2020 New Year Home Resolution #1
Make sure your personal property is properly covered
Homeowner’s policies have limits on the amount of money you can claim for valuables such as jewelry, silver, coins, artwork, antiques, and collectibles. It is important to familiarize yourself with your policy’s limits so you can take steps, if necessary, to ensure your personal property is sufficiently covered.
For example, let’s say the jewelry claim limit in your base policy is $2000. Your engagement ring is destroyed in a fire and you put in a claim on it. Even though your ring is worth $5,000, you will only receive the $2000 specified in your policy. If you lost your ring while swimming in the ocean, or the diamond fell out while on a hike you could be out the full value as your policy does not cover accidental loss on jewelry.
So, what do you need to do to make sure your ring or your grandmother’s silver dish or your favorite hunting rifle is sufficiently covered? Get a scheduled personal property “rider” on your policy.
How to establish Scheduled Property Value
Scheduled property value is established by an accredited appraisal of your valuables (for a resource list on finding accredited and local appraisers, see the list at the end of this post).
Here are the steps to take to set up the right coverage:
- Read your current policy and familiarize yourself with the coverage limits
• Go through your inventory and make a list of those items you feel may require more coverage
• Get these items appraised
• Submit the list to your insurance company and add the personal property rider to your policy.
Once you have gotten your property rider in place, it is very important that you get updated appraisals every 5 years.
Let’s use that engagement ring as an example again. Your last written appraisal from an accredited jeweler was for $5000 in 2000. Over the past 20 years, the value of that ring has risen to $7000. Without an updated appraisal, your coverage would be based on the last submitted appraisal of $5000 and you would be out the $2000 difference.
What if the value of my personal property has gone down?
Not all of your scheduled items will have increased in value over time. Some items, like Oriental Rugs and antique furniture, are not as popular or in demand today as they were 15 years ago.
You will want to consider if you wish to continue paying on the old value or if you wish to have that value lowered and your premium adjusted. This will require a bit of prognostication on your part – determining if you think the value will come back, remain the same, or decrease. It would be worth your time to consult with an appraiser for these items as well so you can make an educated decision about your coverage.
What are the benefits of Scheduling?
While scheduling will likely cost more in premiums, it can come with added benefits:
Broader protection – Not only will you receive a truer value of your property, but you may also be covered for accidental loss which typically isn’t covered by a standard policy. So your wedding ring that fell down the drain would be covered.
Lower or No Deductible – You may have the option of choosing a lower or no deductible for scheduled items, unlike other belongings that are covered by a standard policy.
What Items Should I Consider?
How to find a Jewelry Appraiser:
There is usually an appraiser at a jewelry store near you or you can locate a reputable and independent one by following these steps:
- Call a jeweler you have worked with before and get recommendations
• Ask friends and family for recommendations
• Go online and read reviews
• Check the appraiser’s credentials. He/she doesn’t need to have had formal training, but it is better if there has been training through the International Society of Appraisers, the American Society of Appraisers, or the National Association of Jewelry Appraisers.
• Make sure the appraiser you choose has plenty of experience
• Ensure the appraiser has what’s called “errors and omissions” insurance to protect you
For all types of appraisals, go to the Appraisal Institute of America at https://bit.ly/35YgYWt
As with any insurance, it is better to know too much about your coverage than too little. Filing a claim usually means something upsetting has occurred and by knowing you have adequate coverage on your personal property you can eliminate any added stress.