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Don't assume art, jewelry, ATVs all have coverage

March 24, 2011

USA Today - 03/25/11
By Erin Kutz

Homeowners insurance policies typically cap the amount they’ll reimburse consumers for on items such as jewelry, art and collectibles — often at far less than the value these objects have accrued over time.

In the case of a fire, break-in or accident, the damage to your favorite family heirloom can mean a loss of more than fond memories.

“In that situation, there are certain limitations on your homeowners policy that may or may not cover that piece of art,” says Tim Hogan, head of elite services for insurance and consulting services firm Alper Services.

The same goes with jewelry, firearms, furs and antiques. “If you have an item that is valuable because of what it is …where the true value is not what’s on the tag, but worth a lot more, you can have items appraised and … insured separately under a floater policy,” says Madelyn Flannagan, the Independent Insurance Agents & Brokers of America vice president of agent development, education and research.

These policies can cost a couple of hundred dollars per year depending what they cover, but should be worth it, says Hogan. “When you schedule something under a policy, you’re getting …much bigger coverage,” he says. Putting these items on separate policies prevents you from having to pay a deductible when replacing them, as you would when making claims for items under a homeowners insurance policy. The annual cost of this coverage can run from 1.5% to 2% of the value of the items being insured.

Consumers shouldn’t assume the coverage for personal possessions on their homeowners policy is enough. “If you want to cover things, you need to ask about a rider or endorsement for those things specifically,” says senior managing editor Amy Danise. “Otherwise, you’re underinsured.”

Lynn Gottlieb, 59, of Seattle, says she has itemized, scheduled personal property coverage for jewelry, which otherwise wouldn’t be adequately protected under her homeowners policy. She gets the items reappraised every two years, because in the past she didn’t do it frequently enough, and had to pony up her own cash after a break-in.

“I had to pay part of the cost to get the items replaced since the insurance did not totally cover them. What a bummer,” Gottlieb says.

Consumers could also look to coverage available on their existing homeowners insurance for protecting specialty items, says Ross Buchmueller of the insurer PURE. For example, some specialty insurers take the cap of jewelry coverage from $5,000 to $50,000. “Most people do not have enough coverage for jewelry; there are solutions besides simply buying a separate policy; look for solutions that have broader coverage for jewelry,” Buchmueller says.

Consumers should be on the lookout for how to protect the liability surrounding certain toys and recreational vehicles.

All-terrain vehicles, WaveRunners and motorized scooters are all covered under a homeowners policy — provided that they stay on those premises, says Hogan. If you actually want to use those vehicles out in the wilderness or on the waves — as they’re designed — you need to get separate insurance policies for them, he says.