There’s something timeless about giving or receiving a precious piece of jewelry, from the sparkle of a diamond necklace passed down through generations to the joy of wearing a newly gifted timepiece. Building a personal collection over time, such as fine art that tells a story, a climate-controlled cellar of vintage wines, or rare coins and collectibles carefully sourced throughout the years, provides fulfillment to others. These possessions carry emotional significance and substantial financial value. Unfortunately, many homeowners mistakenly believe their standard policy offers sufficient protection when in reality, it often does not.
Why Homeowners Insurance Isn’t Enough
Most homeowners policies, including those designed for high-net-worth households, include sublimits on categories such as jewelry, fine art, firearms, coins and other collectibles. These sublimits typically cover a fraction of an item’s actual value. For example, if a high-end watch like a Rolex or Patek Philippe is stolen while traveling, that loss will exceed what your homeowners policy provides.
Scheduling Items on Your Homeowners Insurance vs. Buying a Separate Policy
You can insure valuables by scheduling them on your homeowners policy or purchasing a separate valuables and collectibles policy, often referred to as a personal articles floater.
Scheduling items on an existing policy can be a practical option for smaller collections. However, it is often best to buy a separate policy. First, any claims filed against the valuables coverage won’t impact your homeowners policy or future premiums and insurability.
What Is Covered Under Valuables & Collectibles Insurance
A separate policy typically includes comprehensive coverage for theft, accidental loss or damage, including mysterious disappearance (for example, when an item is misplaced but not necessarily stolen). You can cover jewelry, antiques, wine, stamp and coin collections, fine art, musical instruments, silverware and other collectibles.
Additionally, coverage is worldwide, so if your diamond earrings go missing on a trip to Paris, your protection travels with you.
Agreed Value vs. Replacement Cost
When purchasing valuables and collectibles coverage, you can choose between agreed value and replacement cost options.
- Agreed value coverage pays the exact amount listed on your policy if the item is lost or destroyed. The value is determined up front based on appraisal or purchase documentation.
- Replacement cost reimburses you for what it would cost to replace the item in today’s market, which can fluctuate depending on factors such as craftsmanship, rarity or material value.
Blanket vs. Scheduled Coverage
You can insure valuables individually (scheduled) or under one blanket limit.
- Scheduled coverage lists each item separately, along with its own insured value, and often requires supporting appraisals or receipts. This is ideal for unique or high-value pieces, ensuring precise protection for each one.
- Blanket coverage provides a single total limit, such as $250,000 for all jewelry, eliminating the need to document every item up front. While this approach may be convenient, it is subject to a limit per any one item. In addition, blanket coverage is carrier specific and may not be available for all valuable collections.
The Role of Appraisals
Accurate appraisals are critical for proper protection. Insurers typically require appraisals for items above certain thresholds. Appraisals must generally be updated every five years to reflect current market trends and help ensure that compensation aligns with the item’s true value in the event of a covered loss. Appraisals also provide proof of ownership and simplify the claims process.
Risk Management: Protecting Your Valuables
When evaluating coverage for valuables, depending on the items, insurance companies will ask about storage, security and environmental controls. They will want to know if jewelry is kept in a permanently installed safe, for example.
For fine art, insurers may review where pieces are displayed, the type of lighting used and whether humidity or UV exposure could cause long-term damage. Likewise, for wine collections, they may assess the temperature stability and humidity levels of a cellar, since equipment malfunctions or water intrusion can quickly spoil even the most carefully curated vintages.
Insurers often provide recommendations, or even require, that valuables be relocated for enhanced protection to reduce risk. These measures not only safeguard the items but also prevent a potential loss.
Protect What Matters Most
With the holidays right around the corner and new valuables purchased or gifted, this is an ideal time to remind you to properly protect your personal investments, memories and sometimes legacies. Whether it’s a family heirloom, a growing art collection or the reward of a lifelong passion for fine wine, taking time to insure and protect these treasures is the most responsible step any collector or owner can take.
Contact HWP
At HWP, we specialize in providing insurance solutions for valuables and collections across Virginia, Maryland and Washington, D.C. Our dedicated team understands the unique intricacies of insuring prized assets. Whether it’s art, jewelry or rare collectibles, our tailored plans ensure they’re safeguarded to their full value. Connect with one of our insurance advisors today.
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