Make Certain to Insure the Finer Things in Life

Do you own high value insurables such as coin collections, jewelry, furs, and collectibles? If so, it may be wise to develop a well-thought out strategy regarding the risk of loss or damage to the finer things in your home.  Most homeowner’s policies limit the amount of coverage for luxury items, and an additional specialized policy may be required.

These specialized policies or “floaters” are designed to cover valuable items at a pre-determined dollar amount as scheduled in the policy. If you prefer, your insurance company might be willing to cover your high value items on a blanket basis at an agreed upon value per type.  For instance, if you own quite a bit of fine jewelry, and you are comfortable with insuring all of it on an aggregate basis, you might agree upon $100,000 as the coverage amount.  If your home is decorated with antiques and you own fine china, check to see if your policy includes accidental breakage and if it needs to be scheduled.  Under a typical homeowner’s policy, such breakage would not be included.

One of the benefits of a floater is that it usually does not include a deductible, so you are covered from the very first dollar of loss.  Furthermore, floater policies are often written on an “all-risk” basis.  As such, unless the peril is specifically excluded, losses are covered for all perils regardless of whether or not they are named.  Another attractive feature of floaters is “mysterious disappearance” coverage.   Although many policies, especially inland marine policies, do not include mysterious disappearances of items, these floaters often will.  As you may surmise, mysterious disappearance involves a loss where the cause is unknown.   

The way you approach risk management will be a key element in the process of insuring your valuables.  If you show a strong commitment to minimizing loss, most insurers will take your loss prevention strategies into consideration when pricing your coverage.   For example, if you have a Monet hanging on your living room wall, and no alarm system, you should expect to pay a high price for coverage.

Some insurers will help you formulate your risk management plans by assisting you with the inventory process. It may be necessary to coordinate a third-party appraisal – a vital element of the risk management and insurance processes.  In many cases, insureds underestimate the value of their own property, and consequently underinsure the property.  A knowledgeable appraiser can offer assistance in assessing the value of your property, and can provide mandatory documentation of the value if you experience a loss.

Below are some guidelines to ensure proper coverage:

1.      Take inventory of your most valuable items.  Don’t forget about less obvious valuables such as the autographed Pele soccer ball sitting on your book case. It may be worth more than you think!

2.      Schedule an appraisal of special items, and be prepared to enlist the services of more than one specialist.  For example, you wouldn’t hire the same appraiser for the Pele soccer ball as you would for a piece of antique jewelry.

3.      Discuss the possibility of floaters with your insurance agent.  Learn what coverage and limits are available, and compare the coverage to your basic homeowners’ policy in order to fully measure the value of the additional coverage.

4.      Ask your agent what services they offer, in addition to the coverage they provide.  If they can help you in the conservation and preservation of your valuables, and if they bundle these services in a cost-effective manner, it may create a win-win situation.  If you take advantage of all your agent has to offer,  they will also benefit from a loyal client who will hopefully be with them for many years to come.

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