A thoughtful gift from a loved one may be priceless but replacing it can be pricey. What happens if the diamond falls out of your diamond earrings, or your designer watch is lost or stolen? Will it be covered under your home insurance policy?
What a typical home insurance policy covers
If you don’t schedule valuables in your home insurance policy, there are limits to the amount your insurer will cover. A scheduled item is an appraised piece of property which is specifically identified on a policy. These are sometimes called jewelry riders or valuable item endorsements. Whether you are insured on a Homeowners, Renters or Condo policy, there is a line item for personal property coverage.
Home insurance policies generally have a low limit of liability on loss of jewelry or other valuables in the event of a claim. This means that there is generally a limit to the maximum value that will be covered for a single item, and that the value of valuables, such as jewelry, watches, gems, and furs, are often grouped together with an average combined limit of $3,000-6,000.1 You’d be surprised how quickly the worth of your collection can exceed that limit, in which case you won’t be covered for the full value of your belongings should something happen.
A typical home insurance policy also only covers damage in certain circumstances. If your valuables are damaged by a fire, car accident, theft or a windstorm, they would typically be covered. However, if you lose or damage jewelry or other precious possessions outside of these situations, their loss or damage may not be covered by your insurer.
Advantages to scheduling your valuables
When you schedule a valuable item under your home insurance policy, you purchase additional coverage specifically for that item. This means its replacement value is fully covered under your home insurance policy if you lose or damage the item anywhere in the world.
Coverage of a scheduled item will also cover repairs or replacement if a jewel falls out of a piece of jewelry, one of the most common jewelry related insurance claims. Most of the time when you schedule an item no deductible will be applied.
How to schedule your valuables
Many types of valuables can be scheduled, including jewelry, furs, expensive electronics or cameras, art and instruments. To schedule your valuables, follow these steps:
Keep your receipt: it may not be very romantic to ask your sweetheart for the receipt of a gift, but it’s necessary if you want to make sure it’s covered for its full value. You can either let them know you need the receipt for insurance purposes or ask them to hang onto the receipt for you. They’ll likely be touched that you value their gift enough to protect its worth.
Have your jewels appraised: If you have jewelry that wasn’t purchased recently, you should get its value appraised by a professional appraiser. Jewels tend to increase in value, so it’s a good idea to get a new appraisal every five years so your coverage is up-to-date. Be sure to research the appraiser’s credentials and make sure they’re certified. The value of artwork, antiques and furs can also change and should also be appraised periodically.
Review your policy limits and talk to your broker: If the value of your gift exceeds the limits in your policy coverage, it’s a good idea to give your broker a call and chat about adding additional coverage for the item.
Do you have questions about your home insurance policy coverage limits or want to learn more about scheduling coverage for a specific valuable? Call an OTIP insurance broker at 1-800-267-6847.
1. Economical Insurance