Insurance Insights

Protecting your Valuables – Understanding Sublimits and Personal Item Floaters

spotlight in a framed painting

Many of us assume that our homeowners policy will cover the loss of valuable personal property like jewelry, art, and electronics. In fact, all homeowners policies contain sublimits that reduce coverage for specific possessions. If you’re aware of these sublimits, you can decide whether to add a personal items floater to enhance your coverage.

In this post, we consider how a personal items floater (also called an inland marine schedule) can cover losses that a typical homeowners policy won’t. 

Sublimits Reduce the Amount of Coverage

In a typical homeowners policy, your personal property in your home, like your clothes, furniture, and other belongings (noted in Coverage C of the policy) is usually covered at 50 to 75 percent of the dwelling limit (which is noted in Coverage A). However, certain high-value, personal property usually has sublimits that can prevent you from obtaining the predetermined percentage of coverage. 

A sublimit is the cap a carrier will put on the amount they will reimburse you for a loss of a specific item during a covered peril.  (What’s considered a covered peril depends on your specific policy. Usually, if an event is not explicitly listed, then it’s not covered.) 

Here are some typical sublimits on homeowners insurance policies:

Computers: $1,500

Fine Art: $2,500

Firearms: $2,000

Furs: $1,500

Home-Theater Systems: $1,500

Gold and Silver Coins: $200

Jewelry: $1,000 to $5,000

Musical Instruments: $2,500

Stamps: $1,500

STOLEN! $5 Million Engagement Ring

Jewelry is a common personal effect of high value. Let’s use it as an example.

Basic homeowners policies usually have a jewelry sublimit of $1,000 or $5,000, minus your deductible, for each loss event. In the U.S., the average price of an engagement ring is around $6,000. In California, people spend the most, with the average price at a little over $9,000, according to Business Insider. If you’re an average Californian with a $1,000 deductible, and your ring was to accidentally slip down the kitchen sink, you might only get back $4,000. And that’s on a generous policy. 

diamond ring

But let’s go _really _big. Let’s say your engagement ring is more along the line of Beyonce’s, worth $5 million. Imagine, if you can bear to fathom it, that a thief steals your ring, along with other precious jewelry. Let’s say theft is a covered peril on your homeowners policy (which it usually is). And your policy covers 75 percent of personal property. Theoretically, you could get back $3,750.000. However, your policy has a $1,000 deductible and a $5,000 sublimit on jewelry. The most you’ll get for the entire loss of your jewelry collection is $4,000, not just your engagement ring—all of it. Four grand.

Get More Protection From a Personal Items Floater

Here’s a different outcome, one where you’re not stymied by sublimits. Had you moved your jewelry to a personal items floater, you could have been compensated for its entire value (i.e., made whole). With this type of policy, each valuable item is listed separately with its own coverage limits. Additionally, coverage can include more types of events. You can also have the carrier create a blanket policy, which covers the entire collection without itemizing each item’s worth. (This is good for something like a wine or stamp collection.)

On average, your annual premium for a jewelry floater will be 1 percent of the replacement cost. For a $10 thousand ring, it would cost about $100 a year to insure it. You might consider this a small price to pay for big peace of mind. 

**3 More Ways You Can Take Control **

Here are three easy steps you can take to get the most protection for your valuables:

1. Get an appraisal. 

If you own high-value items, whether it’s fine art, jewelry, vintage wines, or rare books, get an appraisal that proves the item’s value. Get your collection approved every five years, as the value can change over time. And stay in-the-know about the life of the artist should you have fine art, as many policies automatically increase the value of the artwork upon the artist’s death.

2. Take a picture.

Go around your home and take photos of your belongings. From your furniture and electronics to your jewelry and other private collections. This will help prove what items you owned in the event of a loss.

3. File your documents in the Newfront Dashboard.

The easiest way to keep track of your appraisals and photos of your valuables is by loading them onto the Newfront Dashboard. It’s an easy and efficient way to keep all your insurance paperwork in order and easily retrievable. 

antique coin collection

**Protecting Your Prized Possessions **

Many of us own valuable items that are symbols of our passions and testaments to the lives our families have lived. Or perhaps we consider our collections investments that entertain our aesthetic sensibilities. Whatever our reasons for collecting precious items, at Newfront, we’re honored to help protect the possessions that our clients hold dear. 

Susan Glenn
The Author
Susan Glenn
The information provided is of a general nature and an educational resource. It is not intended to provide advice or address the situation of any particular individual or entity. Any recipient shall be responsible for the use to which it puts this document. Newfront shall have no liability for the information provided. While care has been taken to produce this document, Newfront does not warrant, represent or guarantee the completeness, accuracy, adequacy, or fitness with respect to the information contained in this document. The information provided does not reflect new circumstances, or additional regulatory and legal changes. The issues addressed may have legal, financial, and health implications, and we recommend you speak to your legal, financial, and health advisors before acting on any of the information provided.