Own a Special Item? Insure it Separately

Posted: October 11, 2017

Ever had someone who’s worked in insurance look at one of your personal belongings and then say “you should have a rider on that” or “ask your insurance company about putting that on a floater?” What are they talking about? You already have coverage under your homeowner insurance that includes contents/personal property, right? So why would you need to insure any item differently? There’s good reason to consider this option.

What’s This Called?

Many in the insurance industry talk about riders or floaters, but the more appropriate phrase is Personal Articles Coverage (also referred to as Personal Articles Floater or PAF).  There are situations where it may be to your advantage to insure specific items under a scheduled PAF, and you should have this discussion with your professional insurance advisor when purchasing your residential insurance policy, as well as when you review your policy coverage, ideally at least annually because what you own and need to insured changes over time.

When to Consider

Depending on your insurance coverage and policy, special limits usually apply to certain types of personal property. Some of the most recognized limits include jewelry, stamp and coin collections, silverware, and other collectibles. If you have one or more items in any of these categories that exceed your policy's special limit, you should schedule those items on a PAF. When you do, your insurance company will list the item(s) separately and specifically on your policy, meaning that extra coverage has now been added over and above your normal limits for that type of item giving you additional protection. Expect that there will be an additional premium charge when you do this, but rates will vary depending on the category.

An extra benefit to listing your item(s) on a PAF is that most categories will have no deductible in the event of a claim. On the contrary, if you make a claim for special belongings under your normal contents/personal property coverage, this will be subject to your policy deductible, which could be $1000 or greater on a residential policy. Consider the deductible.

What’s the Cost Factor

In most cases, adding an item to a PAF under your policy is very affordable, as the rate is based on each $100 or $1000 of value for the item to be added. A recent bill of sale or an appraisal may be required to confirm the correct insurable value of your item. Overall, it’s not very expensive, especially considering the value of the items you’re insuring.

Contact a professional insurance advisor to review your residential policy at each renewal, and if you have a unique or expensive collection of items, be sure to ask about your coverage and policy limits. But in the end, be aware that while your insurer can make recommendations or suggestions based on the information you provide, ultimately it is up to you to ensure that you have the proper insurance protection. Spending the extra money on insuring special items is worth the cost.

My agent has given nothing less than the best at all times.

Carolyn, Policyholder