Insuring Your Most Valuable Items

By Megan Cooney, Marketing Assistant

You’ve spent all that money on the perfect ring for that special someone, so why not protect your investment? A personal articles floater policy may not pertain to everyone, but you should consider writing a policy if you own valuable items such as jewelry, furs, fine art, cameras, computers, china and silverware, coin collections, guns, and musical instruments.

Although a homeowner’s policy does cover certain losses and damages to personal property, it is limited in its coverage. Personal property is protected on an actual cash value (ACV) basis, which is equal to the replacement cost minus the level of depreciation. Often times, ACV depreciates to below the amount needed to replace an item. This means that your valuables may not be adequately covered in the event a claim is filed.

There are two ways to protect your valuables through a personal articles floater: a blanket or scheduled/agreed value policy. Blanket coverage does not necessarily insure your possessions to value. For example, if you have a piece of jewelry valued at $20,000 and lose it, the carrier will ask for an appraisal of the item, and could replace it with a jeweler of their choice. This means that if the carrier can replace that same piece of jewelry you bought for $20,000 for a lesser value, they will.

“An appraisal is one person’s opinion of what a piece is worth,” said Darlene Ball, Personal Lines Account Representative at McGrath Insurance. “This is why it is so important to take your jewelry to a certified gemologist, or take other valuables to a professional, when getting an appraisal.”

A scheduled or agreed value policy is based off appraisals, which should be conducted every 3 to 5 years, less if the piece is scheduled at $100,000 or more. This coverage gives you the option to repair or replace the item at the jeweler of your choice or to keep the cash value of the item (based on the appraisal amount) with possibly no deductible.

When looking into insuring your valuables remember that different factors can determine the cost of the policy and the replacement costs. Coverage for valuables kept in a bank vault will cost less than items worn daily or left out in the open. Also, the rising production costs, as well as the increased cost of certain metals, diamonds, and gems makes repairing or replacing certain items more expensive.

For more information on a personal articles floater policy, or to review the coverage written into your homeowner’s policy, contact McGrath Insurance Group at 800-342-3859.

*This article is written for informational purposes only and should not be construed as providing legal advice.