Valuables: How to Insure Them The Smart Way

Do you have fine art, jewelry or other valuables in your home?

If the answer is “yes”, then you probably need to consider additional insurance for them, because your basic homeowner’s policy probably has limitations on how much it will cover, particularly in the event of theft.

Additional coverage for valuables comes in two major forms. One is to insure items individually with their own additional floaters to your home owners insurance policy. The other is to buy broader blanket coverage for each category of valuables, say jewelry, art, wine or collectibles. With the more expensive first option, you need to schedule, or list, each item individually, while with the less expensive blanket coverage, you don’t.

So which option is right for you?

Despite the higher price of scheduling and the fact that it often requires that you have your items appraised, scheduling has its advantages. If you have very valuable items, it’s better to list them.

Let’s say that something happens to your house, like a fire, scheduling reduces the chance of arguments you may potentially have with your insurance company over what exactly was in your house.

Regardless of what type of homeowner’s policy you have, clearly you should have a written inventory of what’s in your house along with proof of what those items are worth. If you didn’t schedule the items in the policy, you would still have to present this proof to the insurance company.

With scheduling, the proof is right there in your insurance contract, which forces you to have your documentation in order before anything happens. Scheduling costs a little more, but at least you have the comfort of knowing there are not going to be disputes if you have a serious situation like fire, hurricane or something that destroys your property.

There are also additional advantages to scheduling. Because you often have to get items appraised to get them scheduled, this approach makes sure you get the right amount of coverage for an item.

Plus, with scheduling, you get what is called “mysterious disappearance” coverage. As a result, you’re covered if an item goes missing — for example, if your diamond falls out of your engagement ring. In addition, such policies often cover up to 50 percent over and above what you paid for the item, if the item has gone up in value.

For these reasons, I would only recommend blanket coverage only for less expensive items like smaller pieces of jewelry. Blanket coverage is often recommended by individuals in the insurance industry, but unfortunately, that may be because blanket coverage is easier for them to handle and process. You should absolutely consider scheduling for your more valuable items, especially expensive jewelry that you wear on a daily basis where the chance of loss is higher.