Do you need to insure your valuable items on a separate insurance policy?
Insuring valuable items on a separate policy is a relatively inexpensive way to ensure you have coverage in the event the valuable items are lost, stolen or damaged. These policies are most often called, a Personal Articles Floater or a Personal Articles Policy. The purpose is to insure the items at an agreed value with a low deductible or no deductible at all.
A separate insurance policy is perfect for a college student bringing valuable items to school.
What is considered a valuable item?
Jewelry, fine arts, computers and iPads, bicycles, expensive cameras. These are the most common items that are insured on a separate policy.
Doesn’t your Homeowners policy provide coverage for these things?
Yes it does. However, there are a few major negatives to not having a separate policy. If you go through your Homeowners policy….
- You are subject to the Homeowners Deductible. This could be as low as $250 or as high as $1,000 or in some cases even higher. With a separate policy, in most cases the deductible is ZERO!
- You will lose your Loss Free Discount. If you are receiving a Loss Free Discount and you submit a claim you will lose the discount. I have seen the discount as high as $400. You WILL lose that discount if you submit a claim and it is paid for any reason.
- There are limits on your policy. For example, our most common Travelers Homeowners policy offers a limit of $3,000 to an insured if their jewelry is lost or stolen. This means you can not collect any more than that amount for lost or stolen jewelry.
- You now have a claim on your record. Just one claim makes it difficult to find a competitive price if you shop your policy with other carriers.
We had an Insured a few months back that had about $7,000 worth of jewelry stolen from her house. The thief was a neighbor who was able to get in the house while the Insured was not at home. By the time our Insured realized the jewelry was missing the thief had pawned all of it.
The neighbor was caught and arrested but the money or jewelry has not been recovered. She did not have the jewelry insured on a separate policy. Therefore, she was only able to receive $3,000 from Travelers. She did not have to pay her deductible because the amount of jewelry stolen exceeded her policy limit. But she did lose her loss free discount.
The Insured inherited the jewelry from her mother a few years ago. If you inherit jewelry or if you make a big purchase, like an engagement ring or computer or something else with high value, be sure to let your agent know.
What is the Cost?
I live in the suburbs of Philadelphia. For $5,000 worth of coverage for jewelry, the cost is $60 for the year. $120 for ten thousand dollars worth of coverage. In Philadelphia, the cost is $85 for the year for $5,000 worth of coverage. That is the cost for a policy with a zero dollar deductible. Read this post if you are looking for ways to save on your Homeowners policy. This one may help too.
A separate policy for your high value items is a no-brainer. The cost is minimal and the things you are insuring have a lot of meaning to you and will need to be replaced if they are lost, stolen or damaged. In some cases, like electronic devices, receipts will be sufficient to prove the value. In cases like jewelry, antiques and fine arts an appraisal may be required.
by Keith Laskey
For more information or quote, contact us at 713-515-5774.