The countdown to Christmas is in full swing. In case you’re wondering, there are 17 more shopping days till Christmas, although it would be hard to not know that based on the advertisements on TV, radio, and everywhere else. Even on Monday night football, ESPN has its Zales Extraordinary Moments and there’s ever present “diamond kind of love.”
These commercials provide a great reminder for homeowners to schedule these items on their home insurance policy. While jewelry is covered by most insurance policies, many people are surprised at their policy’s limits on unscheduled jewelry. The limits typically are in two key areas; the amount of coverage and the type of loss.
Amount limits: Most home insurance companies have a cap on the total amount of coverage paid on items that are not scheduled and covered under the personal property coverage of the policy. These amounts can either be on a per piece basis or on an aggregate basis.
If the policy uses a per item limit it will restrict the amount of payment to a specific dollar amount such as $1,000, $2,000, or $2,500 for the loss of a single item of jewelry. It’s also common to use this in conjunction with an aggregate limit based on the maximum amount of coverage on all jewelry such as $5,000. If there are items that go beyond the total covered limit, the insurance company will limit the payout to the aggregate limit.
Types of loss: In addition to amount limits, insurance companies may tie the amount of coverage to a specific peril or loss. In these instances, the policy pays when the jewelry is lost to a storm or fire up to the amount stated in the policy. If the loss is the result of a theft, many policies will pay a lower limit such as $500 or $1,000.
The one peril that is usually not covered is mysterious disappearance. This peril applies when a ring is lost and you don’t know how or where it was lost. It’s important, however, to confirm if the policy covers mysterious disappearance as I’ve run across a policy or two that either doesn’t cover it or charges more to cover an item for this type of loss.
In order to protect items for all types of losses and their full value, these items should be scheduled. Scheduling jewelry is a policy option where the article or articles are covered for an agreed or stated value. In most cases, insurance companies will require either purchase receipts or appraisals showing the basis of the value to schedule an item. Insurance underwriters may require appraisals to be no older than 5 or 10 years old.
Surprise your loved on with whatever the two of you will find special. If it’s jewelry or some other valuable item, take the time to review your home insurance policy or talk with your agent about how to best cover it. If you have a question, comment, or experience you’d like to share, post them on my Google +, Facebook, or LinkedIn pages. I’d love to hear from you!