Scheduling Items on your Homeowners policy
The term “Homeowners Insurance” is used for insurance policies that insure a person’s primary, owner-occupied residence. This can be a single family home, a multi-family (up to 4 apartments) home, an apartment or condominium. Each residence is insured through a different type of “homeowners” policy. Each policy covers personal property.
When you purchase a homeowners insurance policy, you are insuring the dwelling, if you own it, along with the personal property that you own. Based on your choice, your policy will either insure you for Actual Cash Value (ACV) which is the cost new minus depreciation for the age of the item or Replacement Cost Coverage (RC) which reimburses you to purchase a new, similar item to replace one damaged or stolen from a claim. An example is a stolen five-year-old television that cost $500 new. With ACV you might get paid $200 as a depreciated settlement OR with RC you would be reimbursed for the cost of a $500+/- new TV. You must purchase the replacement item before you receive payment. These claims are also subject to the policy deductible.
Although your policy shows an amount of coverage for “Personal Property,” there are limits on some items. These items need to be “scheduled” for their value on your policy.
Even a “schedule” has terms, conditions and limitations.
Items that may need to be scheduled
The coverage on the standard policy includes, but is not limited to:
- Money $200
- securities $1500
- watercraft $1500
- trailers $1500
- jewelry
- furs
- watches
- semi-precious stones theft $1500
- silverware $2500
- firearms $2500
- business property $2500.
Other items can also have limitations. The best way to insure these items and to ensure that they are covered for their value is by “scheduling” them on your policy for the actual value. This is done by having the item appraised; or if newly purchased, providing a bill of sale. Diamonds can appreciate in value but you will never be paid more than the amount that they are insured for. Jewelry should be appraised every few years to be sure your coverage stays current.
Fine Arts also need to be insured for their value. Other items you can schedule are hearing aids, golf equipment and cameras. If you accidently dropped your camcorder into the water while filming, it would be insured if you had it scheduled on your policy.
When you schedule jewelry on your policy, you are insured if a stone falls out of the setting, if one item in a set is lost or even for a mysterious disappearance. The insurance company charges you a rate per $100 of value to insure these items. By scheduling special items, they are not subject to depreciation or the policy deductible. If your collection of jewelry or your fine art has a very high value, it might be necessary to purchase a separate policy. A fine arts collection of $1 million would not normally be scheduled on a homeowners’ policy, but would be insured separately. The same is true for high value jewelry items.
Consider what is valuable to you
Your policy covers your regular personal property. To determine what should be insured separately, consider the items that you would choose to transport yourself, if you were moving. The items that are valuable to you are probably the ones that should be insured for their value. A phone call to your agent will help with your decision.
After a loss, it is always the responsibility of the insured person to prove that they owned the item and that it was lost or damaged in a claim. All thefts must be documented with a police report. Depending on the circumstances of the loss there may be a deposition required by the insurance company prior to payment of the claim.
Remember, to be an informed consumer you need to review your policy and be sure to ask questions.
DISCLAIMER: All policies have terms, conditions, limitations and exclusions. You must refer to your policy and to your company to find out exactly how you are insured. States regulate the insurance companies in their jurisdictions and policies can fluctuate from one company to another. You must be vigilant and review your policy and ask questions of your agent.