There are always scores of questions related to people’s personal possessions and their homeowners insurance policies, unfortunately, those questions generally don’t arise until after the damage occurs and the insurance claim is filed. This is where the confusion and anger set in.
The good news is jewelry is typically covered on homeowners policies, but, like many aspects of insurance that aren’t fully understood, there are a few hitches. Your policy’s coverage limit for “contents” in the home is generally 50% of the value for which the home is insured.
For example, if your home is insured for $300,000, your contents are insured for $150,000. Your home’s “contents” can be generically described as the items that would fall out of your home if you turned it upside down and shook it hard enough.
So, up to $150,000 in coverage would exist for your jewelry, right? Not so fast.
Similar to cash, silverware, guns, some computer equipment and musical instruments, jewelry fits into a special category of exposure to a “loss”.
Specifically, thieves aim for these items and since they’re regularly targeted outside the home as well there is a relatively high probability of them being stolen compared to your couch, bed, etc.
As a result, homeowners insurance policies usually contain a sub-limit of liability for these types of belongings.
What’s a Sub-limit?
Simply put, the items described above ARE NOT covered for full value under your home’s “contents” coverage.
A standard homeowners policy includes coverage for jewelry and other precious items such as watches and furs and these items are covered for losses causes by all the perils included in your policy such as fire, windstorm, theft and vandalism.
However, there are special limits of liability for certain items meaning that the insurer will not pay more than the amount specified in the policy. One important issue limit is for the theft of jewelry. To keep coverage affordable because jewelry can easily be stolen, the standard policy has a relatively low limit of liability for theft, generally $1,500.
If you own valuable jewelry or other items that would be difficult to replace there are two ways you can increase coverage:
- By raising the limit of liability or “scheduling” your individual pieces through the purchase of “floater” policies. Raising the limit of liability is the cheapest option; however, there may be a limit on the amount you can claim for the loss of any individual piece, say $2,000, when the overall limit is $5,000.
- You can also “schedule” each piece or item you own. Scheduling may cost more in premiums but it offers broader protection because the floater covers losses of any type, including accidental losses such as dropping your ring down the drain of the kitchen sink or leaving an expensive watch in a hotel room that your homeowners policy will not cover. Before purchasing a floater the items covered must be professionally appraised. The cost of this service varies depending on where you live.
It is important to know what is and isn’t covered in your policy. We recommend calling our office today for more information. Call us at Inspirion Insurance Solutions (702) 979-3299 and we will give you a free review of your current homeowners coverage.