how much effort it took. It takes people with good ears to hear what we've done in our sound systems.  Most people don't have those, I've found.

 

Another problem that I see is the "brand" factor--i.e., most people today don't value performance and quality of construction of DIY like we do.  In fact, I see a lot of "Beranek's Law" in DIY that usually propels me in the opposite direction.  It takes not only good workmanship and quality parts, but also good judgment--and frankly, a lot of DIY optimizes aspects of design that I don't value as highly.  The trick of brands and branding is that the question of "did I choose the right requirements/precedence of requirements?" is not typically an issue.  Another intangible issue is that many/most people don't value things unless others value them.  This is the problem of DIY.  If you're Nelson Pass or Troels Gravesen, DIY for them is like brand name stuff for others that see and value their stuff--because they think that others value their stuff.  It's like gold or diamonds: why would most guys like that sort of thing, other than the fact that others would pay money for them?  If the price of gold or diamonds were like the price of painted molded plastic or cubic zirconia, no one would pay much attention.

 

So it goes for DIY.  It's like off-brand stuff.  You have to realize that most people are paying many times what the cost to the builder was to get their stuff (Klipsch included).  That's how they stay in business.  Stocks and bonds are also like this. You have to adjust by multiples of the sum-total product cost if you don't have a well-valued brand attached. 

 

Swimming pools with houses are a notoriously very poor investment, while building extra bathrooms in the house will usually net you a much higher return on investment (albeit, less than you probably paid for the parts and perhaps labor).  Life is like this.  I've learned to not get too excited when people that might buy something make extremely poor decisions from a point of view of what it would cost me to replicate the brand name stuff...I just adjust for people's poor judgment.  Insurance companies cater to those type of people (collectively). As an engineer, to me this isn't terribly logical or consistent behavior, but it's certainly generally accepted behavior. 

 

I just think of the movie And Justice for All, and smile.

 

Chris

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2 hours ago, No.4 said:

The time has come to have my annual meeting with my insurance agent. I have my home owners and all of our vehicles with the same company as the savings are significant. During this meeting the request to catalog the contents of our home will undoubtedly come up. Assigning a value to these contents for the most part is fairly straight forward as most are common consumer goods. However, the topic of my DIY stereo system has been a grey area in previous conversations with my agent. I can calculate the value of the individual purchased components, but how do I value the finished product. Certainly, time and skill need to be calculated in the total value of these items. Unfortunately, due to fact that I am a hoarder of my own creations I have never sold any of my DIY items. One suggestion my agent had was to have someone appraise the value of these items. I would assume that someone involved in similar cottage industry with a history of sales would suffice, but I don’t know for sure.

Have any of you ever encountered this situation? I would think heavily modified components would also fall into this category to some extent as well.

 

Let me know your thoughts.

 

 

Am I missing something when I look at your original post?

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58 minutes ago, DizRotus said:

I would insure it for a little more than it would cost me to replace it with more DIY.  IMO, expecting to recover your time is naive.  For me it’s a hobby, not an income stream.

Many hobbies result in finished projects that have more value than the sum of the components involved. Skilled execution has value, especially because not everyone possesses said skills. 

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This is an interesting question. First you need photos of all invoices for material, a write up of you labour and why you took certain approaches and I’d keep some eBay or amazon adds for items you’d consider “similar “, that’s the tricky part for sure. Some of Arek’s work maybe relative to your fine efforts? If you needed to claim at least then you have some documentation as a starter? 

 

More qualified people than me, who have seen your work on this forum could offer their thoughts, but I think some comparisons to commercial gear would go a long way to an adjuster. And there in lies the problem. If you get an answer please share it. My efforts are minuscule, but I should be documenting some of my work too.

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22 hours ago, No.4 said:

The time has come to have my annual meeting with my insurance agent. I have my home owners and all of our vehicles with the same company as the savings are significant. During this meeting the request to catalog the contents of our home will undoubtedly come up. Assigning a value to these contents for the most part is fairly straight forward as most are common consumer goods.

I've been working on my home owners insurance this week so this is a timely subject.  As far as I know, you can have whatever value you want assigned to the contents of your house.  The higher the value, the higher the premium.

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