How to Properly Insure High-Value Items

Properly Insuring High-Value Items

When the topic of how to insure high-value items comes up, people often assume one of two things. Either they think, "I already have homeowners insurance, so my belongings are fully covered," or they think, "I don't have any high-value items, so that doesn't apply to me." However, there's a good chance that both assumptions are incorrect.

It's necessary to insure high-value items correctly. Hence, you're able to replace them with items of similar value if they're destroyed or stolen—and the truth is that even people who are not wealthy likely have at least a few belongings that do qualify as high value and won't be fully covered by a standard home insurance policy or tenant insurance policy. Here is some advice from the knowledgeable brokers at Morison Insurance on what you need to do to insure high-value items and why it's so important.

Why You Need Personal Articles Floaters to Insure High-Value Items

Before addressing the matter of how to insure high-value items, it makes sense to ensure that we're all on the same page about why it's necessary. You likely already have an Ontario high-value home insurance, tenant insurance or condo insurance policy in place, so you know that part of your policy is contents insurance that covers your personal belongings up to a certain personal property coverage limit listed on your policy.

You may not realize that certain high-value items are subject to special policy limits from your insurance company. That means that the overall coverage limit doesn't necessarily apply to everything you own. For example, suppose you have an expensive musical instrument used solely for personal use that is worth less than your contents coverage limit. In that case, you may assume that you will be able to get the total replacement cost for your instrument should it be stolen or destroyed, but that's not necessarily the case. If your policy features a particular limit for musical instruments—and they typically do—you can only get insurance compensation to replace that specific item up to the particular limit for musical instruments subject to your policy deductible. That leaves a coverage gap in which your instrument is not fully insured, and you'll be responsible for covering any replacement costs that exceed the particular limit. Adding a personal articles floater to your existing policy gives you the extra coverage necessary to raise the limit to the value of the item or collection in question so you can receive the insurance compensation to replace it without paying anything out of pocket.

What You Need to Know to Insure High-Value Items

Now that you know more about why it's so important to insure high-value items fully and adequately with personal articles floaters, you may be wondering how exactly to do that. Here are some of the critical points you need to know about to insure high-value items.

Designated Amounts

One thing you need to know about how to insure high-value items is that you need a designated amount for each and every item on your inventory list. That's necessary because your insurance company needs to know how much it will cost to replace each item so they can determine how much additional coverage you need and how it will impact your premiums. There are two main ways to designate an amount for any given item: by receipt or by appraisal.

This (along with tax purposes) is why saving receipts from every major purchase is a good idea. If you can show a receipt that states how much you paid for the items you want to insure, there's no need to worry about an appraisal. But receipts, much like stray socks, sometimes have a way of just disappearing, never to be found again. You may have items that were given to you as a gift or that you inherited from family members. Or, you may be trying to insure high-value items such as a stamp collection with hundreds or thousands of stamps that you couldn't have individual receipts for. In those cases, an expert appraisal is necessary to determine the designated value for replacement or insurance compensation should the item go missing or be destroyed.

Separate Floater for Each Category

People sometimes assume that they can have one personal articles floater to insure high-value items, but it doesn't necessarily work that way. Different categories of items have different special limits, so adding an additional personal articles floater for each category of high-value items is necessary. For example, you could insure a ring, necklace, bracelet and all your other high-value jewellery on a single personal articles floater. Still, if you also wanted to insure high-value items such as sports equipment, you can't combine that on the same floater as your jewellery because it falls into a different category.

Mysterious Disappearances

If something is stolen or destroyed, most people understand that's exactly what proper contents insurance coverage is for—to avoid financial loss by getting insurance compensation to replace the item with a similar value. But when people lose things, they sometimes don't realize that their insurance coverage also applies to that "mysterious disappearance." While mysterious disappearances may or may not be covered by the contents portion of a standard homeowners insurance policy, they are covered by a personal articles floater.

For example, you've gotten engaged and lost some weight while preparing for the wedding, causing your beautiful diamond engagement ring to become a bit loose on your finger. One day you glance down at your hand, and it's just gone—it must have slipped off your finger while you were out of the house, and there's pretty much no hope of recovering it. That qualifies as a mysterious disappearance, and if a personal articles floater covered your ring, you could get the necessary funds to replace it from your insurance provider.

Items That Typically Have Special Limits on Home Insurance Policies

We mentioned above that high-value items have special limits on home, tenant, and condo insurance. It's important to understand that each category of an item requires its own individual personal articles floater. Here are some examples of the types of categories that typically feature special limits:

• Musical instruments
• Jewellery
• Art collections
• Antique collections
• Collection of items such as a stamp collection, coin collection or sports card collection
• Sports equipment like golf clubs or bicycles
• Fur coats and other furs
• Firearms
• Medical devices such as wheelchairs and prosthetics
• Some types of electronic equipment, such as cameras and computers
• Any single bicycle, including e-bikes

The categories and applicable limits can vary somewhat according to your particular insurance provider, so if you're not sure strictly which limits apply to which types of items, the best course of action is to contact your Morison Insurance broker and chat with them about both your overall policy and any specific items you want to insure.

Depending on the value of your items, some require their own policy. This may apply to items such as jewellery insurance, musical instrument insurance, wine cellar insurance etc.

How to Create a Home Inventory List to Help Insure High-Value Items

One of the most important steps to insure high-value items is one that many people would prefer to skip, but it's indispensable. The best way to get started is by completing a home inventory list of all high-value items you own, and your inventory list should include more information than just the names of the items in question. It's essential to be thorough, and if you need clarification on whether something belongs on the list, add it and discuss it with your broker at Morison Insurance. It's better to add something that may not belong on the list than it is to leave something off that needs to be there.

Making an inventory list when you want to insure high-value items can feel like a significant challenge, especially if you need help figuring out where to start, what information to include and how to get it done. Here are a few tips to help the process go more smoothly.

• Start by choosing your method of recording your inventory list. Some people use specialized apps or software, and some stick to a simple spreadsheet. It's best to select a digital method (or at least transcribe your handwritten list into a computer once you've written it out) because it's easier to share and store and allows you to attach media like videos and photos.
• Whatever method you use, the key is to have multiple copies of your completed inventory list stored in various locations. You should print out a hardcopy version and a version stored on the internet at a minimum, in case something happens to one or the other.
• Your list should include more than just the name of the item. To insure high-value items, you need a designated value for each entry on the list. The best way to accomplish that is to attach copies of receipts and professional appraisal amounts to the list so everything is together in one place. You should also write down the serial numbers for electronics like computers or appliances.
• Including photos or videos on your inventory list is also an excellent way to insure high-value items. Don't worry; they don't have to be Oscar-worthy—just try to capture the item as a whole and zoom in on important information like brand names and identifying details.

The Cost of Adding Floaters to Insure High-Value Items

You can expect to pay no specific amount to insure high-value items with one or multiple personal articles floaters because the cost will vary depending on the value of the insured items. Most insurance companies charge a set rate for every $100 of required insurance coverage. For example, if the set rate was $2 for every $100 of insurance required, insuring $1000 worth of jewellery would cost $20. Of course, that's just an example and could differ depending on the insurance company and the category of the covered item.

Find Out More From Your Morison Insurance Broker

If you need more information about how to insure high-value items or are ready to get the right coverage in place to ensure you are protected against financial loss should your items be stolen or destroyed, give our friendly insurance brokers a call today at 1-800-463-8074. At Morison Insurance, we work for our customers—not for the insurance companies. Your best interests are our first priority, and you can count on our experienced brokers to search out the best options for your unique insurance requirements.