By: Christian Underwood, Account Executive
‘Tis the season for giving! The holidays are a perfect opportunity to give your loved ones something special. You might even have a new ring, a new watch, or maybe a Daisy Red Ryder BB gun on your own wishlist. What happens if you lose that nice gift before it ever makes it under the tree? Is it covered?
During this season, it is important to make sure that your valuables are properly insured with a personal articles policy. Without this coverage, if the item was to get lost or stolen, you might be left paying the deductible on your homeowner’s policy in order to have it replaced - and that’s best-case scenario!
For this very reason, we want to ensure that you have clear answers to all of your questions regarding a personal articles policy so that you can make informed decisions when it comes time to cover your gifts throughout the holidays.
What is a personal articles policy?
Separate from your homeowner’s or renter’s policy, a personal articles policy gives you extra coverage for your more valuable items. With the ability to cover specific, or “scheduled” items, these policies often include things that are more easily lost, misplaced, or have a higher likelihood of being stolen. Jewelry and guns are the most common items you’ll find, but you can add anything that’s considered to be of higher value. For example, you may add a coin collection, fine art, camera, or bicycle.
How does it differ from my personal property insurance?
Personal property insurance on your homeowner’s policy covers everything in your home... from furniture to electronics, with special limits for higher value items like jewelry. If you were to take your home, flip it upside down and shake it, everything that fell onto the ceiling would be considered “personal property.”
However, on your basic homeowner’s or renter’s policy, you typically only have $2,500 in coverage. That means if someone stole $10,000 worth of your jewelry, you would only receive $2,500 for it. With a personal articles policy, if you had each piece of jewelry that was stolen listed on the policy, you’d be covered for the entire $10,000 without a deductible.
Similarly, you can also “blanket” these items on a personal articles policy. In this case, you do not have to itemize each individual item and there’s still no deductible.
If I have a personal articles policy, under what circumstances would my items be covered?
The personal articles policy ensures that your items are covered for theft, loss or misplacement, as well as mysterious disappearance. The rule of thumb is that it’s covered for everything except for what’s specifically excluded. These exclusions usually include wear and tear, or unlikely events. You’ll find those exclusions on your personal articles policy.
Would my items be replaced or would I be paid?
Whether you receive a replacement or cash value under the personal articles policy depends on your specific policy, the item, and the carrier. Jewelry and most other items are usually covered at replacement. For instance, if you lose a ring that was covered for $8,500 on a personal articles policy, the insurance company is going to try to find one of similar like, kind, and quality, meaning a ring that matches the same design, color, clarity, and karat.
Sometimes insurance companies will do what’s called an “agreed value”. This is used to cover fine art, though sometimes jewelry as well. In this case, the insurance company will simply pay the agreed amount; if you have an item scheduled for $8,500, that is the amount they’re going to pay in the event of a loss.
How much does a personal articles policy cost?
Personal articles policies are typically very affordable! Depending on the insurance company, where you live, and other factors, these policies typically cost about 80 – 90 cents per $100. I have customers with $12,000 worth of jewelry, and a policy that only costs them $125 for the entire year.
How should I know if I need to insure a valuable item or not?
Of course, it is a (wise) personal decision. If you’re on the fence about whether or not to insure an item, ask yourself, “Could I replace this item immediately and comfortably if something were to happen to it?” If you couldn’t replace the item immediately if it were lost or stolen, we recommend talking to your agent about getting a policy to cover it.
I know that if I lost my wife’s wedding ring, I would be in trouble! However, with my personal articles policy I have peace of mind knowing that if I (or my wife) lose her ring, it’s covered.
Remember to Protect Your Valuable Items this Holiday Season
Regardless of whether you decide to purchase a policy, when you’re not using or wearing valuable items such as jewelry or guns, put them in bank vault or fire proof safe in your home for better protection. We strongly encourage everyone to get a personal articles policy for their most valuable items and would love to help you do so. More times than not, those that did not originally get a personal articles floater policy... really regretted it when something went missing!
Byars|Wright has developed into a major provider of commercial insurance that delivers a wide-range of insurance products with quality coverage at competitive prices. As an independent insurance agency, we represent numerous companies, all with a history of excellent service. Through these companies, we will find the best pricing and coverage available for our customers. We hope you’ll reach out to us today online or give us a call at (205) 694-0088. At Byars|Wright, Relationships Matter.