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?
- Musical Instruments
- Fine Art (such as oriental rugs and paintings)
- 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.