I was visiting with a customer the other day when we started reviewing his homeowners policy for gaps in coverage. While we were talking about his personal property coverage, he stated how he had just purchased an expensive anniversary ring for his wife. He was happy to see he had a high limit of coverage for his property and wouldn’t have to worry about the ring being stolen. A logical but inaccurate belief.
Homeowners policies are designed to insure your property against theft. If you tv or stereo is stolen, your policy should provide coverage for you to replace it with a brand new tv or stereo, regardless of the cost to replace. But some of your possessions have limitations to the amount of coverage a standard homeowners policy will provide.
Some of the things you own that may have limitations are (but not limited to):
- Musical instruments;
- Autographed items; and
- Rare or one-of-a-kind items.
Depending on your insurance company, your limit of insurance for each of these items may be limited to a few hundred dollars if you suffer a covered loss. However, you can properly insure these valuables by notifying your insurance agent and discussing the various ways to insure these items. In the case of my client above I was able to add specific coverage for the ring to the policy using a scheduled personal property endorsement. And since it was a new purchase and his jeweler had given him an appraisal with his purchase, it was very easy and inexpensive to do. Now if he has a covered loss, he will get the value of his appraisal.
I had another client who also had a few items of jewelry that she had owned for a while, but she didn’t want to spend the time and money to get appraisals for her jewelry. Again, depending on your insurance company, there is a solution for that as well. We had the client give us her total dollar value of all of the jewelry she owned. We then added a blanket jewelry endorsement to her policy. Now if she has a covered loss to her jewelry, she and an insurance adjuster will work through the claims process to try and establish the value of the items at the time of the loss. By having purchase receipts (from either the store or credit card), photographs or other documentation, she and her adjuster should be able to determine the replacement value of her jewelry.
The best advice I can give to anyone who owns any items of value is to ask your insurance agent a specific question – is this item covered under my insurance policy for theft (or fire or any other covered peril) or do I need to add additional coverage to my policy. Also, if you haven’t had a review of your homeowners insurance in a few years, I would suggest you do it soon. A policy review can eliminate gaps in coverage and bring peace of mind knowing your expensive possessions are properly insured.
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