By DAN REYNOLDS, senior editor of Risk & Insurance®
Anyone who's ever played an instrument with any passion knows that each instrument has its marvels and quirks. There are oboe players who insist on Rigotti oboe cane for their double reeds. Some French Horn players wouldn't be caught dead without that nickel-plated Conn double horn they've been using since college.
Even among musicians, guitar players are a notoriously picky lot and may be even more particular and brand loyal. That's why the damage to or destruction of more than 1,000 professional guitars in the Soundcheck Nashville studio and storage facility is so painful to so many.
Soundcheck owner Ben Jumper initially put the loss from the early May flooding at some $10 million in guitars, drum sets, and other instruments and equipment.
The Musician's Hall of Fame & Museum, which was storing guitars at Jumper's place, reportedly lost instruments once played by the likes of Jimi Hendrix and The Who's Pete Townshend.
About 60 or so Nashville musicians were lucky enough to have insured their guitars through Heritage Insurance Services, underwritten by carriers like Travelers and The Hartford. The flood coverage in their inland marine policies will cover the losses, said Joan Gallo, a vice president with Feasterville, Pa.-based Heritage.
Musicians who relied on their homeowner's policies to cover their beloved axes are going to be out of luck.
"Sometimes, unfortunately, musicians find out after the fact that, if they have had their instruments insured under a homeowner's policy and they are using them professionally, they have no coverage," Gallo said.
TAX REVENUES TO SUFFER
Cumberland River flooding has not only destroyed important musical mementos, it has also meant a big hit to the Nashville hotel industry and the loss of tax revenues from business interruption.
Initial loss estimates, which include major damage to the Gaylord Opryland Hotel and Convention Center, are coming in at $1.5 billion to $2 billion, according to Nashville officials.
The Gaylord Opryland Resort and Convention Center was already booked for 181,600 room nights at its 2,881-room facility for the four or more months that it is going to be out of commission.
That amounts to losses in the tens of millions of dollars, even using the hotel's lowest room rate, which is in the $200-per-night range.
Gaylord estimated that the loss of its room nights alone amounted to a 25 percent hit on Nashville's overall 2010 hotel tax revenue. The Nashville/Davidson County Metropolitan Government Finance Department was projecting $30,567,000 in hotel tax revenue for 2010, so that Gaylord hit represents more than $7 million in county government income washed away.
Damages to the Wyndham Nashville Resort were around $8 million in property losses, according to James Iervolino, the vice resident of risk management and insurance for Wyndham Worldwide.
"I guess this is fairly typical of any flood event that it always takes quite some time for information to emerge about the extent of the damage and the severity as well," said Neena Saith, the London-based senior catastrophe response manager for the global modeling firm Risk Management Solutions Inc.
However long it takes to figure out the exact losses, it's safe to say that large parts of Nashville's rich musical history, insured or uninsured, have been lost forever; and musicians who are uninsured are bound to feel an even deeper sting.
By comparison, the insured losses in Rhode Island, Connecticut and Massachusetts from flooding in March amounted to about $550 million, according to estimates released by the Property Claims Services of the Insurance Service Office.
May 21, 2010
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