Protecting your collections

A woman recently filed a claim after her coin collection was stolen with little chance of recovery. This type of loss is very unfortunate. Oftentimes, an insured could have inadequate insurance coverage if they haven't taken the necessary steps to inform their insurance company of their collection.

In the case of the stolen coins, the maximum recover limit would be $200. The reason for this is that the typical insurance policy places limits on certain types of property. In your homeowners policy there is a section titled: Special Limits On Certain Property. While the dollar limits will vary, to a limited extend, from policy to policy, there are some commonalities as it pertains to the loss of a coin collection. In this case, the policy would limit recovery to only $200 after the application of the policy deductible. In many cases this amount of recovery would barely scratch the surface of the actual loss.

Why do insurance policies contain such provisions? The answer is quite simple. While different companies' policy language and limits will vary slightly, the insurance policy is written to provide coverage for the average policyholder. Most of us do not own collections or keep large amounts of cash at our homes, and we probably would not want to pay a premium that would provide open-ended coverage for such unique items of property. While the policy provides some limited coverage for special types of property, it in no way serves the needs of the unique insurance consumer.

However, for the collector or owner of unusual property items, there is a solution. It is possible to amend your homeowner policy, by endorsement, to provide special coverage for unique items like collections of coins, stamps or a number of other limited property types you will find in your policy. By asking your agent to include a scheduled property floater in your coverage, you can specifically insure items of special interest. There are varying charges for different kinds of property.

One very large advantage to insuring unique and unusual items in this manner is that the special property floater usually provides coverage for a much broader list of perils than those provided by your contents coverage in your homeowner policy. In fact, usually, unless there is a specific exclusion contained in the policy, the peril causing the loss will be covered. This adds special emphasis to insuring items that, while there is no specific limit in the policy, may be subject to loss from perils that the personal property section of your policy does not provide. An example might be your Hummel or Precious Moments statuary. These items of fine art are especially susceptible to breakage, yet the named perils in the personal property section of your policy provides no coverage for simply dropping and breaking your piece of fine statuary unless you chose to specifically endorse these items to your policy.

Some other items with special limitations include jewelry, precious and semi-precious stones, furs, guns, silverware and goldware. While this is an incomplete list, it demonstrates why certain items, because of their uniqueness, are limited separately in the policy. The modern homeowner insurance policy is written in easy-to-read language that the average person can review. If you are not sure after your personal review of your policy coverage, contact your insurance agent for further investigation.