Insuring Valuable Articles: Your Questions Answered

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Due to the nature of our business we often get asked questions from homeowners regarding the proper way to insure valuable articles, differences in coverage types, etc.

We do not claim to be insurance professionals and always receommend that the insured circle back with their insurance advisor to discuss the specifics of their policy and the best plan based upon their needs. We thought it would be helpful to address many of the questions we typically hear so we recently interviewed Maria McCool, Property and Casualty Manager at SignatureFD in Atlanta, GA.

1. What are the main benefits to scheduling valuable articles versus covering them under general personal property coverage?

Maria: Most standard insurance policies limit the amount paid for loss to certain classes of property.  For example, money, coins, jewelry, furs, and other items have sublimits in the form, providing minimal protection for personal property in these classes.  A standard homeowner policy may also limit the perils or cause of loss for which an item is covered.  Jewelry, for example, may only be covered for theft.  A frequent cause of loss is simply losing a piece of jewelry and a standard homeowner policy would not respond.  By scheduling an item you gain several benefits:

• A deductible is not applicable at the time of loss for a scheduled item.
• Scheduling allows you to settle the loss before it occurs, by establishing a value in advance.  Most carriers will require supporting documentation for the value that is established in the form of an appraisal.
• Scheduling provides broader perils than does the typical homeowner policy.  For example, it may cover the perils of flood and earthquake, which a homeowner’s policy excludes.  It also may pick up the perils of mysterious disappearance or breakage of fragile items.
• Scheduling an item may provide additional coverage for values that have inflated since the policy inception.
• Scheduling can provide protection for the full value of a set, when one of the items is lost, such as earrings.

2. What do you recommend when it comes to the types of items that homeowners should include on a schedule?

Maria: The standard classes that have a sublimit on the homeowner’s policy  are as follows: Money, coins, gold and silver, Securities, Watercraft, Trailers, Jewelry, Furs, Guns, Silverware, Electronic devices, and business property on and off the premises.

An individual should begin by comparing the items they own to the items that are limited in a typical homeowner’s policy.  They then should think about their lifestyle.  Do they collect any unique items of value (fine art or antiques)?  Are they into photography with significant camera values?  Do they have extensive computer values?  Even if the items they collect do not have a sublimit  within the homeowner policy, they may need to consider the value of the collection and confirm that their personal property limit is adequate to replace the collection and the remainder of their home in the event of a total loss.

3. What is the biggest misconception about insuring valuable articles?

Maria: Some carriers do not require appraisals in order to schedule an item, provided that the item is under a certain value.  This does not mean that the owner does not need an appraisal.  In the event of a loss, the owner will need to provide documentation as to the value of an item by providing either receipts or an appraisal.  The best time to establish the value is prior to the loss.  Also, many people think that once the item is appraised and scheduled, their work is done.  The truth is that these items change in value over time.  A schedule is a fluid document that needs to be reviewed and updated on an annual basis.

4. What is the biggest challenge you face when it comes to getting a homeowner to understanding the value in scheduling items?

Maria: The biggest challenge I face in meeting with clients is their understanding  the likelihood of a loss and incurring the cost to schedule.  Most people think it is unlikely that they will have a loss, and are reticent to pay the additional premiums to schedule.  The truth is that in a difficult economy, the number of thefts are on the rise.  Frequently, the cause of loss is simply losing an item.  A schedule protects an insured against others and themselves.   In a difficult economy, the ability for individuals to replace an item out of pocket may be diminished along with their net worth.  The best way to protect a valuable article is through a schedule on their policy.

5. How can clients best address items that appreciate in value over time?

Maria: We have seen many items appreciate over time such as gold and diamonds.  Some carriers offer endorsements or policy wording that protects the individual from inflation of an item during a policy period.

Coverage is usually granted as a percentage of the scheduled value.  For example, the carrier is willing to pay up to 150% of the scheduled item that has increased due to appreciation.  

Asset Archives also recommends having your items assessed by a certified appraiser every 2-4 years depending on the type of collection to confirm that the values are up to date.

What experiences have you had with scheduling valuable articles?

Maria McCool has over 20 years of experience in the Property and Casualty Insurance industry. For more information about SignatureFd visit www.signaturefdinsurance.com or to discuss your specific insurance needs contact Maria McCool at 404-253-7600.