“I don’t feel like keeping it anymore,” explained my mother, standing on the steps outside my back door as she pushed a polished wooden case into my arms. She turned and started back to her car. “It’s been sitting in our closet and I haven’t used it for years. Enjoy!”
She’d been spring cleaning and had stopped by my house to “gift” me the family silver. Though I was happy to receive it, the matter was not necessarily because she was being generous. Whenever my mother gets into one of her cleaning moods, no one stands too close to a trash can or they may find themselves in it. Passing on the silverware simply meant she now had a bit more guilt-free closet space.
But as an insurance agent, I’m cursed with pragmatism. Now I was the one entrusted with the family silver. Did people still use this stuff? What would happen if it was stolen? My next thought was Is this covered by my homeowners policy?
Special Coverage for Special Items
Homeowners insurance provides solid, broad protection for your home and belongings. But broad coverage does not mean all contents of the home without limit. Individual items or collections of high value ought to be considered separately to ensure adequate coverage exists. Below are a few common limitations.
This category can include cash, coins, bank notes, stored value cards, and similar items. This includes cash at home or while traveling; the policy limit is typically only $200.
Includes gold, bullion, silverware, platinum, and medals. Like the money category, the limit of liability is usually $200.
Items such as securities, deeds, passports, and other written legal items. The usual limitation is $1,500.
To be clear, a homeowners insurance policy provides coverage for watercraft in a VERY limited capacity. Think canoes, kayaks, and small boats. Some policies stipulate a maximum horsepower rating which is usually only 25 HP, so read your policy and obtain boat insurance if needed. However, for the small watercraft covered by a homeowners policy, the limit is usually only $1,500 in total.
Jewelry, Watches, Furs, and Precious Stones
The limit of liability for these items is frequently $1,500 in total.
Loss by Theft of Firearms, Silverware, Goldware, Platinumware, or Pewterware
This category is limited to $2,500 in most policies. Notice some of these items are already listed in previous limitations. However, the difference here is the loss by theft is usually a slightly higher limit. Thus, if a house were to burn, the silverware may be protected only up to $200. But if the same silverware were stolen, it would be protected up to $2,500.
Business Property or Contents
A homeowners insurance policy is not designed to protect business property or business operations. These risks should be covered through standard business insurance or through a home-based business endorsement. Limits on items used for business purposes is $1,500 to $2,500. Reference In-Home Businesses Not Covered by Homeowners Insurance.
The good news is all these items can find better protection through scheduled property coverage. Clients often also request increased coverage for art collections, wine collections, antiques, medical devices, and electronics. While homeowners insurance provides some protection, having supplemental coverage for special items provides thorough coverage.
What is Scheduled Personal Property?
When your need to insure high-value items exceeds coverage provided by your policy, you can either A) schedule (list) the items on your policy individually, or B) obtain a separate scheduled personal articles policy. The latter option is sometimes termed a personal articles floater. Either method requires the high-value items be listed along with their individual coverage limits. To schedule an item requires a receipt or appraisal for each. In this manner, coverage extends beyond the standard protection provided by homeowners insurance.
Advantages of Scheduled Coverage
Scheduling each item costs more but offers broader protection. This is because the schedule covers losses of any kind, such as damage due to dropping a ring, or misplacing a watch. Additionally, a deductible does not apply. Only a few causes of loss/damage are excluded, such as wear and tear or similar deterioration. As always, be informed and read your specific policy terms or ask your insurance agent.
The Third Option
A third option is to increase coverage levels on certain categories, negating the need to list items separately. Not all insurance companies provide this option, but it is popular among those specializing in private client insurance. For example, Chubb can insure a client’s fine art up to $100,000 or more without a need to schedule individual items. The challenge of this approach comes at the time of a claim, creating a list of items after the fact and proving their worth.
So, should your mother drop the family silver on your doorstep, or you enjoy collecting high-value baseball cards, or granddad wills you his mint condition Parker side-by-side, ensure these items are covered. For questions, visit Home Insurance or Contact your Bankers Insurance agent. We will help determine your risks and advise how to cover them. Not a client of ours? Let us compete for your business! Each of our clients is assigned a personal insurance agent and provided their email address as well as a phone number that rings right on their desk.