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Tuesday, 21 January 2020 20:50

Are Your Valuables Covered? Maybe Not.

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Are Your Valuables Covered? Maybe Not. Central insurance

Updated January 31, 2020 at 4:15 p.m.

Protect Your Most Valuable Belongings

If you own your home (or have a renters policy), you might be surprised to learn that your standard homeowner's insurance policy doesn't cover the total loss of your most expensive possessions. Most homeowners' policies offer limited coverage for personal items such as jewelry, musical instruments, sporting equipment, cameras, and computers.

 

Standard Homeowners Insurance Does Not Fully Cover Expensive Jewelry & Valuable Items

Standard homeowners and renters insurance policies include coverage for personal possessions such as jewelry, but many policies limit the dollar amount for theft of valuable items. When jewelry is lost or damaged due to theft or fire, it may not be covered — many times it's excluded. Homeowners' policies generally have a $1,000 or $1,500 maximum coverage amount for jewelry loss due to theft. Therefore, when jewelry valued at $3,000 is stolen from your home and you only have a $1,000 limit, you’d only receive $1,000 of the $3000 needed to replace those items.

What Does Standard Homeowner’s Insurance Cover?

The replacement or the repair costs of your valuables depends on your insurance policy. Generally, policies offer basic replacement costs to keep your premium lower and more affordable.

The following is a guide to what is covered by a typical homeowners' policy:

Jewelry
A standard home insurance policy covers theft of your jewelry up to a $1,000 limit, depending on your policy. For most, that's not enough to cover the replacement of an expensive jewelry item such as a diamond engagement ring. The average cost of engagement rings is typically higher than the standard limit, therefore, if you have more than $1,000 worth of jewelry in your home, you probably need additional insurance to cover its full value.

Silverware
Silver or silver-plated flatware collections are often considered valuable and irreplaceable.  Silverware and flatware are usually covered up to $2,500 if stolen. If there's a set of silver in your home, consider additional coverage to protect its full value.

Rugs, Artwork, and Antiques
Rugs are covered to actual cash value, not replacement cost. Standard coverage for other valuable items is limited by your base policy. Get an appraisal on heirlooms to determine the additional insurance coverage needed to cover your high-value or one-of-a-kind items.

Collectibles
Whether you have a sports memorabilia shrine, rare wines, a rare coin collection, or a cache of vintage comic books, most policies cover actual cash value only, except coins and money, which have a specific limit.

Why Should I Insure My Personal Items?

There are two main reasons you may want to consider additional insurance for your valuables:

  1. The basic homeowner's policy limits the amount that would be paid for jewelry and other valuables.
  2. A deductible would typically apply to a loss that’s covered by a basic homeowner’s policy.

What Type Insurance Covers Lost or Damaged Valuables?

An insurance rider is an add-on coverage to your homeowners or renters policy (also known as an endorsement or scheduled personal property). It provides additional protection for your valuable belongings beyond what your homeowners’ policy covers. For example, if an item is valued beyond the limits of your home insurance policy, the item is "scheduled" in the rider to provide the additional coverage needed for repair or replacement in the event of a claim.

If you own jewelry, antiques, collectibles or other items that would be expensive to replace, there are two rider options to ensure full coverage in the event of a claim:

  1. The Jewelry Schedule: A supplemental jewelry rider that offers full-value coverage of expensive jewelry items or a collection of jewelry.
  2. The Valuables Schedule: A supplemental rider that provides full-value coverage for high-value items such as silverware, rugs, artwork, collectibles, and antiques.

What's Covered By Jewelry and Valuables Riders?

