What are the Adjuster Keys to Valuing Power Tools?

Posted on July 31, 2015


Power tools pose unique challenges for insurance adjusters. As PropertyCasualty360 points out, they can account for up to one-third of an insurance claim, yet it is often difficult to verify if tools were stolen. Few people have receipts for all of their power tools, and establishing the market value of used tools is complicated. To overcome these challenges, adjusters need knowledge of both tools and trades.

Here's a look at how insurance adjusters can value power tools accurately:

Know the Tools and their Accessories

There are three categories of power tools: corded, cordless and pneumatic (air). Every power tool can be classified under one of these headings. Understanding the categories will help you classify the types of tools being claimed, estimate their typical value and identify common accessories.

It is important to know what accessories are used with each power tool being claimed. Any claims for accessories not commonly used with the stolen tools, or failure to claim common accessories, may indicate a need to investigate further. Knowing what accessories are used with what tools will help you know when to question a claim.

Know the Sellers

The best way to determine the fair-market value of the tools being claimed is to look their prices up at nearby sellers. From this price, a depreciated value can be derived if the policy only covers actual cash value. Different people have access to different sellers, though. A do-it-yourself homeowner may have to pay full retail at a nearby hardware store, but trade professionals often have access to industry supply companies that offer lower prices. The fair-market price should come from where the person would normally purchase the stolen power tools. Knowing tools, accessories and sellers is how insurance adjusters can value power tools. With this knowledge, you will be able to process a claim for stolen power tools.

If you're looking to join an established insurance adjusting firm, please contact us at Pilot Cat for more information today.