With Halloween still fresh in many people’s minds, I’m sure a few parents can remember their child’s face when, after getting all dressed up and braving the rainy weather, the lady that answered the customary “trick or treat” next door reached into a big bag of candy and deposited one butterscotch Werther’s into their child’s candy pail.  As much as I appreciate a Werther’s, it’s often disappointing to a child who, in this day and age, is expecting a fun size Snickers bar at a minimum.  This is how some people feel when they realize after a loss that every homeowner’s policy has limits for certain items, such as jewelry and firearms.  Getting paid $1,000 by the insurance company for a ring worth $5,000 can feel a lot like getting a Werther’s when you were expecting a Snickers (it’s actually much worse – but don’t try to explain that to a 5 year old).

With Black Friday deals and Christmas right around the corner, it’s important to understand how your homeowner’s policy covers two of the most popular gifts for Michiganders – jewelry and firearms.  In general, a standard homeowner’s policy covers these items for fire, explosion, vandalism, theft, and other perils listed in the policy.  However, it does not provide coverage for “OOPS!” actions such as dropping your firearm in the lake, losing earrings on the beach, or dropping a ring down the drain.  Additionally, in instances where the homeowner’s policy does cover the loss, there are policy provisions that limit the amount of coverage if the loss is by theft, which is the most common loss for jewelry and firearms.  The coverage limits for stolen jewelry and firearms are generally between $1,000 and $2,000 depending on the item and the insurance company.  On top of coverage limitations, the deductible on your homeowner’s policy applies before the insurance company pays any portion of the loss.

So is that lady sitting in first class rolling the dice with her three carat diamond ring?  Maybe… but probably not.  Jewelry and firearms can be specifically insured on a homeowner’s policy (referred to as “scheduled”) based on the value of the item.  This eliminates the homeowner’s policy limitation for how much the insurance company will pay for the item in the event of theft.  It also broadens coverage to include the “OOPS!” scenarios mentioned above.  Additionally, the homeowner’s policy deductible does not apply, so the insurance company pays for the full value of the item.

All that coverage must come at a cost, right?  Yes, but the coverage is actually quite affordable - especially when facing the risk of losing a $5,000 ring while skiing at Boyne or watching a $3,000 gun sink to the bottom of Higgins Lake.

So ladies, when making your Christmas list, go ahead and ask for that special piece of jewelry you’ve always wanted…just be sure to call us to add it to your homeowners policy.  And gentlemen, don’t forget that firearms can be specifically “scheduled” on your policy as well.

If you have any questions about this coverage or you make any substantial purchases over the holidays, please let us know.  Otherwise, enjoy the holidays and may you and your family stay safe, happy, and healthy.

This article was written by Derek Boer.  Please send comments or questions to derek.boer@boerinsurance.com.

Posted 6:21 PM  View Comments

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