A typical homeowners insurance policy limits the coverage of your most prized possessions. Learn how to fully protect your valuables with insurance riders or floaters.
Your homeowner’s policy covers a lot of things. Most coverage includes:
For many, the coverage for personal belongings is more than adequate. Many policies grant between 50 and 70 percent of the home’s insured amount.
For example, if coverage is $200,000 for your home’s structure, then $100,000 to $140,000 will be offered for the loss of your personal items. How do you know this will be enough?
We recommend making a personal item inventory. See our "Create an Inventory of Your Possessions for Homeowners Insurance Claims" article
Fifty to 70 percent of your home’s coverage seems like enough. However, most policies place limits on amounts for expensive items. It’s important to read the fine print, shop around, and compare quotes for homeowners insurance riders. Especially if you have several high end items in your home.
Jewelry is a great example as it's valuable and easily stolen. Most basic or standard policies provide up to $1,500 for stolen jewelry.
So, if your jewelry is worth more than that, consider adding a rider to your policy. Otherwise, you’ll be paying the difference to replace what’s lost.
Riders, also known as floaters or endorsements, act like mini-insurance policies. They boost coverage to your existing homeowner’s policy. This increase in coverage ensures valuables will be replaced at their appraised value.
Additionally, riders expand coverage for accidental or mysterious disappearance. That’s not usually included in a standard homeowner’s policy. And deductibles aren’t typically attached to this extra form of coverage.
Once again, read the fine print and get a homeowners insurance quote to compare the cost of home insurance riders.
Which pieces of "personal property" should be covered by a rider? Here are a few examples:
Riders usually provide better coverage for artwork and antiques than they do for other items like jewelry. If the art you own is expensive, consider a rider. This helps ensure full coverage.
Riders for coins may also include bank notes, bullion, gold, silver and other metals. Most home insurance policies cap their coverage at $200 for these items.
That seems like a low amount for items that have been destroyed or stolen from this list of goods. Insuring these items for their full value makes sense if you wish to replace them.
Got a gun collection? Consider protecting those assets with a rider. The usual coverage limit (on a basic homeowner’s policy) for these items is around $2,000.
Even though home offices are common, coverage for them has lagged behind. Most policies will cap coverage at $1,000 for home office related items.
Will that be enough to replace all your hardware and software? If not, they’re another candidate for supplemental coverage.
Like artwork and antiques, your average home insurance policy will provide you with quite a lot of coverage when it comes to any Oriental rugs you may own. In fact, some policies pay up $5,000 per rug, or $10,000 for all of the rugs in your home. Of course, if your rugs are worth more than the limits stated in your policy—and if you'd like to be reimbursed for their full worth should they be destroyed or stolen—you might want to boost your coverage using a floater, endorsement, or rider.
Most people don’t think about replacement costs for legal or otherwise valuable documents. How much to replace passports, deeds, securities, photos, digital media, etc.?
A rider may be worth it. Homeowner’s policies typically cover up to $1,000 for these types of items. Passports alone could cost that much, depending on how many people are in your family.
The following items, depending on their replacement costs, are commonly covered by homeowner’s insurance riders:
The kind of supplementary coverage discussed here doesn’t come free. Riders typically add between 1 and 20 percent to your premiums.
It depends on the type of supplemental coverage purchased, the value of items covered and your claim history.
Aside from the increased cost, your prized possessions probably won't be protected from every possible disaster. For example, it's unlikely a rider will protect items from intentional acts of destruction, or natural deterioration.
Finally, don't forget to update your personal inventory when new items are purchased or items sold. Most experts recommend having appraisals done every two to three years in case values have increased or decreased.
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