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October 4, 2016

Will your valuable gift be properly protected?

When you purchase a new collectible item or receive a valuable gift,  you may wonder if the item will be automatically covered on your insurance policy.

With high-end gifts and purchases such as jewelry, watches, antiques, fine art, and other collectibles, it is important to ensure they are properly protected. Even the most comprehensive homeowners policy is limited in its protection of valuable articles and collections. If you rely solely on your homeowners policy for coverage, you may find you don’t have enough insurance to replace the gift if it is lost, stolen, or damaged in the future. These items are best protected through separate policies specifically for valuables. Consider discussing the following insurance considerations in further detail with a trusted personal risk advisor.

Newly acquired items

Whether as gifts or purchases, informing your insurer may not be the first thing on your mind as you continue to acquire new items. Suitable valuables coverage provides an automatic window of protection, within stated policy limits, for up to 90 days after acquisition — even if you haven’t informed your insurer of the new item. When purchasing a big-ticket item such as a yacht, aircraft, or collector vehicle, it’s also important to involve your personal risk advisor during your research phase as there may be insurance considerations to address.

Actual cash value versus replacement value

Standard policies may limit any claims settlement on a valuable article to its so-called “actual cash value,” based on the original purchase price less depreciation. The actual cash value may bear little relation to the real cost to restore or replace the item since it does not take into account rarity or the cost of expert restoration services.

Broader loss coverage

Standard coverage addresses only losses caused by a defined list of perils, such as theft or fire. But if your antique vase breaks, a diamond is lost from your grandmother’s brooch, or your grandfather’s gold pocket watch disappears, your loss is unlikely to be covered. Specialized valuables insurance typically covers these all-too-common scenarios.

For jewelry, collectibles, and gifts, as much as any passion investment, it’s important to work with a personal risk advisor with expertise in the complexities of protecting valuable property and assets. To gain more specific insight on jewelry and watches; collectibles such as wine, coins, silver, or instruments; fine art; luxury collectibles such as yachts, aircraft, or collector vehicles; as well as information on appraisals, documentation, transit, and storage, see our white paper on Protecting Passion Investments: Trends, Insurance Implications, and Risk Management Best Practices.