If you have artworks, antiques and other collectibles, your collection might be worth more than you realize. Does it have proper coverage?
- Check policy limits. Your homeowners policy protects the contents of your home, in addition to the building itself. The typical policy limits “contents coverage” to somewhere between 50 and 70 percent of your overall limits. Therefore, a policy with $1 million in property limits would pay a maximum of $700,000 to cover your contents. In event of a total loss, this might not be enough to replace your building and contents, particularly if you have a lot of valuables.
- Check policy sublimits. Although most homeowners policies don’t have separate (lower) limits for artworks, many have lower limits for antiques. Policies also typically have lower sublimits for jewelry, guns, silverware, goldware and pewterware, as well as for other high-value collectibles.
- Check the type of coverage your homeowners policy provides. An “actual cash value” policy is cheaper but pays only what your property is worth at the time of loss –– your cost minus depreciation for age and wear. A “replacement cost value” policy costs more, but will pay to replace your lost or damaged goods with those of similar kind and quality.
- Know what your collection is worth. Unless you’re an expert yourself, the only way to know for sure is to get an appraisal. Appraisals for art or antiques can cost $250 or more for a single item; if you have many pieces, you might be able to negotiate a “bulk rate.”
- Consider additional coverage. A rider is a policy extension that provides additional coverage for an additional charge. A fine art rider or valuable items rider will cover those items only, so claims against the rider won’t count against your contents coverage. This can help if you have a serious homeowners loss; claims for a few damaged high-value items won’t deplete your limits. Valuable items riders cost very little — you can buy a lot of extra peace of mind for about 25 cents per $100 of coverage.
However, if you are a serious collector or have one or more very high-value items, you might need a separate fine arts or valuable items policy. These policies can provide more comprehensive coverage than your homeowners policy. For example, some provide “pair and set” coverage, which would reimburse you for the cost of the whole set if you break, lose or damage one of the pair or set. (You’ll have to give the remaining parts of the set to the insurer.) Some also provide appreciation protection, which will pay up to 150 percent of the insured value of an item to account for appreciation. Some insurers will also provide risk management services for items or collections of high value, looking at your pieces on site and giving you recommendations to protect them better.
- Determine whether you want blanket or itemized coverage. If no single item in your collection is worth more than about $2,500, then blanket coverage, which covers a whole class of items for a single limit, makes the most sense. If you have some high-value items, however, you will likely want to itemize them. An itemized policy will list each item to be covered and its value. At claim time, you will receive the listed value of your lost or damaged property.