10 Things Your Homeowners Insurance Isn’t Covering Enough
Fact-checked with HomeInsurance.com
As you get further into spring cleaning (and closer to vacation!) you may start uncovering things you hadn’t seen or thought about in awhile, or as you organize, you may see quite a collection of a preferred “habit” starting to form. You may find many surprises along the way (but hopefully not something that laid down and died.)
The feeling of finding something you’d forgotten about or lost is a great feeling. However, the feeling of losing something valuable (whether monetarily or personally) is heartbreaking. Any women who have ever lost diamond rings know exactly what that feeling is like. How could something so small cause such a sinking, sick feeling?
They say the best things come in small packages — with the exception of the small “package” of coverage your homeowners insurance policy offers for valuables like jewelry though. As many learn too late, it’s the smallest things, the most unsuspecting things, the most valuable, or any combo of those three, that will end up being lost, damaged, or destroyed, or are about 98% more likely to be grossly underinsured on homeowners insurance. Diamond rings aren’t cheap, so why do we just skip over the part where homeowners insurance tells us jewelry is only insured up to $1K for theft, for example?
Before you find out too late, here’s a list of the most common types of personal property that need more coverage than what’s provided on a standard homeowners insurance policy, how much coverage you have, and what extra coverage you probably need.
Personal Property That Needs Insurance Coverage
The average home now has more TVs than people, and it’s possible your standard insurance policy won’t cover them, much less the rest of the electronics in your house. Twenty years ago, a $1K policy limit on electronics may have covered everything (and some more!), but today, it won’t even come close in the event of a major disaster.
Diamonds may be a girl’s best friend, but when diamonds go missing, insurance is your best friend. Or your worst enemy if you don’t have enough coverage. Bits and baubles come with policy limitations — limits probably only sufficient for a Beverly Hills one-year-old’s first diamond studs. The typical per-theft dollar limit is $1K. That’s the jewelry limit for an entire claim — not a $1K limit per item. That’s the entire claim, and if you lose a stone, you’re not covered at all.
3. Musical Instruments
Although there aren’t policy limits on musical instruments, there are still coverage gaps. Average homeowner policies don’t cover damage or breakage, and there’s not any coverage if the musical instrument is taken outside the home. The average household is less likely to have to worry about this, but you don’t have to be Mariah Carey (who owns Marilyn Monroe’s white baby grand) or Slash to need more coverage. Like everything else, musical instruments usually aren’t cheap, and if you have any kind of antique instrument, like an 18th century French violin, you need to head out to the highway and get your violin appraised.
A basic homeowner policy has a coverage limit of $2K to $3K for guns, so if you have a few for recreational use, this may be sufficient. For some people, guns are a hobby, and big gun collections can mean big claims — that are denied if you don’t have enough coverage. Given recent reports of people buying up guns in a hurry in various retailers across the country, a lot of people are probably sitting on a lot of guns without much insurance at all.
You may have dodged red paint a couple times, but that’s not the only thing you have to worry about when it comes to furs. If a thief takes your fur, you may be left with nothing to show for it. Furs are normally included in jewelry policy limits, so if you’re traveling in style and have your jewelry and furs taken, remember you can only claim up to $1K collectively. That $1K payout would barely be worth the time it took to make the claim when there’s no telling how much you’d lose if furs and jewelry were both stolen.
6. Artwork & Antiques
You simply can’t put a value on your children’s finger painting. There’s not any amount an insurance company could pay you when such treasures are damaged or destroyed, but if other artists grace the walls of your home too, whether an oil painting from a local artist, or an original Andy Warhol, you can and need to get more coverage. This can be a sticky situation if your original Renoir gets stolen, but the average homeowner or even fairly average art collector or enthusiast needs more coverage. Basic homeowner policies don’t even come close to providing enough protection for items like this. To avoid this, buy special coverage for your artwork — and beware of anyone in a ski mask. And any suspicious looking couples like Catherine Zeta-Jones and Sean Connery (who portrayed two skillful art thieves in Entrapment — ironically, she was an insurance agent sent to find and capture him).
7. Coins & Money
“Find a penny, pick it up, and all that day you’ll have good luck.”
Hopefully that luck sticks, because avid coin collectors may be upset to learn that most homeowner insurance policies only have a $200 coverage limit on money. This counts the money in your wallet at the time of loss too, including banknotes, bullion, medals, and coins. This is true for coin collectors and those who keep cash in their home too, whether it’s a lot of cash because of a fear of banks, or who don’t put all their “eggs in one basket.” If you know there’s $200 or more in your home regularly, play it safe and buy extra coverage if available. There are different considerations, exclusions, and rules that come along with coverage when it’s specifically all about cash versus something like coin collections, but it’s worth learning the ins and outs.
