Insuring Your Valuables – Scheduled vs. Non-Scheduled Coverage

Once you reach the point in life where you start to accumulate “stuff” and furthermore, own items of significant value, you’ll need to have insurance on that “stuff”.  We all recognize the need (and responsibility) to carry auto insurance for our cars, and when we buy a home, we carry homeowners insurance.   For some people, this might be simply because banks won’t loan us money to purchase those things unless we have insurance, or we can’t register our vehicle without at least proof of liability insurance.  But, the most important reason is so that we can replace our “stuff” if something bad happens to it.  Here’s how it all works:

Property Insurance Basics

Property Insurance is designed to pay you when something happens to your property, whether it be the home itself, or the items inside.  There are caveats, of course.  Your insurance pays:

• If/when the “thing” that happens is a covered event, i.e. fire, wind, theft, sometimes even loss.
• Up to the amount of coverage you have.
• After you pay your deductible.

There are two types of coverage – Actual Cash Value and Replacement Cost.  Actual Cash Value will pay you what your item(s) are worth in their current condition, after depreciation.  For example, how much money do you think your aunt’s hand-me-down couch would bring at a garage sale?  Replacement Cost will pay what it would cost if you had to go out and buy a new item (even if your TV is 8 years old).  Pay attention to the coverage and choose wisely.

Non-Scheduled Personal Property Coverage

Personal Property Coverage protects your everyday “stuff” and those things will usually not be listed individually on your policy.  Think about your clothes, your furniture, your dishes and linens, even the food in your refrigerator.  It’s important to be able to prove to the insurance company that you own your “stuff” in case there is a major loss, like a fire.  Just take a video using your smart phone as you walk through your house, looking around, opening closets and drawers, etc.  This way, there will never be a dispute that you own 5 televisions, 2 X-Boxes, 3 iPads and 6 smartphones.

Of course, there are limits to what (and how much) coverage is offered for non-scheduled items.  Your policy will include a dollar limit, let’s say $25,000 in Personal Property.  If replacing all of your “stuff” would cost more than $25,000 to replace, you’d be left holding the bag for the remaining cost.  Also, on items like firearms and jewelry, a standard policy will offer only a certain amount, per item.  For example, if your policy will allow $500 per firearm, and you own two guns worth $1500 each, you’ll potentially lose $2000 if both guns were stolen or ruined in a house fire.  Also, you may not have any coverage for collections, such as coins or baseball cards, or your grandpa’s WWII medal.  Again, speak with your agent about your coverage, and choose wisely.

Scheduled Items Coverage

Scheduling items on your policy is simply providing your insurance company with a list (called a schedule) of items along with proof of their value, usually in the form of an appraisal.  Because there is additional cost associated with each scheduled item,  you’ll typically only schedule items of significant value.  Remember your expensive firearms, your wedding ring(s) and that World Series baseball signed by Willie Mays?  Yeah, those should be scheduled.  The good news is that if you accidentally leave your wedding ring in the hotel room and it goes home with the housekeeper, you’ll be covered!  Even better news, you won’t first have to pay your deductible.

If you  have any additional questions regarding this subject or any other personal insurance concerns, please feel free to contact me.