People buy homeowners insurance for the protection it provides their belongings. However, under standard homeowners policies, there will be limits to how much compensation you might receive for a claim. When it comes to high-value or collectible items, you might face a significant deficit. What are some of the ways you can expand your homeowners policy to insure these high-value items?
Insurance for High-Value Possessions
The more value you try to insure on an insurance policy, the more cost risk it poses to the insurer. That’s why, as you increase your possessions insurance coverage, you will likely pay a bit more for your coverage. Also, insurers will often set strict terms on how they will pay you for possessions damage. That way, they can further manage their investment risk in you. As a result, you might not be able to get full coverage for possessions of exceptional value. Indeed, some policies specifically exclude coverage for high-value belongings. They simply cannot assume the cost risk of covering them.
Commonly, insurers pay for damaged items only at their actual cash value. This is an item’s used value at the time of the loss. For your everyday belongings, this might prove an adequate settlement. Still, you won't receive the full value you need to buy a new item. However, it might not prove helpful when it comes to your collectible, antique or high-value belongings.
All the same, there are ways to still insure your possessions of value under your homeowners insurance. It just might take a few extra steps to do so.
- Some homeowners choose an expanded possessions insurance endorsement for replacement cost coverage. With this endorsement, the policy will pay based on the value of a new item. Therefore, you will receive more in compensation than you would from cash value coverage. This will better enable you to replace expensive items.
- Though collectible or antique items might have limited standard coverage, you can still buy adequate coverage for them through a scheduled items rider. This endorsement will allow you to insure a particular possession for its exact value. So, if you need to insure a collection of antique china, then this might be your solution. You can ensure you have coverage directed at that specific item.
- In some cases, you can buy a separate collectible items insurance policy. This coverage will provide more tailored protection for unique items like coins, stamps or other collectibles. You'll make a claim on this coverage separately from the claim on your homeowners insurance.
When getting home insurance, tell your agent about any valuable items that you want to insure. They can help you determine the best way to do so using your possessions coverage and expanded coverage options.