[Return] to Part 1
Remind Me About Homeowners Limitations
In part 1, we told you that the typical homeowners
policy contains substantial coverage limitations for certain types
of property. The modest insurance protection affects property
that is highly vulnerable to loss because it is targeted for theft
and/or has a high level of value in relation to its size. Examples
are gold, money/securities, precious metal-plated dinnerware,
jewelry, furs, stamps, electronic property, business property,
watercraft and firearms.
How Do You Handle The Limited Coverage
Situation?
You have to do something extra to your insurance
program. Insurance companies are happy to provide more coverage,
if they are paid for their trouble. Specifically, limited coverage
can be handled using the following methods:
Increased Coverage C Endorsement
- this form is only appropriate for property saddled with limited
coverage for theft losses. This form is attached to a basic policy
and it increases the theft insurance limit (ie. for jewelry from
$1,500 to $5,000).
Scheduled Personal Property Endorsement
- this form is used for increasing coverage for property that
has protection reduced for all sources of loss. The property is
removed from the basic policy's limits and is covered exclusively
by the endorsement. This form takes more work since each item
of property has to be listed and assigned a particular insurance
limit.
Inland Marine Property Floater
- this method works like the personal property endorsement, except
that it is a separate policy. This alternative is more appropriate
for persons owning substantial amounts of high-valued property.
The coverage must often be purchased from specialized insurers
and comes at a high cost. In order to qualify for such coverage,
you may need to meet special circumstances such as having a residential
alarm system or make use of vault storage.
Another Advantage Of Special Handling
In order to arrange coverage under a schedule
or an inland marine policy, the property must be properly valued.
This often involves appraising the property. It's very helpful
to have an expert source establish the current value of jewelry,
furs or other valuable possessions. In fact, such property should
be appraised every two or three years since their values often
increase over time.
Do you still have questions about property
that needs special handling? Talk to an insurance professional
about your needs and make sure that you have proper protection.
Please refer to part 1 for more information
on restrictions faced by certain types of personal property.