Insuring Your Valuable Items

We appeared on Lowcountry Live last week to talk about Valuable Items Policies. (See video here.) Below is a run-down of everything we discussed!

The insurance industry does a great job confusing people! We (the industry) provide coverages, then exclude them, then provide them back via endorsement all in the same policy! This leaves you, the homeowner, clueless as to what coverages you actually have. Insuring your valuable items (i.e. jewelry, fine art, antiques, fine china, wines…) is right there with the confusion. Many Charleston and Mount Pleasant families believe they have “full” coverage for all their personal belongings under their homeowner’s policy in the section titled “Personal Belongings” or “Contents.” One would only think that if your policy says you have $300,000 of personal property coverage, that everything you own is covered under that limit…until you read the fine print.

While there is coverage for the aforementioned “valuable items,” there can be many limitations for certain types of losses, such as theft, mysterious disappearance, and misplacement.

Confused yet???

Here is a quick rundown on common limitations that can be found in almost every standard homeowner’s insurance policy written in today’s insurance market in Charleston and Mount Pleasant.

• Jewelry- $1,500 policy limit if by theft
• Fine Art- Actual Cash Value Settlement
• Firearms- $2,500 policy limit if by theft
• Silver & Goldware- $2,000 policy limit by theft

As an example, if you have a standard insurance policy and your home is broken into and a thief steals all of your jewelry, the most you will get from insurance is $1,500 total. Not per piece. Total. This could leave you out of pocket tens of thousands of dollars.

Due to all of this confusion, our first piece of advice is to work with a local and trusted independent insurance agency right here in Charleston and Mount Pleasant that can help you identify what coverages you have, where limitations might be lurking, and most importantly, how to properly insure the valuable items that are important to you.

Many Charleston and Mount Pleasant families ask “how do you fix this gap in coverage?” The answer is simple. We simply write a separate policy for your valuable items. This policy has many names but is often referred to as a Personal Article Floater (PAF) or Valuable Items Policy. The next statement from clients is that this PAF policy must be expensive. The answer is that it is not. PAF policies are very affordable and provide a lot of value. Below are a few examples and benefits of a PAF policy.

• Jewelry might cost $1 per $100 of insurance, so a $10,000 ring might cost $100 per year to insure. Think of replacing that ring should you have to pay out of pocket! What if the stone falls out? That is covered too! Oh, and there is no deductible that applies, so this is first dollar coverage!
• Fine art might cost $.15 per $100 of insurance, so if you have a $25,000 piece of art it might cost $37.50 per year to insure. That is cheap! One significant piece of value when you schedule fine art of a PAF policy is that is an agreed value. Meaning, whatever the insurance company is insuring it for, that is what you get. If you do not have fine art scheduled, then you are leaving it up to the insurance company to value, and this can cost you. Typically, no deductibles apply for fine art on a PAF policy.

Benefits of having a PAF or Valuable Items Policy

• Very inexpensive way to insure your most prized possessions.
• First dollar coverage, meaning no deductibles apply (typically).
• Extremely broad and worldwide coverage.
• Misplacement, mysterious disappearance, loss of a stone are all covered under a PAF policy but not a standard homeowner’s policy.
• Agreed value versus letting the insurance company decide.
• You can reduce the overall coverage of your personal property limit on your homeowner’s policy. Meaning there is no reason to double insure the same items. You will find that it costs far less here on the coast to schedule fine art than to include it in your personal property value on your homeowner’s policy…and the coverage is far superior, as well.

Keep in mind that valuations need to be established when we schedule items on a PAF or Valuable Items Policy. Typically, this is done by an appraiser. Most appraisals need to have been completed within the most recent three year period for it to be honored. It is also important to get appraisals redone every few years due to the fact that many values can increase significantly even over a three year period.

In closing, homeowner’s policies can be very broad on one stance, but also very limiting on the other. The fact that, in general, insurance can be so confusing for so many Charleston and Mount Pleasant families, we strongly recommend working with a local and trusted independent agency to walk you through the process. If you have any valuable items, we strongly encourage you to consider a PAF or Valuable Items policy to properly insure those items should something happen.

For assistance with your current or a new PAF or Valuable Items Policy, please do not hesitate to reach out to our agency for assistance. There is never an obligation to work with us but hopefully you will see the valuable that we bring to the table and will give us an opportunity to earn your trust and business. To contact us, fill out the form on this page or call us at 843.763.4200.