Insurance polices have changed over the years. You might think that many of your fine valuables are covered for major loss, but in actuality most policies only offer a set amount as basic coverage. If your possessions amount to a whole lot more than the basic (which is usually only about $1,000 for the household), then you might want to think about getting some separate riders for big ticket items. These items can include things of high market value and/or high sentimental value, like your diamond engagement ring. Just be aware that insuring an article for a large amount doesn’t mean you will get that amount if it is lost or stolen. You do need to substantiate the value of your item before and after the item is insured.
What’s It Worth?
Okay, so your engagement ring is priceless to you. Not so to your insurer, unfortunately. They will take a more objective view of your fine valuables. You will want to get it appraised and offer that as proof of worth. Another way to get the value assessed is to keep the receipts of purchase and include those in your documentation. Keep the documentation somewhere outside your home. This way, if it ends up burning to the ground, you can still access your important papers safely tucked in a safe deposit box off-site.
If you have a collection of artwork or coins, it may be harder to assess the value over time. Prices on collections can rise and fall depending on their perceived value in the market place. Be sure to update this every year so that you don’t carry to much or too little insurance on these, if you decide to insure them separately.
You will want to be sure exactly what your policy covers. Will it you get the full replacement value if the item is stolen? How about if it is simply lost? What kinds of events can nullify the policy? Read the fine print and make sure you understand the terms of the insurance policy.
What’s It Cost?
Once you understand what it might cost to replace an item, this will give you a good idea on whether it is worth insuring it. If your ring is only worth $500, then you are probably covered for theft (at least) of this fine valuable. Remember that the amount your regular policy covers is a total amount that isn’t to be exceeded due to multiple losses. If someone comes in and wipes out your entire house, you get whatever that policy states is the total coverage, usually somewhere between $1000 and $2500. So, if your ring, your stereo, your fine china, and the Andy Warhol on your mantel all get stolen in one day, and none were insured separately, then you can expect just about $1,000 to $2,500 in all, depending on your particular policy.
If you want to guard against loss as well as theft, make sure that is in your separate rider. You can add any number of items separately to your policy and it will usually cost about $1 to $2 for every $100 of value you are insuring. It is up to you to get a good appraisal of those items so that later, when things might end up lost or stolen, you get the money you expected to get instead of a lower market value. If you have an appreciating asset, this type of separate insurance can guard your investment. If your asset depreciates over time, you don’t want to end up spending more on insurance than it is actually worth.
Buying Some Peace of Mind
Getting insurance on additional items separately isn’t for everyone. It all depends on whether you want the additional peace of mind that these policies can offer you. Unlike the total coverage that comes with your basic homeowner’s policy, these separate riders will cover a particular item completely. Items that might be worth insuring include: artwork, diamond jewelry, recreation trailers, fine china, hard to replace and valuable collections, and silverware. If you are wondering whether it is worth to insure or not, take a look at the worst case scenario. Can you handle the loss, both emotionally and financially, should you lose a specific item you possess? If the answer is no, then find out if it has a monetary value that you can prove through an appraisal. If it is valuable and you fret losing it, then insuring separately it can provide a peace of mind that you won’t have otherwise.
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