Your Homeowners Insurance Could Leave You Underwater — Why You May Need a Floater

It’s been the vacation of a lifetime. The kids were well-behaved, the food was superb and the weather was picture perfect. You’re on the way home when a sudden pang hits you in your gut: you left your favorite — and very expensive — watch on the dresser in the hotel room.

If you’re like most people, you assume your homeowners insurance will reimburse you for the loss. It might — but unless you upgraded your coverage, it’s more likely your treasured timepiece is not fully covered. Most homeowners policies cover losses to personal property, including jewelry, art, collectibles and the like. But the amount you can recover — especially for smaller items that are easily carried and stolen — may be limited. For example, the loss of a single item may be as low as $1,500, and there may be a loss limit of just $5,000 or less in total. Your rare Victorian pocket watch? Not fully covered. Your two-carat solitaire engagement ring? Probably not fully covered either.

How to Protect Your Valuables

There are solutions. Generally, the least expensive option is to increase the policy limits for loss or theft of your valuable items, though this may still be subject to relatively low limits.

The other way is to add a policy rider to cover valuables. Also known as a “floater” policy, these can provide coverage in almost any amount you choose — though higher values will obviously come with higher premiums. Typically, a floater policy will cover one item. If you must insure several items, you may need individual floater policies for each one.

Valuables Coverage Isn’t Only for the Rich

The kinds of things you might insure with a floater policy aren’t necessarily exotic items exclusive to wealthy collectors, such as an 18th-century violin or an original Salvador Dali painting. They can include common items in people’s homes, such as:

•   Collectibles. Your Hummel porcelain figurines, stamp collection or authenticated movie props are probably worth more than your current policy limits.

•   Antiques. That 100-year-old handmade model of the Mayflower, the 19th-century mantel clock and your great-grandfather’s pocket watch are probably not fully covered.

•   Fine art. Even if it’s not by a “name” artist, the worth of your original wall decor could fall short of standard protection limits.

•   Jewelry. You don’t need to own a Rolex or a mega-rock diamond ring. Even the value of a modest Seiko watch or a tennis bracelet may leave you underinsured for those items.

•   Cameras. High-end camera equipment is both expensive and easily lost or stolen — but can be covered by a floater policy.

•   Electronics. If you’ve replaced a tablet, laptop or desktop computer recently, you know these can exceed standard coverage.

•   Firearms. Whether antique or modern, a single firearm can easily surpass your policy limits.

•   Designer or luxury items. That Louis Vuitton monogram canvas bag? Your one pair of Jimmy Choo shoes? Fur coat? Probably not fully covered.

Note that items for business use may be subject to different policy terms and coverage limits.

Assessing Your Assets

Do you really need a floater policy? Take a few minutes to walk around your house and write down things that could be carried away in a knapsack and stolen quickly. Open your jewelry box and poke around. Scan your collectibles cabinet. Look in your closet and peruse the shoe rack. Once you’ve captured everything, estimate a replacement value. The result will probably shock you, and it’s likely the total far exceeds your homeowners policy coverage limits.

While you’re at it, take individual photos of your valuables and back them up for safekeeping. Insurance professionals recommend you keep a visual record of valuables in case you have to file a claim, whether from a disaster or theft.

We Insure It All

The floater policy will likely require you to list your most valuable items individually and have them professionally appraised. Ask your We Insure agent about reputable appraisers in your area. But the real value of securing additional coverage is the peace of mind that comes from knowing your valuables are fully protected — so you can start planning your next vacation with fewer worries to take along with you.

Sources

https://www.iii.org/article/floaters-and-endorsements-special-coverage-valuables

https://www.investopedia.com/terms/f/floaterinsurance.asp

https://www.insuranceopedia.com/definition/346/floater-policy

https://www.businessinsider.com/personal-finance/homeowners-insurance-endorsements-riders-floaters

https://bagbirdy.com/handbag-insurance-how-to-insure-your-favorite-bag/

https://www.sounddollar.com/what-will-insuring-your-shoe-collection-cost