Have fine art, jewelry or other valuables in your home?
If so, you probably know you should consider additional insurance for them, because basic homeowner’s policies generally have limits on how much they’ll cover, especially in the case of theft.
There are two major forms of additional coverage for valuables. One is to insure items individually with their own additional floaters to your home insurance policy. The other is to buy broader blanket coverage for each category of valuables, say jewelry, art, wine or collectibles. With the more expensive first option, you need to schedule, or list, each item individually, while with the less expensive blanket coverage, you don’t.
So which is the better option? The insurance experts I spoke with agreed that despite the higher price of scheduling and the fact that it often requires appraisal of items, scheduling comes with a number of advantages. “If you have very valuable items, it’s better to have them listed,” said J. Robert Hunter, director of insurance at the Consumer Federation of America.
First, if something were to happen to your house, like a fire, scheduling could help you avoid arguments with your insurance company over what was in your house.
Clearly, regardless of what type of homeowner’s insurance you have, you should have an inventory and records of what’s in your house along with proof of those items’ value. If you didn’t schedule the items in the policy, you’d have to present this proof to the insurance company.
With scheduling, on the other hand, the proof would be right in your insurance contract, which forces you, in effect, to have your documentation in order ahead of time. “You’re going to pay a little more, but at least you have the peace of mind knowing there are not going to be disputes if you have a serious fire or hurricane or something destroys your property,” Mr. Hunter said.
Scheduling also has other advantages. Because you often have to get items appraised to get them scheduled, this approach helps ensure you get the right amount of coverage for an item.
In addition, according to one insurance broker who works with wealthy individuals in the San Francisco Bay area, with scheduling, you get what’s called “mysterious disappearance” coverage. As a result, you’re covered if you lose an item — for instance, if a diamond falls out of your engagement ring. In addition, according to the broker, if an item appreciates in value, such policies will also cover up to 50 percent over and above what you paid for the item.
For these reasons, the broker said she recommends blanket coverage only for less expensive items like smaller pieces of jewelry. She urges scheduling for more valuable items, especially expensive jewelry one wears on a daily basis where the chance of loss is higher. Those who work in insurance, she said, often recommend blanket coverage because it’s easier for them to handle and process.
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