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You may have more valuable possessions than you realize – jewelry, furs, artwork, oriental rugs and collectibles, to name a few. Your homeowners policy can provide some coverage, but with deductibles and coverage limitations on valuable items, a personal articles insurance policy also known as valuable articles insurance, or an insurance rider can provide the additional coverage that you may need.

Do you need valuable articles coverage?

In other words, do you really need special insurance for things like jewelry, artwork, silver and antiques? While you could rely on regular homeowners insurance to cover these high-value items, the problem with homeowners is that the coverage for some valuables is very limited. This may be fine if the value of your favorite possession is of limited value (say, less than $500). But we’re guessing since you’re reading on, that’s not you.  So, if you’ve invested time, passion and money into your valuables, a good personal articles insurance policy could be very helpful if something unfortunate should happen to your cherished possessions.

How does this coverage work?

You insure your valuables for their actual worth – dollar for dollar. The value is settled in advance before anything happens.  This agreed upon value can be based on either what you paid for the item (as documented by a sales receipt) or the item’s appraised value (most insurance companies require that an appraisal be done within the last three to five years).

What can a personal articles insurance policy cover?

• Jewelry
• Furs
• Cameras
• Musical Instruments
• Silverware/Goldware
• Fine Art (such as oriental rugs and paintings)
• Collectibles
• Sports Equipment  (such as bicycles, golf clubs)
• Computer Equipment

What are your personal property coverage choices?

Your homeowners policy will protect the majority of your personal possessions (in fact, the personal property coverage on your homeowners policy is usually 70-75% of your dwelling coverage). In some cases though, valuable items like furs, jewelry, cameras, coin and stamp collections, musical instruments, silver and goldware may not be covered completely because they fall outside of the specific item coverage limits found on most homeowners policies.  Not to worry though, if this applies to your homeowners policy, there are additional coverage options available. You can customize your policy to protect what you cherish most. Jewelry insurance, or coverage known as scheduled personal property (SPP) or extended coverage on specific items or collections can be purchased.

What specifically does each kind of policy cover and not cover?

• Personal Property Protection
  • Applies to personal property owned or used by an insured person anywhere in the world (restrictions apply), and is subject to your policy's deductible
  • Covers sudden and accidental direct physical loss caused by a named peril, except as limited or excluded in the policy
  • Personal property located at a residence other than your primary home is limited to a percentage of your policy’s personal property coverage
  • Covers the personal property owned by a guest or a resident employee while the property is in a residence that the named insured is occupying

• Extended Coverage on Jewelry, Watches and Furs
  • Applies to jewelry, watches, gems, precious and semi-precious stones, gold, platinum and furs when written on the policy, and is subject to the policy's deductible
  • Covers sudden and accidental direct physical loss, including mysterious disappearance, subject to specified exclusions and any deductible
  • Coverage limit applies on a per-occurrence basis with a per-item limit
  • Generally, the coverage amount is not in addition to the amount of personal property coverage
  • You can also choose between item or blanket coverage.  With blanket coverage, you can insure a specific category  (i.e. jewelry or silver) for an overall dollar amount.  This is a good idea for folks with a lot of items that are of smaller values (e.g. $25000 of jewelry, but no one item is worth more than $2500).  Coverage for a specific item is written for a set dollar amount. Specific item coverage is usually used for pieces of larger value (i.e. an engagement or wedding ring or a watch)

• Scheduled Personal Property (SPP) Endorsement
  • SPP endorsement insures items against all risks.  The amount of insurance must be 100% of the current market value
  • SPP is outside the personal property limit on the rest of your policy
  • While certain limits and restrictions can apply, this coverage covers loss of or damage to the personal property of an insured person as scheduled for all risks, including mysterious disappearance and direct physical loss anywhere in the world.  However, coverage on fine arts, firearms and business personal property is limited to within the USA and Canada
  • SPP may be written with higher deductibles, which can be different than the deductible amount under the policy. Unless written as such, scheduled personal property is not subject to the policy's deductible
  • SPP coverage is usually more expensive than Extended Coverage but it can also offer more specific coverage to protect your valuables
  • What about pairs and sets, i.e. if you lose one earring from a pair, or one of your favorite candlestick holders from a set? If the item has been listed on a scheduled personal property insurance policy, it will either be repaired or replaced so that its value is restored to the value it had before the loss?  The policy can pay the difference between the value of the property before and after the loss

Got all that?  Maybe not.  Figuring out the appropriate personal property coverage can be difficult.  You’ll want to enlist the help of a knowledgeable insurance professional to help you figure out what’s best for your valuables.  This is especially important if you’re thinking about popping the question.  According to a recently released survey, 40% of men in a relationship say they plan to propose on Valentine’s Day. Make sure you give some thought to the perils that could befall that big beautiful engagement ring. Be sure to make the right decision regarding how to protect your bling once you’ve bought it and before you pop the question.  And if you’re on the receiving end, do some research to find the best way to protect that ring once you’ve accepted it joyously.

Be sure to look for our blog series on insurance reviews. As always, we welcome your questions and suggestions on the insurance issues that matter most to you.

