Your home renters’ insurance policy provides coverage for your belongings but there can be limits to coverage. The good news is that there are ways to adjust coverage to eliminate any gaps and protect the belongings that are most important to you.
Your home insurance policy protects your belongings from losses due to covered perils. In insurance-speak, a peril is just a risk. Most home insurance policies limit the number of covered perils to about 16 risks, including common causes of loss like fire or theft. If your jewellery or other valuables, like furs, is damaged or destroyed due to a named peril on your policy, you’ll have some coverage for the loss. However, other causes of loss, such as misplacing the item, are not covered. There’s a possible solution to this, called scheduled coverage, which can address some coverage gaps.
A standard home insurance policy also limits the coverage amount for some types of valuables. For example, jewellery may have a $1,500 coverage limit even if your personal property has an aggregate coverage limit of $100,000. Again, scheduled coverage can provide a solution to under-insured valuables.
What is the scheduled coverage? Scheduled coverage is a way to specifically insure valuables. If you have a $5,000 ring but your policy only covers losses up to $1,500 for jewellery, there’s a big gap in coverage. Most home insurance policies have similar structures which limit coverage for valuables to help keep costs lower for everyone. However, if you need better coverage, it’s usually available in the form of scheduled coverage. Some insurers also offer a personal articles policy, which serves a similar function.
With scheduled coverage, you provide the insurer with details of the specific item and proof of value, which can be a recent receipt or an appraisal. With this information, the insurer can insure that specific item for its full value. It’s also common to have several items scheduled. Musical instruments, fine watches, jewellery, art, and antiques are popular choices for scheduled coverage.
Advantages of scheduled coverage by using scheduled coverage for your valuables, you not only cover your valuables for their full value but you can also remove some restrictions on coverage. Where a standard home insurance policy provides coverage for a specific list of perils, scheduled coverage provides coverage for all perils — except those that are specifically excluded. Imagine dropping a wedding ring down the drain. With scheduled coverage, your policy can help cover the loss. However, a standard policy without scheduled coverage won’t provide protection in this example.
Deductibles are another consideration. The deductible is the part of the claim that you pay. Deductibles of $1,000 or more aren’t uncommon for a home insurance policy. The deductible can take a big bite out of the claim settlement if one or more valuable items are lost or damaged due to a covered claim. Scheduled coverage doesn’t use a deductible. Items covered by scheduled coverage are insured to their full value without a deduction.
To learn more about ways to insure your valuables, just reach out to your broker.