The third category of home insurance options is oriented toward financial protection. These are options can be added to some home insurance policies are designed to protect the homeowner from a financial loss. Admittedly, all insurance policies are designed to protect the policy holder from a devastating financial loss, yet these are focused on certain types of financial loss.
Credit Card Fraud / Forgery: This used to be a common option for most home insurance policies. Over the last couple of years, the number of companies who offer this option have declined, largely due to the protections credit card companies have put in place. This coverage is designed to cover expenses incurred in clearing up the fraudulent use of a credit card. The amount of coverage is usually capped at $15,000 or less.
Cash and Valuable Papers: Like credit card fraud coverage, this option is being offered by fewer carriers as more and more documents become digitized or replaced by account numbers. For those home insurance companies who still offer this coverage, it is designed to assist in the replacement of lost or stolen papers (stock certificates, deeds, trust documents, etc.), as well as cash kept in the home.
Identity Theft: The number of companies that have had their systems compromised continues to grow. The most recent companies to appear in the news include BestBuy, Sears, Delta Airlines, and Banner Health who’ve experienced data breaches this year. Throw in Yahoo’s admission that all their users were compromised, and millions more were recently added to Equifax’s breach and identity theft is an experience most of us will likely be faced with at some point.
Identity theft coverage doesn’t prevent your data from being stolen or notify when it is. Rather this is designed to help defray the costs associated with getting your identity back once it’s been stolen. These costs include postage to financial institutions, charges and fees associated with re-applying for a loan, as well as certain banking and legal fees.
Scheduled Items: This coverage is oriented toward both property and financial loss of valuable items such as jewelry, furs, artwork, guns, collectibles antiques, and other items which may have values exceeding the base home insurance policy limits such as $2,000 to $2,500. It should also expand that coverage to include loss by theft or mysterious disappearance. Not all policies cover against mysterious disappearance, such as the item was misplaced or fell off a person’s hand, etc. so it’s important to verify your scheduled item(s) are covered for that.
What do you think? Share your comments, questions, and experiences with me on my Facebook, Google +, and LinkedIn pages. I’d love to hear from you!