Special Value Possessions May Need Additional Protection

Collectors of art and other valuables may need additional insurance.

Homeowner insurance isn’t just for the structure of your house. It also provides protection for most of your personal possessions. However, some possessions of special value may require additional protection through a personal articles floater that can provide coverage beyond your standard policy.

What's in your Policy?

Before discussing what a personal articles floater is and the benefits it can provide, it is important to understand some details of your current homeowner policy.

Offered within a standard homeowner policy is Coverage C, better known as personal property coverage. It protects the contents of your home and other property owned by you ranging from the television to the clothes in your closet. Personal property coverage amounts are a percentage of the home’s insured value, typically around 75 percent. See your policy language for your specific situation.

Most homeowners have sufficient personal property coverage to protect their basic furnishings, but what if you own fine art, jewelry, silverware or other high-value collectibles? Some collectors may assume they have the necessary coverage under the contents coverage automatically provided, but in doing so, they risk their collection being severely underinsured. Consider, the standard homeowner policy typically:

• insures these types of items only up to a maximum dollar amount, or not at all.
• requires a deductible – the amount a policyholder must pay for an insured loss before insurance pays the remainder.
• applies exclusions or limitations for such things as breakage, earthquakes, flood or while in transit.
• settles losses on an actual cash value basis, which is the depreciated value of the item.

The Personal Articles Floater

For these reasons, many collectors prefer to purchase a personal articles floater, an entirely separate policy not connected with your existing homeowner policy. Most personal articles policies can provide broad, all-risk coverage, meaning. This means that there is coverage for a loss unless specifically excluded. Some additional benefits typically include:

• No deductible is required, although you may be able to reduce your premium if you choose a deductible.
• Most major dangers to your collection are covered, including such things as: accidental damage, theft, fire, mysterious disappearance, breakage, earthquake, flood and even terrorism.
• Loss settlements are based on an agreed value at the time the policy was issued. Some insurance companies offer up to an additional 150 percent of the agreed value if, prior to loss, the market value is higher than the scheduled amount.
• Coverage extends to newly acquired property.
• The floater provides worldwide coverage.
• Full coverage applies to items in transit or while at any other location away from your home.
• Scheduled and unscheduled (blanket) options are available.
• Most insurance companies offer a package or multi-policy discount.

Covered Property

A personal articles floater can offer proper protection for collections such as these – and many other rare or unique items:

• Antiques
• Musical instruments
• Cameras
• Rare books
• Coins
• Silverware
• Fine art
• Sports memorabilia
• Furs
• Stamps
• Guns
• Wine
• Jewelry

Don’t leave insurance coverage for your collection to chance. If you are uncertain about your current insurance policy and the coverage in place for your valuables, contact your local independent agent for guidance. Your agent has the expertise to assist you in obtaining the appropriate amount of insurance protection for your collection.

This loss control information is advisory only. The author assumes no responsibility for management or control of loss control activities. Not all exposures are identified in this article. Contact your local, independent insurance agent for coverage advice and policy service.