Prized Collectibles are Often Underinsured
August 16, 2011Valued possessions are often inadequately insured by the contents’ coverage of homeowners’ or renters’ policies; even if it is a comprehensive plan. A key distinction with a collectibles’ policy is agreed value coverage.
With a standard homeowners’ policy, collections are insured for their actual cash value as determined by required appraisals. With collectibles’ coverage, collections are insured for their agreed value (full collector value) including accessories, without depreciation. Appraisals are not required with a collectibles’ policy.
The chart below demonstrates the distinctions between homeowners’ coverage and collectibles’ coverage.
|
Standard |
Collectibles |
|
|
Actual Cash Value |
Agreed Value |
|
| Pays Deductible |
$500 or More |
$100 per Occurrence |
| Insures Against: |
|
|
| Flood Risk |
No |
Yes |
| Hurricane Risk |
No |
Yes |
| Accidental Breakage |
No |
Yes |
| Covers Packaging |
Yes |
Yes |
| Sub-limits Restrict Coverage |
Yes |
Yes |
Collectibles’ coverage is more broad-based than a standard homeowners’ policy. Collectibles’ policies typically cover accidental breakage, flood, theft, hurricane, earthquake, water damage, and mysterious disappearance. They will also cover multiple collections in a home.
