Many people like to collect things – stamps, comics, vases. If a product was made there’s likely a person collecting it. And collectors take pride in their collections, often showing them off in display cases for all to see. Some people might not be collectors, but nonetheless have antiques that have been handed down through the generations. Other people are pet people and have very expensive dogs, cats or fish. Special breeds could be very expensive to replace.
The question people with collections, antiques, or pets need to ask themselves is: Do I have the proper insurance for my possessions?
Many people don’t realize that their homeowner’s insurance, condo insurance or tenants insurance has certain limitations when it comes to belongings and possessions. As well, there are factors that affect whether or not a claim will pay out on an actual cash value basis (which includes depreciation) or a replacement cost basis (which allows someone to replace with new).
Here Are Some Examples of Special Limits on a Residential Property Policy
- Tools, books or instruments pertaining to a business covered, but only while on your premises, up to $2,500 total.
- Money, including cash or bullion up to $500 total
- You only get a limit of $2,500 for animals, fish and birds
These items have special limits that come into play in certain circumstances when the claim is not a specified peril:
- Jewelry, gems, watches and furs are covered up to $6,000 in total.
- Coin collections are covered up to $500.
- Collectibles such as sports cards or memorabilia and comic books up to $5,000.
- Works for art such as photographs, paintings, drawings etc. up to $15,000 per item.
How Can I Make Sure My Special Belongings Are Covered?
There are two issues when it comes to making a claim for some of your more treasured items. The first issue is you must be able to prove that you owned and had in your possession the item(s) in question. This could include photos, receipts, and, for expensive items, appraisals.
The second issue is ensuring you have the special or unique item(s) correctly insured on your property policy. Why is this important?
Reviewing the homeowner’s policy shows that antiques and other articles that cannot be replaced with new articles, because of their inherent nature, are only covered for actual cash value.
In order to get replacement cost or fair market value, these items would have to be appraised and scheduled on your policy. Scheduling an item means it is specifically listed on the policy for an additional fee.
You can get all the appraisals you want, but if the item is not scheduled, the insurance company is only responsible for an actual cash value settlement.
Visit these pages if you want a second opinion on your home insurance, tenants insurance or condo insurance.
Have any questions? – We’d love to answer them. Thank you for reading.
Back to the Fall 2015 ProvERB Insurance Bulletin.