How much insurance do I need for my art and jewelry?

Do you have an art collection? How about some nice jewelry? Or family heirlooms that you've collected or inherited over the years. Make sure your "special limits of insurance" section covers these things!

This area of insurance is specialized and may need to be a separate clause on your policy. If you are unsure, please reach out to your insurance broker for details on your specific policy.

Watch the full video to learn more.

This video is part of an interview between Nathan Donohue and Sophie Riley. Look for our five short releases highlighting each section.

Transcript:

For households that have valuable art or jewelry or collectibles of some kind, you know, for my collection of monets that I have in my other room right here, how do I want to approach protecting my valuable belongings?

Great question. Well, I like to break it down for folks so they really kind of understand where the coverage is stemming from, what they want to transfer to an insurance company to ensure, because at the end of the day, we are looking at risk transfer, right?

I do have some clients that might have a large jewelry collection and they only want to insure 50 % of their collection. They're happy self-insuring 50%. That's fine. We want to think about your risk tolerance when we're looking at your valuable articles. And so, the first thing to mention is that on a homeowner's policy, you know how we mentioned there's dwelling replacement value, there's personal property, which is your contents.

Well, within a contract, on the personal property section, there is going to be an area that is usually called special limits of insurance, and that means that within the coverage for your contents, there might be a few areas that the coverage is limited. And to have full coverage, you need to add it separately, whether that be as an endorsement or a separate valuable articles policy.

And so, for example, your policy will say it has a million dollars of contents, of personal property on your policy. And its replacement costs new for old. There's a deductible that a claim is subject to. And within that million, it might say the most we'll pay for jewelry is $10,000 in a loss. The most we'll pay for firearms is 10,000. Same with silver or China collections.

And so there are certain items that have limited amounts of coverage. And then there's the deductible that applies. So, if you have a lot of times our clients will take a high-volume deductible and self-insure smaller losses. It also helps to keep the premium more competitive. And we're in a hard market, so we want to protect your insurability.

So, if someone has a $10,000 deductible on their home, and then their jewelry is limited to 10,000 on the contract, it's a wash. There's no point. So, what we do is we want to look at a collection. It's also known as a valuable articles policy. And the benefit of one of those policies is that not only will it provide full coverage for your items on a scheduled item, such as a, let's say an engagement ring that's insured for $50,000 on the contract.

It's going to be worldwide coverage with all of these premier insurance companies that we represent. It's going to be worldwide coverage, mysterious disappearance, you know, that's a very broad contract for all of these. Everything is covered except for a handful of excluded items. And when you schedule a piece of jewelry, that essentially means you're telling the insurance company exactly what it is.

We usually let them an appraisal. If we don't have an appraisal, a receipt is good to have. If we don't have that, we can do a description and a value. So, you know, we want to be as specific as we can. We put that on the policy. Let's say it's insured for $50,000, well, the contract will give you 150% appreciation for the market value.

And so, market value appreciation is a nice thing to have on jewelry because oftentimes, you know, the cost of gemstones and gold, different metals can increase. And so, if you're traveling and the diamond falls out, for example, and you file a claim and to replace that exact same ring would be more than 50,000, they're going to give you 150 % of what it was insured for.

If it's warranted. Sure. So, it's kind of nice to have that little buffer there. And that the other one is that it's zero deductible on a valuable articles policy. And the claims are typically settled very quickly. I had some clients who, you know, a Rolex was lost or stolen, and the insurance company has the check in the mail the next day. So, it's a policy that it's beneficial to have if you do have a lot of high value items that you want to protect, and jewelry being one of the most common.

And then, you know, fine art is an interesting one to discuss, some of our clients have extensive art collections. And one thing is always wise to have your high value items appraised to really understand what they're worth. And then when you are looking at coverage for fine art, the rate is much less expensive than jewelry because the chance of a loss is lower. I'm not taking my collection of monets on my cruise with me and accidentally dropping them into the ocean. But my watch or my ring, I could.

Jewelry has a higher rate to ensure than fine art with every insurance company that we represent.

That makes total sense. That makes total sense. I could see how this component of valuable belongings, art, jewelry, etc. could also be another piece that's fairly overlooked as well as you progress your life. Okay, maybe you get a couple of nice watches that you replace, upgrade an engagement ring. Next thing you know, you've got probably well in excess of, let's use your example before of $10,000 of jewelry that's covered on your homeowner's policy. You could have substantially more than that across all those different types of belongings.

Totally, and it's the way to protect your investments, right? We'll have quite a few clients that are investors in fine art or in high-end jewelry. And should there be a loss, it's important to financially protect yourself.

That makes total sense.