When it comes to insuring your valuables, it is important to be aware of special limits that apply to high value items like jewelry, artwork, guns, and more. This blog will outline the common items that may have these limitations and how you can better protect your prized possessions.
What are Insurance Sublimits?
Most property insurance policies including homeowners, landlord, and rental policies include “sublimits.” Think of sublimits as exceptions to your personal property (Coverage C) that apply to certain items in specific types of losses, like theft. Essentially, sublimits place a restriction on how much insurance will reimburse you for the loss of a specific item.
Let’s look at an example.
You have a total personal property coverage of $150,000, but your policy specifies a jewelry sublimit of $2,000. If your $6,000 ring is stolen, you will receive a maximum of $2,000 from the insurance company. Your deductible may also apply, further limiting the amount you receive. Even though your personal property coverage looked like it was more than enough to fully cover your ring, the sublimit overrode the coverage.
Sublimits exist to protect insurance companies from those who want to commit fraud by faking that their valuables were stolen or damaged. Therefore, you will often see sublimits on more unique and expensive valuables like computers, firearms, instruments, and jewelry.
Examples of Sublimated Items and Amounts
Depending on your insurance policy and company, you will have different sublimits. Common sublimits for a basic homeowners policy are listed below. It is important to review your policy documents to see what limits apply to you. Contact an agent for assistance reviewing your coverage.
Computers: $1,500
Fine Art: $2,500
Firearms: $2,000
Furs: $1,500
Home-Theater Systems: $1,500
Gold and Silver Coins: $200
Jewelry: $1,000 to $5,000
Musical Instruments: $2,500
Stamps: $1,500
Protect Your Valuables with a Personal Articles Floater
Here’s the good news – many insurance companies offer an easy way to increase your coverage for these items to ensure you can fully recover their value: a personal article floater (PAF). With a PAF, each item is listed separately with a description and specific value. A PAF is recommended for anyone with belongings that exceed the sublimits on their policy.
Getting a PAF is easy and tends to be affordable, especially in comparison to the cost of replacing a high-value item. Hillock Insurance can help you insure your jewelry, guns, instruments, computers, cameras, and other special items.
How to Insure Expensive Personal Belongings
Follow these steps to protect your unique and precious belongings.
Collect receipts and/or appraisals. You will need to prove the value for any item you want to insure. The easiest way to do this is to take a picture of the item’s receipt. Don’t forget accessories like a scope for your hunting rifle.If you do not have the receipt or the item’s value is negotiable – like fine art – you may need to get an appraisal. Appraisals can be completed by a professional of your choice. We also recommend taking photos of your belongings.
Contact an agent for a quote. Now, take your receipts and appraisals to your insurance agent. It is easiest to combine a PAF with a home or renters policy. If you do not have a home or renters policy, stand-alone PAF policies are available. Be sure to let your agent know if the valuables are kept in a safe or other secure location as this may qualify you for a discount.
Review the coverages and premium annually. Review the quote to ensure item descriptions are clear and accurate and the values are listed correctly. Once you are satisfied, pay the policy premium. Monthly or yearly payment plans are often available.We recommend reviewing all of your insurance policies, including your PAF, every year. Remove items you have sold, add items you acquired, and adjust values if necessary.
PAFs may be an important addition to your insurance portfolio. If you think your items may exceed your policy’s sublimit, please contact us for support.
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