Have you reviewed your home owner’s insurance policy lately?  If not, you’ll want to do so the next chance you get. Otherwise, you may find yourself in an unfortunate situation if you fall victim to a house fire, burglary or flood.  The best thing we all can do is make sure we have the coverage that’s right for us before we have a loss.  The high number of claims has made home owners insurance coverage more expensive than ever – but there are ways to ensure you receive value from your policy.  Make an appointment with your insurance agent to review your policy when it renews and re-assess your home insurance coverage whenever there is a big change in your circumstances (the purchase of an expensive item, a major remodel/reconstruction, etc.)

Your Home Insurance Coverage Review Check List

Here are the important coverage areas to consider when it comes to house insurance coverage.

Dwelling Coverage

Did you know that an underinsured dwelling can incur penalties? So, what’s the adequate amount of dwelling coverage?  It should be enough to cover the cost of rebuilding a home should there be a complete loss – but remember, it’s not based on market value, but rather on the replacement cost of dwelling not including land. This is why it’s so important to re-assess your policy especially if you’ve remodeled or renovated.   

Replacement Cost or Actual Cash Value

What if your dwelling and its contents get damaged or destroyed? Replacement cost coverage and actual cash value insurance will be there to protect you. This refers to the amount your provider will pay – Replacement cost coverage doesn’t deduct for depreciation while actual cash value insurance does.

Liability Coverage

Liability Insurance helps protect you against the financial uncertainty arising from injury (or property damage) that you or your family may cause to other people. It typically covers injuries whether they happen on or away from your property. If you don’t have enough liability insurance, then your assets could be at stake. The liability coverage on your homeowner’s policy helps you to protect your retirement accounts, investment in stocks and bonds, checking/saving accounts, home and other real estate equity. It is very important to discuss the assets you need to protect with your agent to determine the level of liability coverage that is right for you.

Do You Have an All-Risk or a Named Peril Policy? 

When choosing home owners insurance, you have these two choices. The primary difference between them is that a named peril policy covers what is "named" (included) in the policy while an all risk covers everything except what is excluded. Typically, an all-risk policy offers much more comprehensive coverage.

Contents Coverage & Personal Items

Don’t you just love your flat screen television, that mahogany dining room set, those designer brand clothes? What about your beautiful jewelry, piano or other personal items? The value of your belongings adds up quickly, so you should understand how much coverage you need and when or if an appraisal is required to adequately cover your personal property.

Other Structures on Property

While you’re right if you assume most policies automatically provide this coverage, you should be sure you’re adequately covered if you have a cottage, swimming pool or shed on your property.

Property Inflation Adjustment

Your insurance provider should automatically adjust your policy with building cost inflation, but do yourself a favor and double-check this. You may see a minimal annual increase to adjust for the rising replacement cost coverage. \

Building Ordinance & Water Sewer Backup

If your home is older than 25 years, building ordinance coverage could be very important. If a local building ordinance calls for the destruction of the dwelling, your insurance company may deny paying for increased costs or demolition expenses incurred. You may also want to consider water and sewer backup coverage.

Policy or Coverage Changes 

Has your insurance company changed your policy or coverage? They are required to contact you when this occurs, but in the event you missed their notification, you should check on this from time to time.

New Discounts

Always review all eligible discounts because this is an easy way to cut down on the expense of your home insurance coverage.  Also, consider adding a protective device like an alarm system or adjusting your deductible for increased savings. 

Your insurance agent will always be there to help you with your home insurance.  Staying educated about your house insurance coverage is the best way to get the most out of your policy, so don’t hesitate to go to your agent with questions. The worst thing to do is to just “set it and forget it.” And remember to never assume you’re fully covered just because you have home insurance coverage.

Keep an eye out for part two of our blog series on insurance policy reviews; we’ll be discussing what to look for when you review your auto policy.  We welcome your suggestions or questions on the insurance issues that affect your life.

We hope that we can protect ourselves and our families from many of life’s uncertainties with quality insurance. But are we really getting the most out of our policies? The fact is, just because we have insurance doesn’t mean we’re fully covered.  Are you prepared? Unless we take the time to review our policies periodically, we could end up with a big surprise when we need to file a claim.  

Because the importance of reviewing insurance policies cannot be overstated, we are launching a series of blogs that give you an inside look at what to consider when reviewing your insurance coverage.

How to Review Your Insurance Policies

Step One – Partner with a Qualified Insurance Agent

Get the best coverage by partnering with a licensed insurance agent to help you with your insurance planning.  Some may see insurance as a commodity, but advice is not.  With insight and expertise, a qualified insurance agent has the product knowledge to build a custom plan that works best for your lifestyle.  

Step Two - Review Coverage

Do you understand the coverages on your policy? Are there any gaps in these coverages?  Are you getting all applicable discounts? 

Step Three – Consider Your Circumstances

Has your life changed recently?  Have you made some big purchases, switched jobs or added/changed family members?  Help your insurance agent get you the right level of coverage by keeping them informed.

The first blog in our insurance review series will give you insight into how to review your home owners insurance coverage.  Blog two will delve into the depths of reviewing your auto policy coverages.  Let us know your questions, and feel free to suggest additional insurance coverages you’d like us to feature.