A few years ago, my wife gave me a watch for my birthday. It is a simple modest three-hand Bulova and I was ecstatic. It was the best gift I ever received. It was slim and elegant and would be a perfect addition to my attire in my budding legal career. What I didn’t know then is how consumed by the world of watches I would become. I was so intrigued by that little watch that within the coming years I would buy and trade several watches from Tag Heuer to the famous Swiss brand with the 5-pointed crown. Then arose the problem, suddenly I had a few uninsured pieces of jewelry.
Many people are relieved to find out that theft is generally a covered cause of loss in their home insurance policies. This will protect the contents of your home if you are ever the victim of a theft crime. However, what many people do not know is there are special limits when it comes to jewelry. Each policy differs, but a standard policy may place a special limit of liability on jewelry between $1,000 and $1,500.
Over time, most people will accumulate a collection of jewelry that will exceed the special limits of liability. If a theft or other loss should occur, it would be devastating to discover you don’t have adequate coverage.
In-order to ensure that you have adequate coverage for your jewelry, talk to your insurance agent and see what the policy will cover. There may be an add-on or rider you can purchase that will increase the special limit of liability for jewelry. Another option is to look at taking out an insurance policy on the jewelry itself. A home insurance policy may cover theft crimes that occur in your home, but many jewelry thefts occur outside of the home. Getting an insurance policy on the jewelry itself can help cover these losses that a homeowners policy will not.
An excellent post on this topic is, Insurance Agents and Policyholders Need to Schedule Jewelry for Better Coverage, which noted this:
Sublimits on certain classes of expensive personal property in the homeowners exist because the policy is written and priced for the “average” exposure. Anyone who has items in excess of the limits in the policy is deemed to present a risk greater than the “average.” Because of the susceptibility to theft and “mysterious disappearance,” the premium to insure jewelry in particular can be substantial, which may give some insureds second thoughts about scheduling. However, there are definite benefits in scheduling the property. First, as stated above, scheduling provides open perils coverage.
Coverage for personal property on the homeowners is on a named perils basis, so a woman whose toddler throws her diamond engagement ring down the garbage disposal would find no coverage under her homeowners policy. The only excluded causes of loss that apply to scheduled jewelry are wear and tear, gradual deterioration or inherent vice, insects or vermin, war, or nuclear hazard. Gold, for example, will wear away after a time (as when a gold ring is worn for a long period of time), but for the most the coverage is broad enough to allow for virtually all that may befall jewelry. By scheduling, jewelry is even covered for loss resulting from flood or earthquake.
Scheduling jewelry also provides some coverage for newly acquired jewelry if jewelry is already insured—the lesser of 25% of the amount of insurance for that class, or $10,000. The insured must advise the company within 30 days of any acquisitions, and pay any additional premium from the date of acquisition. This coverage does not extend past the policy period.
The lesson is quite clear:
Policyholders should schedule jewelry and other collectables on a separate coverage form that fully protects those expensive, and sometimes priceless, articles. Insurance agents and brokers should inquire about the need and place this coverage as a matter of practice.
Even if you are someone who does not have jewelry, there are likely contents in your home that are not covered or are limited by your policy. As a general tip, it is important to spend time with an insurance agent and tell them about your unique coverage needs to ensure that you are fully covered if you suffer a loss.
If you love life, don’t waste time, for time is what life is made up of.
– Bruce Lee