Are you recently engaged? Have you inherited a family heirloom jewelry piece? You may be asking yourself how you should handle and protect this new valuable item you posses. A homeowner’s insurance policy includes coverage for the insureds personal property or contents. You can insure a ring through your homeowner’s policy. An insured’s valuable jewelry would be covered under this policy at no extra charge. However, there are some concerns about relying on the personal property section of your policy to cover valuable articles. So, let’s look at some concerns and solutions!
First, a standard homeowners policy settles personal property claims using actual cash value loss settlement. At Bradshaw & Weil, Inc. we always include an endorsement, if available, to settle personal property claims at replacement cost. This may not be an option with your current carrier, or your agent may have left this option off to be able to offer a reduced price. Actual cash value equals replacement cost minus depreciation.
Next, claims paid under the personal property section of a homeowner’s policy are subject to the policy’s base deductible. Your payment at the time of settlement would be even less than the actual cash value because your deductible would apply. If your policy deductible is $1,000 and a ring worth $2,000 is destroyed by a covered peril, then you would only get $1,000 at most from the insurance carrier.
Perils Insured Against
Finally, a standard homeowner’s policy provides coverage for claims arising out of:
- Riot or civil commotion
- Vandalism and malicious mischief
- Volcanic eruption
It is noteworthy that “lost or stolen” is not included in the list. This is the most prevalent risk for valuable articles.
So, what should you do instead?
A Better Solution
Is there a better solution to insure a ring? Yes. If you have items of significant value then our agency would suggest scheduling them. Scheduling your items does generate a small amount of additional premium but the benefits far outweigh the cost.
First, to schedule a valuable item, you will likely be required to provide an appraisal of the item or receipt. The appraisal allows you to insure the item for an agreed value. It also details the specific features of the item so the insurance company can replace with like kind and quality.
Next, scheduled items are not subject to a deductible. If your scheduled ring is worth $2,000 then the insurance company will pay $2,000.
Perils Insured Against
Finally, to insure a ring by scheduling it adds coverage for lost and mysterious disappearance. This is not covered under any other section of your homeowner’s policy. Valuable items are small and easy to misplace. This is a benefit of paying the small premium to have this coverage.
Our agency is here to answer any additional questions you have regarding insuring valuable items. If you would like a quote, then you can reach us by completing the form below.
Disclosure: The statements made are true of a generic base policy. Endorsements are available that provide some of the additional coverages listed. You would need to analyze your specific policy and insurance company guidelines to confirm that coverage is in place.