January 19, 2016
How to insure valuable items
How do I insure high value items on my insurance? Homeowners Floater Endorsements for High Value Items.
What is a high value item exactly? Who should insure them valuable items? What are the decisions you need to make?
Should you insure your ring?
Your typical homeowners insurance policy (all that I know of) cap how much personal property coverage you have, in addition, they place caps on dollar amounts for specific ‘high value’ items that may be targeted by thieves. These include, but are not limited to: jewels, jewelry, gold, silver, coins, cash, securities, wine collections, silverware, art, guns, wine, collections of most and or all kinds (baseball cards, comic books, etc) and other high value items. Your insurance policy will delineate a more thorough list. The language and definition of these vary greatly from one policy to another on exactly what is considered a high value item, so it is imperative that you speak with your independent insurance broker about you items and your insurance policy. Therefore if you do not schedule valuable items than you will most likely not be fully covered for them.
“If you do not schedule a valuable item than you may not be covered“
How to start insuring valuable items?
You should start off by walking around your house, look on your walls, in your cabinets, certainly in your safe and any safe deposit boxes that you have. I suggest to my clients to be on the lookout for items that cost more than about $1,000 US Dollars. With some policies it can be lower, perhaps only $500. Ignore most of the stuff that is built into the house, such as the jacuzzi, washing machine, water heater – those type items should be coverage under your insurance’s main coverage. The obvious things are Expensive TVs, Personal Computers, and Cars. Your Car is a separate story, your computer may or may not be covered depending on how it is used and what is considered to be a normal computer system. Computer’s owned by the company that you work for, most likely would not be covered. Your typical television that you bought at best buy would be covered, although if it were an elaborate or unique system, I would recommend that bring it up with your agent.
Next up you may start to notice: Your spouse’s engagement ring, art hanging on the wall, the ornate special silverware you never use, an antique gun, gold coins, a large pile of US Dollars in a safe deposit box, an old baseball card collection.. You might take notice of an antique hanging on the wall or a sculpture in the corner of a room. All of these things are probably going to require a special line of coverage either added to your homeowners insurance policy or written under their own monoline policy.
“Only items that you and your spouse own are covered“
As previously stated, only items that you and your spouse own are covered, items that are stored at your home for your friends, are most likely not covered. Items owned and used by you from your employer are typically not covered. Items that you cannot prove that exist or that you own can not be covered.
Evidence for Insurance:
After identifying these items, I suggest that next you go out and locate evidence that they exist. The receipt is generally a great place to start. If you cannot find the receipt, a copy of the credit card bill ‘may’ suffice. Next take pictures of the items immediately, store those pictures somewhere secure and back them up, preferably to the cloud. Next up –The gold standard is an appraisal document done by a licensed appraiser. (OF note here, check with your insurance company on the credentials your appraiser may need to appraise items for them to consider coverage.) You may need an appraisal if the item is a real high value item. This value is set by your insurance company and their coverage form, it may be $1,000, and it may be $5,000 its really depends. Ask your insurance agent if an appraisal will be needed.
Once you have indexed your high value items, have collected evidence of them, you should contact your independent insurance agent to review them with the next steps. Your insurance agent will be able to tell you which items are automatically covered (in other words – items that do not require an endorsement)on your existing homeowners policy and which items will need to be covered under a floater or endorsement to your policy. At this point your insurance agent should provide you a quote for additional coverage insurance after discussing with you some of your options.
Is that gold watch covered?
Two Decisions to insure your valuables:
First off, you will need to decide if you need/want coverage to be scheduled or non scheduled coverage to your homeowners policy. What is schedule coverage? Scheduled coverage will list the exact item that is being insured. Typically they will require proof via appraisal or such. Non Scheduled or Blanket Coverage is typically just written on a specific dollar amount. That dollar amount may have a unit sub limit. A Blanket insurance policy will be open to certain items that are with in the sub category.
Second, you may want to consider, in certain high value item situations a stand alone (mono-line) policy for coverage. At the point that the floater costs as much as the actual home to insure, this can often may make sense. As with all insurance I suggest that you check the credit rating of this company and look them up online. For many the time that it takes to research, buy, and keep a standalone valuable items policy is not worth it. For others, it can well be worth your time.
Insure your valuable items carefully:
When shopping for coverage it is important to note that some insurance riders contain coverage for a replacement item and some provide coverage in cash form. Which would you rather have? The replacement coverage is typically considered inferior, although not all people will care. Replacement coverage allows them to replace a ring to an an exacting similarity as the original (you probably will not be able to tell) – however, it will not (necessarily) be from the maker that you originally had it from. In other words, that Tiffany branded ring may be replaced by one from Bob’s jewelers. A cash policy would make you whole again, by sending you a check either directly to the jeweler who replaces it or possibly even you directly. Then again, however, just because you have the cash does not mean that your work is completed.
“some insurance riders contain coverage for a replacement item and some provide coverage in cash“
With the rise in the price of precious metals, jewels, and simple commodity and labor inflation, I suggest that clients get their goods reappraised often. Why? Its a pretty complicated discussion to review in an online blog post, but the simple answer is because something that was valued at $10K may 15 years ago be valued $20K today, perhaps less. None the less, owning insurance coverage for something that is either way too little or way to much can be like throwing money out the window, and who wants to do that? How often you should get jewelry and the such reevaluated is a debatable question. I suggest that you speak with a licensed appraiser to get a good answer on it. It may depend on the product that you are covering. If you have any doubt as the rise in cost of certain sorts of jewelry, art, or other, I suggest that research it a bit. Look at this chart on the value of diamonds over time.
Keep in mind that coverage for valuable items is always for things that YOU, your spouse, and potentially immediate members of your family own and can document exist. They should not be used for items owned by close friends that may be stored at your home. They should probably not used for items owned by your business, unless disclosed to the insuring company. There are numerous other restrictions that exist. Also, as a general rule, the more expensive an item is to purchase, the more expensive it is by insurance rate. In other words, what may cost around 1.3% on a $5,000 item, may cost you 1.8% on a $50,000 item. There are other rating factors such as past claims, location, security sytems, etc. Credits may be given for security systems, manned security, and bolted safes, it will depend on the insurer. Insure your valuables very carefully.
Please feel free to reach out to me with any questions that you may have about insuring high value items.
Marindependent Insurance Services LLC – CA License 0K10734 – Independent Insurance in Marin County, California.
Phone Number 415-294-5454 – Term Life, Home, Hard to Place Homes, Auto, Umbrella, and yes Valuable Items Insurance
Please read our disclosure. Reading about home, auto, umbrella, business, and life insurance is no replacement for speaking with a license insurance agent in your area.
