My father, who was an insurance broker for 30 years, kept a slim little book near his desk called “So You Think You’re Covered?” Obviously, with all the many coverage changes over the years the book became dated to the point of near-obsolesence, but the concept remains true even to this day: Misconceptions about insurance coverage are common.
Here’s a recent example: A few weeks ago I received a call from one of our homeowners clients. She was upset because she had lost a pair of very old diamond earrings. Her grandmother had given them to her many years ago, so, as you can imagine, the sentimental value was very high. She wondered if her homeowners policy would cover the cost of replacing them. I checked her policy to determine if the earrings were “scheduled,” which means that the insurance company had been provided with an appraisal from a qualified jeweler describing the earrings and attesting to their value (if they’d been newer, the bill of sale would have sufficed). The earrings would thus have been “scheduled,” that is, insured separately and for their appraised value, on her policy under a personal articles floater for a small additional premium. Unfortunately, the earrings were not scheduled and the claim was denied under the “mysterious disappearance” (yes, it’s really called that) exclusion* on a homeowners policy. If the earrings had been scheduled, they would have been covered for their replacement cost.
Jewelry, and many other items, have coverage limitations under even the broadest homeowners policy. This is why every year we send our clients a letter asking them to consider and review if they own items, such as jewelry, silver, artwork, or antiques that may need to be scheduled. So, please don’t “think you’re covered” for a certain loss; call us and ask before it occurs.
*So, you’re probably asking, is my jewelry covered at all? Unscheduled jewelry is indeed covered under a homeowners policy, typically to a limit of about $2500, but is subject to the same conditions and exclusions, as well as the deductible, as other personal property. You’re covered for such perils as fire and theft, but if you lose an item of unscheduled jewelry, there’s no coverage. A scheduled item, however, would be covered if it were lost.