Over the course of our lives, we tend to collect shiny trinkets, either as gifts from others or treats for ourselves. Nice watches and refined jewelry are symbols of pride in today’s world and we value them for how they make us look and feel. They show our worth to others and are sometimes how we show others how much they are worth to us. However, the value of these items go past the emotional worth or the cost on your bank statement – they matter to your insurance as well.
Why would you want to insure your valuables on their own?
Because they are investments. Not only did you invest in them when you bought them, but you also invested in their value in the future. The cost of valuable metals and precious stones is always increasing and purchasing pieces from brands means that the piece will increase in value as they are discontinued later seasons and become harder to come by. Protecting these items against loss, theft, or damage means that you can repair or replace the item without incurring too much of a loss on your original investment, or any loss at all.
Many types of policies hold space for insuring your valuables, but these don’t always match up to the actual cost needed. They can help cushion the blow to your wallet when you want to replace or repair them, but this is not always enough. Items that increase in value over time can exceed these limits, and what’s more, is that filing a claim for your valuables influences the overall policy itself.
These are known as endorsements.
Endorsements are additions to your homeowner’s/renter’s policy that leave room in the overall policy’s coverage for valuable items you keep at the insured property. They can cover items typically excluded from a typical policy, extend the types of perils included, or increase the amount paid for the covered loss. The value of the item would be determined by an appraisal or by the receipt showing the amount that was paid for it. This assures that the amount it is covered for is enough to replace it at its original value or current (at the time of appraisal) market value. The items listed are also not usually subject to the policy’s deductible.
But how do we properly insure our valuables in order to make sure that they are adequately protected and won’t have unfortunate consequences for our other policies if we need to file a claim?
These are known as floaters (or inland marine policies).
A floater policy is a stand-alone policy for protecting your valuable items. These make sure that any claims made on your insured property only relate to this policy and not to a larger policy that you may have these valuables listed on. Some important points to remember when valuing your property for these policies are:
Get multiple appraisals for your items to make sure that you get a fair market value for them
Update appraisals for items that increase in value with age
Update policies in general as time goes on because the cost of replacements and materials fluctuates
Keep a record of these appraisals, as well as what you originally paid for the item. Include pictures and a copy of the receipt to negate any future issues with reimbursement
Valuable items are usually quite expensive to buy and getting them insured is not the time to try and save money. Proper protection does not have to be expensive, but keep in mind that the VALUE of the protection is worth the extra COST. Should the need to file a claim on lost, stolen, or damaged valuables unfortunately happen, you will be glad that you spent a little extra along the way.