Many families have personal belongings that they may have purchased or inherited that need to be sufficiently covered if they are damaged due to a covered peril or stolen.
1. Homeowner’s and Renter’s Policy Sub-Limits
For example, the typical homeowner’s policy contains a “sub-limit” for coverage on personal belongings like jewelry, fine arts, furs, cameras, firearms, and musical instruments. This sub-limit is typically less than $3,000 which means if your expensive watch or wedding ring goes missing, you will probably be paying quite a bit out-of-pocket to replace it.
For Golf and Gun enthusiasts, the sub-limit in the homeowner’s or renter’s policy keeps you significantly at risk if you own professionally fitted golf clubs or several guns. Some insurance carriers will allow the policyholder to purchase extended coverage for valuable items, but it most cases this endorsement will also fall short of insuring your valuable sufficiently.
2. Broad Coverage
The Personal Articles Floater provides broader coverage for your family’s valuables. It provides coverage for your belonging anywhere in the world, not just while they’re in your home or apartment. The perils insured against is also broader since the floater will cover for mysterious disappearance. This means that the jewelry, custom golf clubs, expensive cameras, or furs that you take with you on vacation are covered. In fact, mysterious disappearance will cover if you are hiking in the mountains and your expensive watch falls off and is never to be found.
One of the best benefits of the Personal Articles Floater is that you are able to insure each item for its “appraised” value rather than the typical replacement value. When applying for the policy, your agent or broker will ask for each item to be listed by type, description, and appraised value. The insurer will then cover each item at appraised value rather than replacement value which can amount to insufficient coverage.
Some carriers will also allow you to add an endorsement that covers your valuables for loss due to breakage. For example, if a diamond falls out of your ring, the company will pay to replace that diamond, or if you accidently drop and break a covered piece of art, your policy will pay to repair or replace it.
3. Newly Acquired Property
Many collectors of valuable property will make an unplanned purchase while traveling. In this situation, your newly acquired property will automatically be insured for 25% of the total limit on your policy, which gives you adequate time to return home and report the purchase to your insurance company or agent. This automatic coverage option will certainly remove the stress of traveling with an item that would normally be uninsured.
4. Loss to a Pair or Set
If you happen to lose an item that belongs in a pair or set, your insurance company will cover the cost of replacing the pair or entire set of items rather than force you to find an exact match for your pair or set. This settlement is based on you returning the original remaining pieces to the insurance carrier.