If you have antiques, jewelry, furs, expensive artwork, silver or other valuable collections in your home (or even just one valuable piece), you need to review your homeowners insurance to be sure that you have enough coverage.
Special Personal Property Coverage
Homeowners insurance covers a person’s home and its contents. Personal property coverage is the part of your homeowners policy that applies to your possessions while you are at home or away. Your belongings are covered only against “named perils” as outlined in the policy (usually wind, rain, hail, fire, theft). Losses due to earthquakes, floods, war and certain other perils are excluded from coverage.
Homeowners insurance policies typically cover personal property for either 50% or 75% of the dwelling insurance amount. So, if your dwelling is covered for $300,000 and your personal property coverage is 50% of that, you will have $150,000 in personal property coverage. If you have high-value items in your home, you will likely find that this coverage limit is not sufficient.
Jewelry, for example, is covered under the personal property portion of your homeowners insurance policy. Insurance companies usually group certain kinds of items into categories and assign a maximum coverage limit that you can be paid to replace those items in the event of a covered loss. Within the overall personal property coverage limit, your insurance company may limit your jewelry coverage to $1,000 per piece of jewelry and $2,500 for all of the jewelry in your household. If you have a piece of jewelry that is worth $5,000, you will not have adequate coverage.
Similar category limits likely apply to your other high-value items as well, including furs, artwork, silver and so on.
There are two ways to increase the coverage limits on high-value jewelry or other valuable items in your home. First, you can increase the “special limits of liability” for the particular categories in which you have more valuable items, such as increasing the entire jewelry category limit from $2,500 to $5,000.
Most insurance companies will increase the limit on any category of covered items in $1,000 increments, but there will likely be a ceiling to which you can raise the limit.
You can also use a scheduled personal property rider to increase the coverage limit on a certain item. This is advantageous because it provides all-risk coverage—meaning that the item is covered for all risks, not just the “covered perils” outlined in the main homeowners policy. In addition, scheduled personal property is typically not subject to the deductible.
In the case of antiques and certain other collectibles, your needs will depend on the extent of your collection. If you have a few valuable antiques or collectibles in your home, you can most likely cover them sufficiently with a scheduled personal property rider just like your high-value jewelry or other items. If you are a serious collector, you have a lot more to consider.
If you have an extensive art or antiques collection or certain rare collectibles, you may want to purchase your homeowners insurance from a company that specializes in insuring high net worth individuals or that has expertise with insuring art or antiques. We have access to these insurers and their experts who can work with you to protect your collection and give you peace of mind.
Remember that the cost of your jewelry or any other valuable items may change over time. As the replacement cost value of your home increases every year to account for inflation or building costs, so might the value of your scheduled personal property. Gold prices, for example, have skyrocketed over the last decade; perhaps the value of your jewelry has, as well. Jewelry should be re-appraised every 3 – 5 years and your policy should be adjusted accordingly. Likewise, antiques, artwork, silver and other collectibles should be appraised and inventoried regularly, and your insurance policies adjusted.
All of your valuable possessions should be kept safe and secure at all times, to reduce the likelihood of a loss.
We can help you find the right coverage for your valuable personal property. What special items do you need to insure? Do you think your current coverage is sufficient?