Many homeowners make a common mistake when deciding on the amount of homeowners insurance they really need. They consider the cost of the house, forgetting that to insure their contents on top of the house itself, they need to increase the amount of their homeowners insurance to include the cost of those contents. When you are talking about the type of coverage your need for your home, ask your independent agent to explain how the dwelling coverage part of your policy works. Most companies put a cap of 75 percent of the total dollar amount of your home insurance policy so you couldn’t receive any more than that amount for your jewelry or art work – regardless of their appraised value.
Kiplinger explains that although these possessions may be included in your standard home insurance, the amount the company is likely to pay you for certain items like jewelry may only be $2,000 or $3,000 at the most, unless you insure each of your valuables separately. What’s more, while you may be protected against theft, you probably won’t have that coverage for breakage.
USA Today urges homeowners not to assume that their homeowners policies will cover them for valuables like art and jewelry, or even an ATV. A more likely scenario is that IF you were even covered, the amount of your reimbursement would be far less than the value of the piece or pieces, and wouldn’t factor in appreciation from the time you bought or received those items.
The best way to protect your valuables, is by asking your insurance agent to show you options for adding endorsements or riders to your existing homeowners insurance policy. By insuring valuables separately and having a floater – or policy that buffers your standard homeowners coverage, you also don’t have to pay a deductible if you had to replace them. You may be able to get broader riders, floaters or endorsements to cover your jewelry in bulk so you don’t have to insure every item individually. The same goes for artwork.
To be sure you have adequate coverage for these valuables, make a point of having yearly reappraisals on valuables you insure with an endorsement to increase your coverage. You don’t want to be under insured for valuables you couldn’t afford to replace, if the insured value is lower than the appraised value. Also insist on insuring art work, jewelry and other valuables for replacement cost, because any other coverage subtracts depreciation– even on valuables that appreciate