Saturday, December 8, 2012

Do You Truly Need Extra Coverage for Your Valuable Possessions?


Do you really need to get extra home property insurance coverage for your special piece in your house? Will not your standard homeowners policy cover it? The fact is that your basic policy usually gives coverage for such things only if your loss is a result of perils that are included in the policy primarily.This makes it very important for you to preview carefully exclusions part of your policy.

But even if you are covered for this kind of items within the limitations of the perils included in your policy, there are usually low caps on compensation for some of such items. Your insurance provider won't pay a dime more than the exact amount stated in your policy (And the standard insurance coverage sum is often low).

For example, if you register the stealing of one piece of jewellery, your standard policy probably won't pay back anything more than $1,500 irrespective of how much more it's value. When you look at this you will agree with me it is grossly inappropriate for somebody who has an item that is worth $50k.

Undoubtedly, you'll not be happy to get $1,500 in such a case. Accordingly, you will need extra coverage. You could have two alternatives for increasing insurance coverage to something more acceptable for your situation...

You could raise the limit of liability on your basic policy or you can buy floater policies for a given item or items. If you need the cheaper option, then you can go for raising the limit of the liability.

Just keep in mind that your limit should be at least 150% more than your most valuable piece. Here's why that is prescribed: When you raise the limit of liability to $20k then you will probably only be able to claim a maximum of about $8k on any single object.

You will need to talk about this in details with your insurance agent so that you can select the right limit for your situation. Don't also forget that in this situation, losses covered up will be limited to perils that are covered by your policy.

This other option might be a lot more high-priced but it simply makes more sense for people who own very valuable pieces. That is just because it gives you much more protection and is not restricted to risks in your normal policy. In fact, it covers any kind of loss (including accidentally flushing it (say, a ring) down the drain).

This particular alternative is scheduling each item by buying floater policies. These have more complicated requirements, though. The item to be covered should be estimated by a professional first. This will likely cost money but it will be money spent well.

But having said all, don't fail to request information from your adviser. Buying household insurance can be difficult since everybody has their peculiarities once it comes to our possessions. You need to be sure you are satisfactory insured.

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