You’re a diligent and responsible homeowner or renter, always ensuring your insurance policy is current and your payments are made on time. However, did you know that some of your possessions might have limitations to their coverage?
Let’s test your insurance knowledge. Which of the following situations is 100% covered by a standard insurance policy?
A. Several items from an inherited set of Tiffany silverware have gone missing after a party.
B. You forget your Rolex® in a hotel room.
C. A hot water heater bursts and floods the basement, destroying a 1986-1987 Fleer Michael Jordan Rookie Card.
D. None of the above.
The correct answer is “D” But why?
Homeowners insurance is designed to help protect against unanticipated losses caused by fires, thefts and other disasters, however, it doesn’t cover accidental losses like mysterious disappearances (“b”). Additionally, expensive things that are easily stolen (“a”) or valuable, and difficult to replace items (“c”) may be subject to sub-limits, which is the maximum amount an insurer will pay as specified by the policy.
To avoid falling victim to insufficient coverage, Mercury Insurance recommends taking the following three steps:
- Create and maintain an inventory. First and foremost, always keep an up-to-date inventory of your possessions. Be sure to take photos, provide descriptions, what you paid, and include the purchase date, serial numbers and copies of receipts when possible. The initial process of building an inventory may be tedious, but the end result will prove invaluable in the unfortunate event of an unexpected loss. Several apps exist that make getting started a little easier, with an added benefit of allowing you to access your information from more than one location. And remember to add new purchases, such as anything Santa left under your Christmas tree, or Hanukkah, birthday and wedding gifts to ensure you have an accurate record of what you own.
- Get appraisals. An appraiser will help you determine the value of your hard to replace items. He or she will provide you with a written report, which includes the full description of the item and the procedure used to estimate the item’s current value. Pricing will vary by state and the appraiser’s area of expertise. American Society of Appraisers, Appraisers Association of America and International Society of Appraisers are great resources to find an appraiser who meets your requirements.
- Consult with your agent. Most insurers offer additional personal property insurance to cover expensive and/or irreplaceable belongings. First, confirm with your agent that you don’t need additional items appraised and double-check that your inventory has all of the information that would be required if you needed to file a claim. Then discuss how to amend your policy, if needed. One advantage of being a Mercury customer is you’ll have a local, dedicated agent to answer your questions and help customize your policy. Your agent may recommend raising your limit of liability or purchasing a “floater” policy, which covers losses of any type, including accidental.
Additional items that may not be fully covered by a standard policy include fine art, rare stamps or coins, wine collections, antiques, expensive jewelry and collectibles. Speak with your local agent to learn more.