Looking at most homeowners’ policies, the coverage amounts are limited for
certain items such as jewelry, coins, stamps, furs, and collectibles.
If you have high value insurables in your home, it makes sense to utilize a
well-thought out strategy for managing the risks of loss or impairment.
It’s not just about quantity – it’s also about quality.
Specialized policies or “floaters” are available to cover valuable items at
an agreed upon dollar amount as scheduled on the policy. If you
prefer, insurers may be willing to cover your valuables on a blanket basis at
an agreed upon value per type. For example, if you have many items of
jewelry, and you are comfortable insuring them all on a blanket basis, you might
agree on $100,000 as the coverage amount. If you have fine china or antiques
check to see if coverage includes accidental breakage and if it needs to be
scheduled. Such breakage would not be included under most homeowners’
Another benefit of the floater is that they typically lack a deductible, so
you are covered from the first dollar of loss. In addition, these floater
policies are usually written on an “all-risk” basis. This means that losses
are covered for all perils regardless of whether or not they are named, unless
the peril is specifically excluded. A nice feature of floaters is
“mysterious disappearance” coverage. While many policies, particularly
inland marine policies, exclude mysterious disappearances of items, these floaters
often cover them. Mysterious disappearance, as you might guess, involves
a loss where the cause is unknown.
A key element in the process of insuring your valuables is your approach to
risk management. Most insurers will take your commitment to minimizing
the chance of loss into consideration when pricing your coverage.
If you have a Renoir sitting in your living room and no alarm system, for example,
expect to pay more for coverage.
Some insurers will even help to facilitate your risk management strategy by
assisting you in the inventory process. They may also help coordinate
third-party appraisals – an essential element of the risk-management and insurance
processes. All too often, insureds undervalue their own property, and
therefore underinsure the property. A qualified appraiser can help you
assess the value of your property and provide necessary documentation of the
value in the event of a loss.
To ensure that you have adequate coverage, follow these few guidelines:
1. Take inventory of your valuables. Don’t
forget those non-obvious items of value like the autographed Bobby Bonds baseball
sitting in your trophy case. It might be worth more than some or all of
your jewelry and art!
2. Obtain an appraisal of the more important
items. For special items, be prepared to go to a specialist. You
wouldn’t go to the same appraiser for the Bobby Bonds baseball as you would
for your jewelry.
3. Talk to your insurance agent about what floaters
are available and find out what coverage and limits are available. Compare
the coverage to your basic homeowners’ policy in order to fully assess the value
of the additional coverage.
4. Find out what services your insurer offers
you in addition to the coverage they provide. If they are able to assist
you in the conservation and preservation of your valuable property and if they
bundle these services in a cost-effective manner, it may make for a win-win
as you take advantage of all they have to offer and they benefit from a loyal
and prudent client who will hopefully be with them for many years to come.