The specific protections offered under your homeowner’s insurance policy are very important. All policies include dollar limits on valuable possessions as the insurance company must assume more risk.
However, insurance companies offer homeowners the option to “schedule” their valuables. In other words, you can increase your coverage on these items to ensure they’re adequately protected.
Limits of a Standard Homeowner’s Policy
Every policy differs, but generally insurance companies limit the dollar amount they’ll pay per high value items and the total amount they’ll pay under an asset category. Your policy may include limits on the following items, and more:
- Antiques, Art, & Collections
- Electronics, including computers, laptops, & cellphones
- Furs & Jewelry
- Music, Photography, or Sporting Equipment
- Precious Stones
As an example, your policy may include a $1,500 sub-limit on jewelry, even though your personal property limit is much higher. If a thief steals a ring worth $5,000, the insurance company would only pay $1,500.
Fortunately, scheduling valuables increases the limit so you’re better protected in many ways in addition to value.
Benefits of Scheduled Valuables
When you choose to schedule valuables it provides more coverage for more risks and may increase the coverage limits on specific, high-value items.
It may cost a bit extra, but offers broader protection such as accidental loss, which is not offered under a standard homeowner’s insurance policy. If you drop your wedding ring down the drain, your policy protects you.
Scheduled property coverage does not involve a deductible either. Generally, when you file a claim under your standard homeowner’s insurance policy you pay a deductible and that amount comes straight off your insurance company’s check.
Also, scheduled property offers compensation for the replacement value of the item. Conversely, a traditional homeowner’s insurance policy offers actual cash value, or replacement cost less depreciation.
Some items depreciate very quickly which could lead to poor compensation for a costly item. Other items such as antiques or collectibles appreciate and without scheduling these items you could receive less than their value.
Doesn’t Raising My Liability Limit Suffice?
You might think that raising your overall liability limit through an endorsement or rider on your homeowner’s insurance policy is a simpler solution and less expensive. However, typically the limits for individual pieces and overall losses still apply.
For instance, your policy may limit a claim for the loss of a piece of jewelry to $1,500 and your overall losses within that asset category to $5,000. If your wedding rings are stolen and each is worth $5,000, they would only pay $1,500 per item.
If thieves steal your entire jewelry collection, they would only pay $5,000 even if it is worth $20,000.
Importance of Determining Value
Scheduling expensive items requires an appraisal. As mentioned, some items appreciate in value, but you also need an accurate value to ensure your policy provides full replacement cost. Discuss coverage with an independent insurance agency like ours. We can recommend a professional appraiser and they’ll tailor your “floater” to protect your belongings well. You’ll also avoid unnecessary costs as we’ll review your policy regularly and realign it as values chan