Do you have expensive personal property items at home such as jewelry, firearms, cash, coins, precious metals, etc.? Did someone just give you something extra valuable for Christmas? If these items are damaged or lost, are you counting on your Homeowner Policy to pay you what you think their value is? Then there are some things you need to know.
The base (less expensive) form of the Homeowner Policy
- Pays personal property claims on an Actual Cash Value (ACV) valuation basis, which means depreciation is deducted from your claim payment.
- Has sub-limits ranging from around $1,000 to $2,500 on what it will pay out for jewelry, firearms, cash, coins, precious metals, etc.
- Has exclusions on coverage when an item is lost, disappears, goes missing, etc. which is the most likely form of claim made on expensive personal items.
Most people upgrade their Homeowner Policy to pay Replacement Cost Coverage instead of ACV to remove the depreciation from the claim payment, but the coverage sub-limits and exclusions don’t go away.
If you want a claim paid for an expensive personal item if it disappears, is lost, goes missing, etc. in an amount you specify (not subject to a sub-limit) with no depreciation factored into the claim payment, and with no deductible, you’ll need to schedule the item on your Homeowner Policy. You’ll pay a bit extra when you schedule items on your Homeowner Policy but you could get MUCH more when you file a claim.
If you’re giving an expensive gift this season, take the time to have a good conversation with your insurance agent to understand how best to ensure expensive personal property. In some cases, a short-term extension can protect the item until it’s properly insured by the recipient. Don’t wait until it’s too late to learn about this!
