self insuring

[Janice Arthur]

Guys;

 

An old idea I figured out how to make it work for me.

 

Take your deductable for your insurance and put an amount equal to that amount in a separate savings account.

 

After a few years you may be able to "self-insure" because you'll have enough to cover most resonable insurance losses and/or all of it.

 

If my $500 deductible had accrued over the past 15-20-30 years I'd have $30k and now I could self-insure.

 

Of course we seldom have a total loss and the self-insurance would cover mostly a lost/broken item but it could cover a broken/lost arm etc too.

 

We also know that most of time on jobs we're insured by the production.

 

Up to you but ask yourself, "How is having a savings account going to be bad?" So it may be worth it just as an experiment.

 

Janice

[Eric Fletcher S.O.C.]

Glad that works for you.

 

Now what happens with a total loss? Homeowners rarely will cover a large loss of professional gear. What about when the camera truck explodes and production and their insurance company takes 5 months to pay out (That's actually happened)

[Janice Arthur]

Eric;

 

I didn't say it was something I did right off, and I'm playing around with how much I keep in savings to cover things like this.

 

I also said it was rare that you loose everything, as in your instance.

 

I do think it is something operators today should think about with all these lower end rigs of under 5-10K it certainly makes sense.

 

It also makes sense for operators who don't make a sizeable percentage of their income from Steadicam and/or can't afford a big loss.

 

It was something to think about in a new business world and if it works for you.

 

If I had taken my deductable for 30 plus years and saved that AND in the last 10-15 years also saved the premium amount I would have 60-70k and then I could be self insured with the money in the bank.

 

I have also only ever had a 6000. in losses over that time and it would have been worth it.

 

I'm saying to all those new generation folks to do the numbers and have some savings either way.

 

Janice

[Victor Lazaro]

What if your problem happens within those 10-15 first years?

[Eric Fletcher S.O.C.]

I do think it is something operators today should think about with all these lower end rigs of under 5-10K it certainly makes sense.

 

It also makes sense for operators who don't make a sizeable percentage of their income from Steadicam and/or can't afford a big loss.

 

For a small rig and sub $20K investment than yes it probably can work.

 

For someone with $100K+ in gear and doing this day in day out for a living, having the insurance is a good thing and it is a business expense so therefore it does offset 1099 income

[Janice Arthur]

Victor;

 

You don't do it right away, that's the idea you save up so that you can self-insure. From your first year put away the deductable and see what comes of it, maybe it works?

 

And Eric, again we agree at points, depending on your career when you have a significant investment it does make sense to have it. But even in your above example of the truck fire that took five months to get a recovery if the operator had a significant savings he/she could have "bridged" the loss, replaced the gear and then gotten the money from the company in five months.

 

I still have insurance, because you do need liability and renters etc but at some point and depending on what kind of jobs you have it is a possibility.

 

I'm just saying, as they used to say on the Apple commericals "think differently" about everything.

 

JA

[Jameson Johnson]

One could also take a hybrid approach here - put away deductible or other amount each month, and as the insurance renews, increase the deductible to whatever was saved. First year, standard deductible - year two $6000 deductible, etc. Maintain high deductible coverage for those "total loss" moments, but pay less for coverage each month. However, I'm not sure if deductibles can be written for any amount, maybe there's a ceiling to a deductible? I'm not an insurance guy.

[Janice Arthur]

Jameson is getting the drift, once you save up some, maybe (and a very good idea) you up your deductable. You'll save an awful lot this way and still not be at anymore risk. Most insurance companies have a limit, I think ours is $5,000. but boy what a savings if you have access to that much or better yet in a savings/stock account.

 

If you also haven't thought about it, auto insurance and just about every other insurance works this way.

 

Start to allocate a savings account just for insurance, and see what you can put away and in any form it will save you a bunch.

 

(Pick up a personal finances book, from the library if you really want to save money, and see what you can learn.)

 

Remember, insurance = risk / time. You get X benefit for X time. Once that time is over and u didn't use it zing you've got to pay again.

 

Its great creation, and necessary but over time you amass an awful lot spent on it and if there is another way to explore it you should; I wish I had done all this better younger!

 

Lastly, I've started thinking of funny things you never hear any one ever say; my favorite now is.

 

"Boy, I've just got TOO much in savings."

