A standard homeowner’s policy that protects the value of your home and personal effects is not well structured to cover valuable items like jewelry, artwork, precious metals, and other similar pieces.  Standard policies do a great job of covering general mass-produced items like clothing, furniture, and electronics.  However precious and high-cost property needs its own coverage. 

Isn’t my jewelry covered by my homeowner’s policy?

Years ago, insurance companies took a beating anytime a small, but expensive ring was stolen.  Similarly, the delicate nature of stamp collections meant that any basic loss would cost the carrier far more than they took in premiums.  So, over time, all carriers built in restrictions to covering these types of items.

For example, most policies limit theft of jewelry to $1,500.  That’s right – if your ring burns up in a house fire, you get the full value of it, but if the ring is stolen, you only get $1,500 regardless of its value.  So, sure, your agent will correctly tell you there is coverage for your jewelry on your homeowner’s policy, but after you lose your ring, the $1,500 check won’t go very far.

What’s the solution is homeowner’s coverage will fall short?

For valuables, you will want a personal articles floater which is sometimes called a scheduling your articles.  All carriers offer this coverage and it is surprisingly effective for what it offers.  This policy can be written as a stand-alone policy (sometimes even from a different carrier) or attached as an endorsement to your existing homeowner’s policy.   Typically the Personal Articles Floater provides:

• No Deductible: Most floaters have zero-dollar deductible, so your claim gets fully paid
• Agreed Value Coverage: Floaters will establish the value of the article and pay that much, regardless of depreciation.  You know how much value ahead of time.
• Pair and Set: These policies accommodate pairs.  How good is one earing to have if the second earring is lost?  This type of policy accommodates that even when one is lost, full coverage should apply
• Broader Protection: Coverage for virtually all risks including accidental loss, mysterious disappearance, and damage.
• Worldwide Coverage: Protection at home, abroad, or even while in transit
• No Impact on Homeowners Premiums: Claims on your floater typically don’t affect your homeowner’s insurance rates.

All of these reasons make these policies so desirable.  The cost is incredibly cheap for the coverage provided. 

What Goes on a Personal Articles Floater (PAF)?

Anything of unique value can go on a PAF.  Aside from jewelry (most common item), coin collections, and artwork, I’ve had clients that:

• Had an extensive guitar collection from rock band performers
• A collectible set of wicker furniture that was being shipped from an auction house to his personal home
• A collector of fine whiskeys
• A collection of antique rifles

So, yes, anything that you can attach value to can ultimately be scheduled.  It just needs to be described and have a value that can be appraised.  It also doesn’t need to be a “collection”, but just a one off high piece of artwork or valuable item might be entirely appropriate for this type of policy.

This is why you need an excellent insurance broker.  They are the ones that can help you review your household and advise you on what is the best way to insure any given item. 

What’s that about an appraisal?

Because you and the carrier are making a pre-determined arrangement on the value of your special articles, there has to be an agreed amount ahead of time.  If your article gets lost or destroyed, the carrier is just going to write a check without having a claims adjustor try to figure out the value at the time of loss.  All the valuation work is done upfront.  So, the carrier is going to require some sort of proof of the value of that item. 

Carriers differ widely on what they accept and how often they ask for updates to values.  Some will accept a simple receipt.  Others will want an appraisal from an expert in the field.  Still others might accept comparable auction items.  It all depends on the item in question and the carrier.  But, there will be a request for something to establish the value. 

There is often a cost to getting appraisals completed, so I advise my clients to only start worrying about personal articles if the value of the item makes it worthwhile.  For each client, that threshold might be different, but typically something on the order of $5,000 begins making sense for this type of policy. 

The Mt. Franklin Insurance Difference

At Mt. Franklin Insurance, we’ve helped thousands of clients across Texas, New Mexico, and Arizona properly protect their valuables. Our independent status means we work with multiple different carriers to find the best coverage and rates for your specific needs.

Contact us at our El Paso or San Antonio offices for a personalized insurance review. We’ll help you understand your current coverage, identify potential gaps, and create a protection plan that gives you peace of mind about your precious possessions.