The following may be covered by a jewelry or valuables schedule:

  • Jewelry, engagement rings
  • Wedding gifts
  • Silverware, china, crystal
  • Antiques
  • Fine art
  • Stamp and coin collections
  • Bicycles
  • Trophies
  • Sound equipment
  • Sports equipment
  • Cameras
  • Computers, electronic devices
  • Musical instruments
  • Golf Equipment
  • Furs
  • Guns
  • Political campaign collections
  • Watches
  • How Riders, or Jewelry and Valuables Schedules, Work

    Your standard homeowners' coverage has limits to repair or replacement. Therefore, a rider covers each valuable item you own. Each item is a “scheduled” item under that supplemental insurance policy, whether it's jewelry or valuables policy. Your rider, or schedule, may cover the full cost of repair or replacement. For instance, if your wedding ring slips off while swimming in the ocean, the ring may not be fully covered by your homeowner’s policy. But if you list the ring as a scheduled item in your jewelry rider, you may be fully covered for replacement, depending on your insurer.

    How Much Does Additional Insurance for Personal Items Cost?

    As with all insurance policies, prices for riders for jewelry or valuables schedules vary. The type of jewelry, the insurance company you choose, where you live and where the item will be kept are all factors. First, however, there are a few steps to take before you decide if you need a rider added to your home insurance policy.

    • Review your current insurance policy with us The typical homeowners' policy caps coverage for contents.
    • Have valuable items appraised — It's important that expensive items are appraised properly since your premium will be based on this value, as will any subsequent claim. If buying this coverage for the first time, have heirlooms and other expensive items that were purchased several years ago appraised as well. Talk to us about how to make sure the dollar amount of your schedule reflects the value of these items.
    • Keep a copy of store receipts and add it to your home inventory — When you purchase a new valuable item, forward a copy of the receipt to us so as a record of the retail value of the item at the time of purchase. Keep a copy for yourself and update your home inventory. Get into the habit of keeping a visual record of all of your personal possessions. This helps to document your loss and speed up the claims process, particularly for claims involving antique and unusual pieces of jewelry.
    • Store valuables in a secure location — Protect your jewelry by storing it in a secure location in your home. If you don't wear the item regularly or are saving it for a child, consider keeping it in a safe deposit box. You may save money on the cost of insuring it, as some companies offer "in vault" coverage. If you want to wear the "vaulted" jewelry for a special occasion, many insurers will offer the option of purchasing additional coverage for the time it is out of the bank; the insurer must be notified in advance, however.

     

    Why Does My Homeowners' Policy Have Restrictions?

    Residential insurance policies have restrictions on high-value items and collectibles because a home insurance policy has been written to insure the average household. By limiting coverages to basics, the price of the policy remains reasonable for the average household. When you have items of higher value, or above the average of the general population who is happy with a basic policy, you have the option of adding a rider or endorsement to your home insurance policy.

     

    Make Sure You Fully Understand Your Homeowners' Coverage

    Your policy outlines your coverage and details the limits of how much you will be compensated when certain valuable items are damaged or stolen. Some of your valuable items may not be protected if you have inadequate coverage, so be sure you fully understand the details of your homeowners' insurance policy.

     

    Know What You Have, What It's Worth

    It all begins with knowing what you currently own — and it's easy to forget what you have when it's stored away. The next step towards insuring your valuables is to create an up-to-date home inventory. A good home inventory includes a detailed list of your possessions, including receipts, descriptions, and photos of your home contents.

    Creating a home inventory is often a dreaded task. Without one, however, you won't know the value of your household items before you submit a claim. There are a variety of home inventory apps that make it easy to store photos and sort your items by room. Check out TheBalance.com for a list of tested and recommended android and iOS home inventory apps.

    You have options to protect your valuables. Get the additional protection you need with a comprehensive valuable items insurance policy. Talk to us to find out if a rider is right for you.

    Want more information? Complete the form below and we'll get you started.

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    Disclaimer: The coverages in the post here are described in general terms and are subject to actual policy conditions and exclusions. For actual coverage wording, conditions, and exclusions, refer to your policy or contact your agent. Links to third party websites, vendors, apps are for informational purposes only and are not a recommendation; we are not responsible for pricing, claims, or functionality. 

    Sources: Liberty Mutual, Travelers Insurance, Insurance Information Institute

     

    Read 253 times Last modified on Saturday, 01 February 2020 17:52

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