Protect the Family Jewels

This phrase may first bring to mind the advice you give your son as he heads off to his first midget football practice, but for many Fine Living readers, this phrase has a meaning much closer to home.

A very timely subject as we enter the gift-giving season ... when it comes to "valuable articles" as we call them in our business, there are some severe limitations in the standard homeowner policy that can really pinch you if you're caught unaware. And we're not just talking about jewelry here. Limitations are also found for silverware, guns, furs, money & securities, as well as fine art and other collectibles.

Because these are typically the things a burglar is looking for, the limitations in the homeowners policy places limits on "theft" pays only up to certain amounts for these types of property, if stolen. For example, the standard homeowner policy will pay no more than $1,500 for theft of jewelry, $2,500 for silverware, and $2,500 for guns. Many insurance companies have put together programs for high-value homeowners offering higher coverage limits for these items. Chubb and Travelers, for example, have special policies that cover $5,000 for theft of jewelry, while Westfield's "Estate" program offers $10,000.

A homeowner or tenant can buy more coverage for these types of property for an additional premium, and the cost to increase these "unscheduled" limits isn't terribly expensive. But when it comes to items of particular value, there are still some dangerous gaps in coverage to be concerned about.

Even though you may increase the theft limit for jewelry, for example, this still doesn't cover "mysterious disappearance". So if a stone falls from its setting and is lost, or if a ring is simply misplaced, there is still no coverage. The best way to protect these items of significant value is to itemize or "schedule" them specifically on the policy. This requires a detailed description and a recent appraisal or bill-of-sale, and an additional premium based on the item's value. Worth noting here, for items that spend most of their time in a safety-deposit box, there may be an added discount available.

By scheduling valuable property this way, the homeowner gets the maximum protection available. Last winter a gentleman's expensive Rolex watch slipped from his wrist was lost in the snow while skiing. The watch was scheduled, and he was paid in full, no deductible. A similar situation occurred when a distressed client called to report her 25th anniversary diamond ring had just disappeared down the sink. It didn't turn up when they took apart the plumbing, but the claim was paid in full because the ring was itemized on her policy.

Another situation where you may get caught with no coverage is in the "perils" the valuable item is covered for. In other words, what causes the loss to the item may not be a covered cause of loss. A common example when it comes to fragile items ... anything from a collection of fine art to a cellar full of fine wine ... is breakage. When covering items such as these, be sure breakage, or in the case of the wine - even spoilage, is a covered peril within the policy.

Another popular item to schedule, and cover for breakage, is a musical instrument. Some of these cases students tote back and forth to school are now carrying "professional-grade" instruments with some serious price-tags! Plus after seeing what goes on over the course of a marching band season, maybe itemizing these isn't such a bad idea.

Take a look around the house and think about the items of particular value. Or even better – when you're doing your home contents inventory that I so strongly recommend, these items should stick out like sore thumbs. Whether it's a baseball card collection, a display case filled with antique shotguns, or one of those big holiday gifts in a very small box, these items should not be treated like a sofa or a chair. Be aware, and bring these items to your agent's attention. There is simply no replacement for the right protection.