When it comes to insurance for your most valuable possessions, don’t assume these expensive items will be covered by your standard homeowner’s or renter’s insurance. Homeowner’s insurance often has low limits with regards to valuables, as little as $1,000 to $2,500 per common category such as silver, jewelry, artwork, or collectibles.
So how do you safeguard your most valuable possessions? There is a simple solution – purchase a stand-alone valuables policy and insure your MVP’s for their full value. That way, you are not restricted by the low dollar limits of your insurance in the unfortunate event your items are damaged or stolen.
Here is a short list of MVP items commonly our team of daily money managers sees insured on a valuables insurance policy:
- Jewelry and Watches
- Musical instruments – like a baby grand piano
- China, Silver, or Crystal
- Wine & Spirits collections
- Sports Memorabilia
- Antique furniture
Purchase a Stand Alone Policy
Are you wondering when is it the right time to purchase or increase the items on a stand-alone valuables policy? Imagine, just for a brief moment, one of your valuable items is damaged. Would you want it repaired or replaced? Are you willing and able to pay out of pocket for this to happen? If you answered Yes, then No, now is the time to purchase a policy.
Regardless if you acquire a single expensive item like a diamond engagement ring or accumulate several items, it’s easy to exceed the low home insurance policy limits. So regardless of how and when you are exposed to the risk of loss.
Some stand-alone policies tend to have higher deductibles, while others are zero. Asking your trusted insurance advisor to set a deductible that is right for your budget and collection.
What’s more, if you make a claim for your valuables against your homeowner’s policy, the insurance company does not differentiate that claim from a stolen artwork or a roof replacement claim. The result? Your policy rates increase due to the claim on a potential dollar value dollar item. Instead, if you suffer a loss and the claim is filed against a valuables policy, it protects your home insurance claims history. We covered why you’ll want to limit homeowner’s insurance claims in our recent post.
Blanket vs. Itemized Coverage
Blanket coverage, which provides a certain amount of insurance coverage, for each property category. It’s the most efficient type of valuables coverage, easier to write for the agent and you because it requires less data. However, there is inherent risk involved with selecting blanket coverage. Your insurance company will likely pay out a claim at a rate lower than the actual value of your item. This is not ideal if your items are one of a kind – such as a custom-designed jewelry piece or an original artwork.
Itemized coverage is better because it requires documentation and detailed item descriptions. Selecting this coverage means there is more work up front, gathering item details and receipts, and it is more likely you’ll recover the worth of the item lost or damaged rather than the insurance company finding a similar item with a lower value.
Be sure your item description is correct so that you can claim the full benefit. For example, labeling an item as a “WG ring” is not enough. However, if you label it as “WG ring with one 1.24-carat VVS1 marquise-cut center diamond,” you’re more likely to recover the full value of your beloved item.
Itemized coverage requires items valued at over $10,000 must have had an appraisal within the last three years. It also requires period reviews of pieces you’ve listed to ensure you still own the items. If you add more items to your collection, add them to your policy as well, and have the purchase receipts readily available. This might allow you to avoid the cost of an appraisal.
Deciding whether to repair or replace the item, from the source of your choosing or have the ability to simply keep a cash settlement payment. Be sure to ask your insurance agent if your selected carrier offers these options.
If your possessions are worth more than what your homeowner’s insurance will cover, purchasing a stand-alone insurance policy is the best thing you can do to cover the value of your expensive personal assets and protect against heartbreak from a loss.
At Organized Instincts, our seasoned team of daily money managers works with you and a licensed insurance agent to select the best valuable insurance policy, from gathering purchase records to requesting an annual coverage review. Schedule a free consultation today to learn how our daily managers are an invaluable asset in protecting your MVP collection.