Prized Collectibles are Often Underinsured

Posted on: August 16, 2011 by Larry Neilson

Valued 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.

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