Coin collectors are the ones who really need to be on top of this. Unlike the everyday dollar bills we use (which we constantly fear is losing value), coin collections usually appreciate in value as time goes on. If you have some bad luck, your coin and money collection is stolen, and your insurer barely covers the cost of the box you kept them in, it’s not because you stepped on a coin tails up. It will be because you simply didn’t seek out and purchase extra coverage. Even if you do that, you need to have them appraised to ensure you’re buying a sufficient amount of coverage, and ideally, have them appraised annually. If not annually, then at least bi-annually. Sync up appraisal times with the release of an annual or bi-annual coin and you won’t have to worry about a lucky penny.
8. Stamps & Valuable Papers
A typical policy limit on important papers is $1K, but normally it’s not the actual piece of paper that holds the value — it’s the information on the paper. Things like stamp collections can be insured for a higher amount, but keep passports and tickets in a safety deposit box. Additionally, make sure nobody uses parts of your collection, like stamps to mail letters for example. Oh wait – that’s right. We don’t really do the stamp and S.W.A.K.’ed snail mail thing anymore.
9. Cards & Comics
All Big Bang Theory fans that are real life versions of the “geeks” on the show, take note. When it comes to collections, it can be hard to prove value, and many homeowner policies only provide standard coverage. If you can prove authenticity and condition, you may get more money from your claim, but if you can’t name the value of each card or comic, you’ll likely have to sit this one out. It may be a homerun for the thief with your collection, but it’s multiple, major strike-outs for you.
10. Silver & Gold
Most homeowner policies have a limit ranging anywhere from $2,500 to $5,000 for silver, gold, and pewter, including dinnerware, silverware, and anything else containing the metal. If your valuable pieces are only plated in expensive metals, this limit will suffice, but if you have solid pieces, you probably need more protection.
Protecting Your Personal Belongings
You may just now realize how vulnerable you are to policy gaps, but there’s no need to worry. This can be easily fixed.
One of the most common methods of adding coverage to your personal belongings is to add endorsements. Scheduling personal property is one of the best ways to protect your valuable items by adding dollar limit coverage and extending cause of loss circumstances. It does require some leg work on your part, and you’ll be required to make an extensive inventory of all your valuable items.
While tedious, doing this ensures you have the best coverage possible. You won’t have a deductible, and claim settlements are easier. The only disadvantage could be if your belongings gain value annually, like expensive artwork does. You’d have to get an appraisal annually, which can seem nearly impossible to do and likely won’t be a time you look forward to as much as Christmas, but it’s imperative. How imperative it is depends on the belongings, their worth, and if you regularly add to a collection. If you have something that appreciates as a general rule, it’s worth the extra time. Remember too that whenever adding to a collection, that item has its own value and often changes the value of your entire collection, most likely increasing the collection’s value.
Another strategy for covering mid-range value items, like electronics, is to buy special perils coverage. This covers bizarre accidents that caused damage or destroyed your personal belongings, and not just theft. You spill wine on that antique ink-dyed rug? It’s covered under special perils. You throw your Wii remote through the TV screen? Covered under special perils. When your new, huge TV spontaneously combusts in front of your eyes? Covered under special perils.
Your stamp collection and electronics collection destroyed by flood water? NOT covered. Similarly to the way homeowners insurance won’t pay for structural flood damage, it won’t pay for damaged or destroyed contents either. If you’re in a high-risk zone and have a mortgage from a federally regulated or insured lender, you’re required to carry flood coverage. However, flood insurance, a federally-run insurance policy only available from the National Flood Insurance Program (NFIP), doesn’t cover personal belongings/contents. However, NFIP offers a second flood insurance policy solely for contents with $100K limits, the only way to insure contents against flood. Flood insurance isn’t as pricey as you may think, and can be priceless in flood losses. For $100K in building coverage and $40K in contents coverage, premiums start at $274 a year. Whether in a high-risk flood zone or not, suffering huge losses because of failure to know policy limits is frustrating enough. Imagine the frustration upon discovering you have absolutely no coverage for contents destroyed or damaged by flood.
We value the roof over our head, but in some cases, it’s what’s under our roof that can mean the most, as well as possibly carry a higher value (relatively speaking) than our home. Even minimalists hold on to certain items that have intrinsic value. For families who own property of any kind that’s worth a lot of money, it’s relatively inexpensive to obtain sufficient coverage by some means. That extra coverage is worth every penny — just as long as it’s not a penny from your coin collection.