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Insure Your Valuables Separately On Your Homeowner’s Insurance

By Erik Folgate

Unfortunately, not only does the holidays bring out the best in people, but it also brings out the worst in people. Crime tends to rise over the holidays, especially thefts. Thieves know that many of you will be out of town this holiday season. Will you be going out of town this holiday season? If so, your house could be a sitting duck for a burglar. Your insurance agent might have told you that your homeowner’s policy covers all of your personal contents. It does, for the most part, but some items are limited. Here is a list of some of the items that insurance policies put a limit as to how much they will pay for replacement.

Generally, insurance polciies will not pay more than $1,000 to $2,500 TOTAL for items in these categories:

  1. Jewelry
  2. Fine Art
  3. Fire Arms
  4. Rare Coins and Stamps
  5. Trailers
  6. Fine China/Silverware

Oh and by the way, that’s not $1,000 per item, that’s $1,000, TOTAL. So, essentially, your entire collection of jewelry is only covered for $1,000 to $2,500 by default. Some policies will allow you to buy more coverage for jewelry, fine art, and other categories, which is a good idea, but you should also pick out the five to ten most expensive items that fall under those categories, and pay for a separate rider attached to the policy.

What You Need To Do:

  1. First, pick out those items that you want to pay separately to have insured.
  2. Then, get qualified appraisals for jewelry, fine art, coins, and stamps. Find your receipts for firearms, fine china, and other items that do not necessarily get “appraised”.
  3. Call your agent that sold you the policy and explain to them that you want to add a “personal effects rider” or “schedule an item” on your homeowner’s policy. They’ll be happy to do it, and make sure you get a quote for what it will cost given the amount you want to schedule it for. Generally, it’s about $1 per month of premium per $100 of value, but some items can be about $2 per month per $100 of value.

What You Get:

When you schedule an individual item onto your policy, you get true, 100% coverage. Did you know that losing your wedding ring isn’t covered under your policy by default? Many people file claims for lost jewelry, because they were told they had coverage for their personal contents, and they find out the hard way, that unless they buy an endorsement to cover their personal contents for ALL PERILS, then they do not have coverage for lost items.

You will also get coverage UP TO the value of what your scheduled the item. So, you may have scheduled an item for $2,500, but that doesn’t necessarily mean you’ll get the full $2,500 for it. An insurance company will determine the replacement value, regardless of what it’s scheduled for. It comes up close to what your scheduled it for, then they’ll just pay the scheduled value. Having said that, it’s still a much better deal to schedule your most loved and expensive items that sit in your home, because those will be the biggest targets for burglars.

I’ve adjusted hundreds of theft claims, and I have customers literally crying on the phone when I have to explain to them that they’re only going to receive $1,000 for all of their jewelry or fine china. Don’t be that person, and spend the extra couple hundred dollars a year to receive full coverage of your most expensive possessions.

Erik Folgate
Erik and his wife, Lindzee, live in Orlando, Florida with a baby boy on the way. Erik works as an account manager for a marketing company, and considers counseling friends, family and the readers of Money Crashers his personal ministry to others. Erik became passionate about personal finance and helping others make wise financial decisions after racking up over $20k in credit card and student loan debt within the first two years of college.

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