 

Janice

[Eric Fletcher S.O.C.]

"Boy, I've just got TOO much in savings."

 

That means your not investing correctly

[Dan Coplan]

Interesting thought Janice - I like it. Something more to think about. For the time being, does anyone have specific recommendations for a good, "low cost" insurance company? I've been using Walter P. Dolle for years. Thankfully, I've never had to make a claim. I'm sure they're fine, but I wonder if I could be getting adequate coverage for less.

 

Any recommendations?

 

Dan

[Janice Arthur]

Dan;

 

Walter P. has as good as deals and customer service as we've found, of course do your searching but they're pretty great.

 

Here are additional ideas; Don't insure every cable and widget; I insure the rig, the arm, vest and big accessories but certainly not the little stuff that even with day to day money I could afford to replace.

 

Another idea to is that if you have trusted pal, make a contract between you two that you guys can be a self-insured team. You'll spread out the risk, have agreements about how much you put in an account or however you do it and avoid all or some of your insurance payments that as we know you'll never get back. This may start small as I'm proposing, each start the team-up while you still have insurance but in say 3 yrs when you've both saved some money then start to get rid of your policies slowly.

 

A caution, have a plan to dissolve the partnership if you/or he want out in 2 yrs too.

 

You have to judge your friend and your friend's risk. Does he/she work a lot; travel a lot; live in a bad area; treat their equipment badly; or never get cert of insurance from production?

 

Its another idea of how to end up with fewer expenses that will kill your business if you let it.

Remember though if you have a fire at your house where you store your gear, it can be heart in the throat moment so insurance is good when you need it.

 

I've basically dropped my equipment insurance by 2/3rds over the past 5-6 years and boy it feels great too. I feel lilke I'm paying the right amount now.

 

Janice

[Mark Schlicher]

I shopped around and Dolle is very competitive I found. And their service is excellent. They understand Steadicam and production worlds, unlike many agencies.

 

Other considerations: the minimum insured amount is $20,000, I believe. You can list any camera equipment with them, not just your Steadicam. I have all of my major gear insured (added up to much more than $20k), so I have coverage whether its a Steadi gig or not...no matter which lights, which stands, which cameras are loaded in my SUV on a given day. For someone with a small rig and DSLR with a couple of lights and a few lenses, you could conceivably insure everything you have and still be under the minimum.

 

And then there's liability. Consider being an event/indie film/corporate shooter with a Pilot/Scout/Zephyr. Sometimes you are working for a company that has their own liability coverages and can issue a cert., sometimes not. Or you have direct clients (bride and groom, real estate company)...a situation where your are the production company, so you NEED your own coverage for those gigs. One liability claim could ruin you.

 

ENG news freelancers are generally expected to carry their own liability coverage by the crewing agencies.

 

Locations and municipalities also often require liability insurance for permission/permits.

 

In these situations, where your insurance is the primary insurance, liability and equipment coverage are, in my opinion, especially important. Also, people just starting out may think it's unimportant, but I believe it's really critical then, when you may find yourself doing those "favor-for-friends" gigs or saying "yes" to clients that are a bit shakier than would be ideal. Pony up $1000 a year for the peace of mind that one job gone wrong doesn't derail a promising career.

 

Janice, I like your idea of trimming the coverage for small cables and accessories, particularly if they don't go out on every gig. In my case, less than 1/2 of my stuff goes on on any given job, so the only time I am at risk for a total loss would be a fire at my home.

[Thomas English]

Apart from the issue of public liability, which can be insured seperately; Self insurance makes a lot of sense to economists and the super-rich who are able to hedge their own life bets. Certainly many of the super-rich will happily medically self insure!

 

The maths work out but not to an individual, as Eric describes, who is unfortunate in the earlier years. Sensibly this could easily be hedged if a co-operative of a few Steadicam operators from disparate regions got together to self insure. Imagine how much cheaper this would be since you would be saving on the considerable costs of:

 

Loss adjusters since the co-operative would discuss and examine claims according to their manifesto

Office maintenance

Shareholders profits

private jets for executives

 

However if its not done as a co-operative (as Lloyds of London, formerly Lloyds Cafe in London was simply a meeting place for people to form such co-operatives in shipping ventures) it makes little sense unless you are super rich.