Whether you’ve received expensive jewelry, new technology, a vacation, or some other valuable gift, you should contact your insurance agent to make sure you have adequate coverage to protect them.
What Does My Homeowner’s Insurance Policy Cover?
Your typical homeowner’s insurance policy covers items such as your TV, furniture, and other household goods up to the limit of your policy. It protects you from damage or loss from standard perils such as a house fire, theft, and vandalism. These are known as “named perils.”
However, you should review your policy with your insurance agent to ensure you have sufficient coverage. Over time, most homeowners accumulate new items and they may need to increase their policy limit to make sure that they’re protected. They may also recommend an all-peril policy, if you want more extensive coverage.
All-peril policies cover all damage to your possessions, unless they are specifically excluded from your policy. These can include claims for things such as accidentally knocking over your TV or burning a hole in your expensive coffee table with a candle. However, all-peril and standard policies do not provide much, if any coverage for some expensive items.
Limits for Valuable Items
Homeowner’s insurance policies have specific limits for valuable items such as jewelry, fine art, ornate rugs, precious metals, coins, cameras, firearms, furs, antiques, and other collectibles.
They may also have low limits ($1,000 to $2,000) on things such as cash, musical instruments, stereo and computer hardware and software, mobile and gaming devices, sporting equipment, and bicycles. If you an enthusiastic collector or you own expensive items, your homeowner’s insurance policy may not offer sufficient coverage.
Limits, coverage, and costs vary depending on what you’re insuring, where you live, and the insurance company you choose. Review your policy with your independent insurance agent to understand what’s covered and what’s at risk. They can point out potential problems such as theft exclusions for electronic equipment such as smartphones, tablets, and laptops or a high deductible should you need to file a claim.
Increasing Coverage
Two ways exist to increase coverage. First, you can either increase your policy’s liability coverage. However, this option isn’t optimal. Even if you increase the policy limit, it might only allow you to claim up to a certain amount for each item. These “special limits of liability” restrict the maximum payout per item, even if the item is worth more.
Second, you can schedule items on a rider or special endorsement. A rider provides added protection for these expensive items beyond your standard policy for things such as accidental loss. These policies often do not have a deductible, either.
Your insurance agent can tailor your coverage to account for value shifts and inflation, too. You can also buy coverage to protect jewelry if you store it in a safety deposit box, and only wear it on special occasions.
Coverage Values
Coverage relies on an appraisal to determine worth. If you did not get an appraisal when you bought the item, you’ll pay a small fee to have an expert evaluate it. If you have a receipt, this often suffices for insurance purposes, but get an appraisal if you bought a discounted item as the item may have a higher appraised value.
The Insurance Information Institute and other insurance experts highly recommend homeowners create and maintain a home inventory with visual records. It provides the information your agent needs to tailor your coverage, simplifies the claims process, and substantiates losses after a catastrophe.
Don’t put your precious items at risk. Discuss your needs with your independent insurance agent to discover affordable solutions. They work for you and have the industry knowledge and resources you need.
