Insuring those pricey possessions

By Insure.com

If you own items that you think would catch the eye of appraisers on "Antiques Roadshow," make sure you've got the proper insurance to protect your investment.

Insurance for especially valuable items -- musical instruments, furs, jewelry, antiques, collectibles, wine and fine art -- is not just a good idea, it's a necessity. That's because a regular home-insurance policy, which covers your personal property, has limits on how much it will pay for certain kinds of pricey items.

If you want to make sure that your valuables are covered, you'll need to make special mention of them when you buy your home insurance. You'll probably have to take out a separate rider for items like the ones we're talking about here. That might mean you'll pay a bit more for your policy. But it also means you won't be as sorry if anything happens to your treasures.

In general, if you have any one item or a collection of items that is worth more than $2,500, you should mention it to your insurance agent when you buy the policy. The threshold of value will differ from company to company and from policy to policy.

Know what you're buying

In some cases, it makes more sense to buy a policy that's been especially designed for people with a taste for expensive goods. The Chubb Group, for example, offers homeowners insurance with more jewelry coverage than most. To secure the broadest coverage available, you can purchase valuable-articles coverage and have your jewelry "scheduled," with each piece described and individually valued.

Chubb's valuable-articles coverage is "all-risk" and covers most causes of loss. With this agreed-value approach, you get the scheduled amount, with no deductible or depreciation, in the event of a total covered loss.

If you have a collection of fine items of less-substantial value, it might make sense to buy blanket coverage for them. Categories for blanket coverage vary, but they generally include jewelry, fine art, silverware, cameras, musical instruments, furs, wine, stamps, coins and collectibles. Provided that no one piece of your collection is worth more than $2,500, blanket coverage may be the way to go.

Chubb gives its customers the choice of listing especially valuable items separately or lumping together possessions that fall into a single category, such as jewelry or a wine collection.

If you want to insure something valued at more than $50,000, you'll have to hire an appraiser to document its value.

Listing valuables separately effectively will settle the loss before it occurs: If the insurance company has documentation proving that your antique armoire was worth $55,000 and the armoire burns in a fire, your dollar figure is already set, and you'll avoid haggling with claims adjusters.

If you want to list items separately that fall below the $50,000 threshold, then it's simply a matter of describing them and estimating their worth.

Some insurers might not require a bill of sale to document the value of items worth less than $50,000, but other insurers may have more stringent requirements.

When won't it pay?

Regardless of how you decide to insure your treasures, make sure you know about any cases in which the policy will not pay out. In general, policies and riders for fine valuables give fairly broad coverage, including losses resulting from just about any peril you can think of, except nuclear explosion, war or intentional acts of destruction. One caveat: Most policies of this type will not cover musical instruments or cameras used for profit -- similar to the common exclusion of laptop computers used for business purposes.

Also, most regular home-insurance policies will not pay to replace what some insurance companies call "items of antiquity." In some cases, that means anything more than 25 years old, but the definition varies depending on your company. That's another reason to take out a special rider on any antiques you own.

Updated May 25, 2007