What is your most valuable real asset? I'm not talking about your family, your personality, your job, etc. Some people might answer that question by saying their home or their auto, but what about items that are smaller or easier to be lost, stolen or destroyed? For example jewelry, fine arts, oriental rugs, antique furniture, silverware...?
These items typically have limited coverages on a homeowners or renters policy. While you see a limit for contents or personal property, within the contract you will find special, lower limits for these categories. I'm going to have a lot of insurance agents or brokers upset with me because I might be creating more work for them, but I challenge you to pull out a copy of your contact and look for a section called "special limits of liability." This will provide you with exactly the limits that your policy is subject to; if you can't find it reach out to you agent or broker, if they can't find it or you don't know who they are, it might be time to find a new agent or broker.
Now let's talk about a solution. Obviously you want to keep your valuable items out of harms way (jewelry in a safe or vault, fine art and furniture out of direct sunlight, maintain an active centrally monitored fire and burglar alarm), but is there an insurance solution? Are you surprised to hear there is? Probably not.
It's called a collections/valuable articles/personal article/inland marine policy/rider/floater. Whatever the insurance company decides to call it, they all serve the same purpose, to protect those items (and more) mentioned above. These policies are typically inexpensive depending on the category of the item you're looking to cover and a lot of times you'll find that they are available without a deductible.
There are two ways to provide coverage for these items, blanket or scheduled.
Scheduled coverage is where each item is specifically listed on the policy with a description and a value (usually determined by an appraisal or bill of sale). So, if you were to encounter a covered loss, the company will pay up to the limit that is shown to replace it (some companies offer a cash out option where you are not required to replace the item, and some companies offer an extended replacement cost option if the value of the item appreciates). It is especially important to remember that scheduled items should have updated appraisals every couple of years as the value of art, gold, silver, etc. is increasing dramatically year over year at this point in time.
Blanket coverage, while not offered by every company, lists a limit for each of the chosen categories. You are not required to advise anything to the insurance company about the items that are being covered under this type of collections policy, but there may be a per item limit. What this means is if you have a per item limit of $10,000 and you have a covered loss of an item worth $12,000, the company will only pay the first $10,000 for any single item (not a single occurrence). Some companies have a higher rate for blanket coverage, so typically if you're looking to pay less premium you'll want to look toward scheduled coverage.
My guess is following this information, you've got some work to do! Good luck! Please feel free to post any questions, comments or concerns.
Photo curtesy of
http://www.123rf.com/photo_5855575_closeup-of-wooden-treasure-chest-with-valuables.html
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