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Fall is finally here. As it starts to cool and the leaves begin to change, you may find yourself imagining the days to come where you'll spend more time in your yard raking up leaves and maybe watching your children enjoy jumping into them. Or maybe you're taking this time to plan a holiday trip to visit family out of state, and imagining all the fun you'll have on vacation.
Now imagine you're doing yard work or completing household projects, and all of a sudden you find that your wedding or engagement ring is missing. What do you do? While the sentimental cost can not be replaced, will your insurance company pay to replace the financial cost?
Or what about this, you love photography and are excited to use the brand new, expensive camera you invested in for family pictures. What will you do if it gets destroyed? Do you know your insurance policy well enough, to have the peace of mind that your camera can be replaced if something happens?
Not sure about the above scenarios or have other questions about your personal property that goes with you on vacations or other trips? Read on!
Most Homeowners insurance offers some protection
The typical homeowners or renters’ insurance policy will include verbiage stating, “Personal property owned or used by any insured is covered while it is anywhere in the world.” However, all policies limit coverage to named causes of loss (also called perils) and impose special payment limits on certain groups of personal property. Clear as mud right? This means that with a typical policy, most of your personal property will be covered if it is damaged or destroyed whether it is with you at home or while it is with you while traveling. The “catch” is that in most policies not causes of loss are covered. So, it is important to ask questions about what may or may not be covered and why.
For example, you have $200,000 of homeowner’s personal property coverage and while you are traveling, $10,000 of your jewelry is stolen. Jewelry is high-value property that can be easily lost or stolen, so special payment limits are typically specified in your policy. Under a standard homeowners' policy, the maximum payment you might receive for the stolen jewelry is $2,500 or less, depending on your specific policy. If the jewelry was simply lost instead of stolen, the standard policy would pay nothing because mysterious disappearance is not a named peril (cause of loss).
So how do you protect your most valuable possessions? The short answer is there is no one-size-fits-all solution. However, when it comes to protecting your high dollar items, it doesn’t need to be half as complicated as the internet might make you think.
Scheduling Property and Inland Marine Insurance
The two most common methods are scheduling your personal property with your homeowners’ policy or purchasing an Inland Marine policy.
First, let’s discuss scheduling property. A schedule, also called an endorsement, can be added to a homeowner’s or renter’s policy for an entire class of property (called blanket coverage) such as jewelry, or list specific items, such as a men’s gold wedding band. The schedule will describe the property being covered and specify the maximum payment limit in case of a loss.
Of course, scheduling your belongings will likely cost you more but scheduled property coverage will include important additional benefits like broader protection, no deductible, and faster claims settlement.
A Real Life Example
An insured was trimming trees, raking, and disposing of leaves on his property. When he finished, he noticed his wedding band was missing. He searched his yard and leaf piles, but the ring was not found. Under a standard homeowners’ policy, this would not be a covered loss. Fortunately, we had scheduled his and his wife’s jewelry. Since the item was scheduled and the appraised value was listed, the ring was covered, and the claim was paid within 3 days.
Another means of protecting your most valuable property is with a personal Inland Marine policy.
What is personal inland marine insurance? It’s a special policy that protects property that moves, or will be moved, between locations. For instance, classes of property typically covered by Inland Marine insurance include:
- Musical instruments
- Electronics
- Fine art
- Cameras
- Golf Equipment or other sporting equipment
- Jewelry, including watches
- Firearms
- Coin or stamp collections
- Fine China and silverware
- Medical devices
- Furs
The Inland Marine policy will generally cover your property on an “open peril basis”, meaning it provides coverage unless coverage is specifically excluded in the policy.
A Real Life Example (and yes this really happened)
An insured was doing a photoshoot in a state park. While using the toilet facilities which were designated outhouses, he accidentally dropped his camera into the toilet. If you have ever used one of these facilities, you know that there was no getting the camera back. Thankfully, just after our client purchased the camera they called us to insure the camera. The camera was insured by an inland marine policy and because of this, the insurance company paid to replace it.
What is excluded?
Common policy exclusions include normal wear and tear to covered property, breakage or spoilage due to a weakness that is intrinsic to the property, or deliberate destruction of the property by the owner.
Do you want to know if your property is covered, or if you need additional coverage? Reach out to us today. We’ll be happy to review your current policy, explain what is covered and help you determine if you have the best coverage for your needs.
Please note, the information provided here is a brief overview and not meant to be an exhaustive discussion of insurance coverages. To learn more, and get an accurate quote, call us today.
