Don’t Expect Your Home Insurance to Protect Your Jewels and Baubles

If you own valuable jewelry, you might be surprised to find out that your home insurance policy has very limited coverage if that jewelry is lost or stolen. In most cases, the maximum you can recover from a standard home insurance policy is $500. This low amount is going to be insufficient to replace anything of significant value, so be sure to purchase additional insurance for these types of valuables. The type of policy that covers your jewelry is known as a floater. There are floaters that cover a variety of valuable items, but a jewelry floater is very specific to the items it covers.

Insurance floaters are known as such because they cover items that are not permanently affixed, such as actual structures inside your home, and therefore may easily “float” away. Floaters have also been known as “inland marine” policies, which evolved from marine insurance, the earliest form of property insurance. Marine policies covered cargo and ships during their voyages, but did not deal with the cargo after it was unloaded from the ship. Thus, a new form of insurance was developed to cover this risk and was given the curious name of inland marine, even though it was no longer maritime insurance. Floaters evolved from this affiliation with maritime insurance, which is evident in the term’s continued the nautical theme.

You might wonder, though, why all of your personal property is not covered on a floater policy, and why instead a majority of your personal property is included in your home insurance policy, which also insures your home itself. The reason for this inconsistency is because most of the personal property on your home insurance policy is not considered to be of very high value. To ensure this is the case, your very valuable personal property usually is limited to a smaller recovery than regular items on the home insurance policy. For example, if a catastrophe were to destroy all your possessions, the home insurance policy would replace the majority of personal property at their full replacement value regardless of where you live- Connecticut, Delaware, Georgia, Hawaii, Illinois. However, your jewelry that was destroyed would only be covered up to the lower limit specified on the home insurance policy.

The home insurance policy essentially forces you to insure your jewelry on a floater because it does not want to take on the risk of such items. Because the nature of jewelry insurance is very specialized, the home insurance company prefers to have another insurer that understands jewelry and the risk of loss take care of it. It’s also possible that your home insurance company may offer you a jewelry floater itself, as it might have underwriters that specialize in this unique risk. However, the jewelry floater will still be separate from your home insurance policy.

Insuring jewelry on a floater is not completely unlike insuring the rest of your personal property. One of the main differences is that you usually need to provide detailed information about each piece of jewelry. In most cases, you will be asked to provide an appraisal of the valuable from a certified appraiser. This sets the value of your jewelry and the item is “scheduled” onto the policy with a description. In the event of loss or theft, the floater policy will reimburse you the agreed-upon amount, and usually no deductible applies. Some insurance companies may provide you a discount if your items are stored in a safe and you wear them infrequently.

In addition, because jewelry tends to be very small, the individual pieces can be easily lost or stolen. For that reason, it’s always good practice to explore the option of insuring jewelry on a floater policy because you should definitely not assume that your regular home insurance policy would provide much, if any, protection for your jewelry.

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