I have had Holder do an appraisal. No aspect of the piano regarding musical qualities has anything to do with the appraisal. Its just a collection of commodity related physical attributes...like a potato. He never sees the piano, or much less, has any interest in what it sounds like. Its purely a commodity. The commodity approach does include, to some degree, "perceived value", but only in the sense of historic brand value. In this case, used brand value would be close to nil, given the original Chinese provenance. If the client were to pony up for an official appraisal, I think he would be sorely disappointed, in what the insurance world thought his piano would be worth.
This setup is designed to favor the insurance company, of course, so, in the event of a loss, one must be prepared to argue the definitions actually contained in the policy. Regarding the definitions, there will always be points of interpretation in assessing what the definitions actually mean, in a particular case, as per my first hand experience of dealing with a shop fire claim. If I were arguing my case with the adjusters, which is part of the deal, one does not simply accept their assessments as un-discussable. I personally would argue that musical value was, part of "making me whole" again, and given my previous experience, if I went to the mat, I think I would prevail, as long as it did not appear I was trying to pad the claim...trust was important in my claim.
At one point in my shop fire claim, I did have to go to the mat, not with my adjuster, but with the insurance company's head adjuster. I prevailed since I knew the policy better than he did at that point. The adjusters actually manage so many different policies, even within their own company, that they really don't often know your entire policy, so nailing one's claim down, will always end up being a rather unpleasant full time job for a couple of months. So that also has to come into how to approach the valuation, because the claim is more complex and negotiable than often presented.
Leaving the question still open, of what to do. I think I am going to tell him his best strategy is to recoup the funds he paid me to purchase the piano in the first place. The commodity approach will leave him way short, and he/I in the event of a loss, can back up the work and original costs with documentation. I do think, recouping the value of the instrument in this case, will require negotiation, as its too non-standard a valuation.
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Jim Ialeggio
grandpianosolutions.com
Shirley, MA
978 425-9026
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Original Message:
Sent: 06-03-2021 01:18
From: Willem Blees
Subject: weird value question
Jim
When I did some research on appraising pianos, I found that, as we all know, the IRS wants an "official" appraisal of any item if it's value is more than $5000 when it's donated to a non-profit organzation. What I also found out is that while the insurance industry does not have to follow the same guidlines as the IRS, they are using that $5000 value when they look for an excuse not to pay an insurance claim.
In other words, what you and I, and the rest of us on this list, might think the piano is worth because of all the work you put in to it, it won't mean a thing if the appraisal isn't an official one. Therefore, I would like to suggest you work with Leo Holder and have him come up with an official appraisal. Leo will work with you and because he's an RPT, he speaks our language. But he knows how to write up an appraisal using legalise language, which is what insurance companies like.
He's got an ad in the Classified section of the Journal. But in case you can't find your copy.
Leopold Holder. 646-637-2266. Leoholder3@yahoo.com
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Willem "Wim" Blees, RPT
Mililani, HI 96789
Original Message:
Sent: 06-02-2021 20:51
From: Jim Ialeggio
Subject: weird value question
Client asking what he should carry for his piano on his homeowners policy. Not an appraisal, just wants to call out replacement value of certain high ticket items in his policy.
Piano is a 2005 Chinese stencil grand I put a fair amount of rebuild work into before selling it as a spec piano. 6' grand came out sounding and playing quite nice, because of the amount of work I put into it. However,because of the Chinese provenance of the original instrument, my asking price was, of course, much lower that I would have asked for a Steinway which would have received absolutely identical rebuild work. This meaning, I took on the project to see what I could do to an entry level horrible chinese grand, selling it as a higher than entry level performing piano, but priced as a slightly elevated entry level price. Price was slightly elevated from the cost of an entry level Chinese grand, but still seriously discounted from what a comparably performing US piano would fetch...irrespective of my rebuild work. I made short money on the deal...not something I will be doing again for numerous reasons, but an interesting project to see how good or bad these pianos actually were.
So that leads to the question from the insurance angle, what is the replacement value of this instrument? Is it the cost of a new chinese 6' entry level grand, regardless of out of the box musical qualities? Or, is it the value of a almost worthless core, entry level Chinese 6' grand, plus the expense my considerable rebuild work. Said another way, is the replacement value a sheer monetary value, independent of musical value, or is the replacement value, primarily comparable musical performance, even though the sales price was discounted relative to that performance level. (basically, I took the hit in the discrepancy between sales price and performance level.)
If its value is sheer new Chinese 6' grand regardless of performance, full replacement, for a musician, results in a "musical performance loss". If its value is combination of the provenance of the core, plus quality of the rebuild work, then client gets a replacement performance value, exceeding the discount he originally realized because of the Chinese provenance. Bit of a conundrum.
Any thoughts on this?
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Jim Ialeggio
grandpianosolutions.com
Shirley, MA
978 425-9026
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