I was recently asked by a friend of our firm to look into the issue of personal property limits for flood coverage. The question focused on antiques damaged by flood waters. Specialty, high value items are covered under section B6 of the standard flood insurance policy (SFIP).

Special Limits. A total of $2,500 is the maximum payment allowed for artwork, rare books, jewelry, furs, or any article containing fur, which represents its principal value, as well as personal property used in any business. This maximum payment also extends to the following:

Porcelain or other figurines and sports cards
Autographed items
Precious and semiprecious stones
Articles of gold, silver, or platinum

This coverage is limited to personal property owned by the named insured, household family members, servants, and guests.

Antiques. Coverage is provided only for the functional value of antiques.

This provision of the SFIP, like the rest of the policy, is strictly enforced by federal courts. Accordingly, regardless of the value of your objects of art or autographed sports memorabilia, you will be paid only $2,500 if it is lost or damaged by a flood. Further, if you have antiques, you will only be paid for the functional value; you will only be paid the cost to replace antiques with modern items of equivalent functional value. For instance, if you are fortunate enough to have a vase from the Ming Dynasty and it gets destroyed by a flood, the SFIP will only pay you to replace it with a modern vase of the same dimensions.

If you have items of significant value, it is important to purchase insurance that will specifically cover them. The SFIP provides only very limited coverage for most valuables, but for-profit insurers offer coverage for antiques, memorabilia, art, and jewelry. You should invite your insurance broker to view your collections and have them appraised so they can be properly insured.