Many people buy expensive items, but don’t consider their insurance needs. They just assume their homeowners, renters or condo insurance policy provides sufficient coverage. Unfortunately, this isn’t necessarily the case.
Standard Policy Limits
Most insurance policies limit coverage on expensive items. As an example, a standard homeowners insurance policy in New Jersey may provide coverage of up to $2,500 on silverware and $1,000 on jewelry.
So what happens when your $10,000 engagement ring disappears? Will the insurance company pay out more? The answer is no. They’ll pay $1,000 if your ring was stolen. However, many policies will not even pay that if it is an accidental loss. Fortunately, you have many other options available to you for protection.
What Items Require Additional Coverage?
All insurance policies differ, but generally the following items may require additional coverage since their value typical exceeds a standard policy’s limits:
- Antiques
- Collections – stamps, coins, memorabilia, fine wines
- Designer appliances
- Fine art
- Firearms
- Furs
- High-end carpets
- Jewelry
- Musical, computer, photography, and sporting equipment
- Silverware, fine crystal, china
Inventory Belongings
Your agent or broker needs a list of what you own if they’re to properly align insurance with your needs. Most insurers strongly suggest you prepare a thorough home inventory to itemize your belongings.
Home inventory apps allow you to add descriptions, serial numbers, photographs, receipts, and comparable values from the internet. However, the current market determines the values of some of the expensive items mentioned above and consequently they’ll require a professional appraisal.
Your agent can point out which items need appraisals and they may also be able to refer you to specialized appraisers for your specific items.
Explore Insurance Options
Once you have determined the value of your belongings, you have several options. The first is an endorsement on your homeowners insurance policy.
Typically, an endorsement has a lower deductible and higher coverage limit than the policy itself. It may also provide additional protection such as “mysterious disappearance” of insured items.
Another option is a blanket endorsement. This provides coverage for an entire collection for a total overall amount. While this may seem convenient, each item in the collection has a set limit such as $2,500.
Items worth more than $10,000 and collections worth more than $50,000 may merit a valuable items policy. It provides higher limits and protects against more perils. These policies often provide worldwide coverage and can be expanded to include coverage for breakage.
If you only own one portable item such as a piece of jewelry, floater insurance may be the solution.
Rely on Expert Advice
Insurance agents do all the legwork to find the best possible coverage at the most reasonable cost, plus they’re insurance experts. Insurance is a complex industry and not all policies provide the protection you might need such as breakage coverage or replacement value.
Let them suggest which coverage types best protect your belongings. They can explain the differences between policies in simple language so you understand precisely what you’re buying. They can also review your coverage annually to prevent insurance gaps.
It just doesn’t make sense to go it alone when working with an insurance agent offers so many benefits. Speak to your agent and protect your prized possessions properly.
