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How to Insure High Value Items

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I will formally go on the record and state that everyone needs homeowner’s insurance or renter’s insurance to cover the value of the items they own. Hopefully, you have taken the steps to acquire one of these policies. If not, do so now. These policies are relatively inexpensive, and it doesn’t take much to lose everything you own (fire, flood, theft, natural disaster, etc.). When you are buying one of these policies, it’s important to understand your coverage. You may be surprised to discover there are certain exclusions to the policy, including exclusions for certain damage (common for flood and wind damage), and sometimes exclusions for certain items you own. These are usually limited to high value items such as jewelry, artwork, memorabilia and collectibles, musical instruments, computers, etc. When going over your policy, make a list of the exclusions that apply to you, and see if you can buy a rider on your homeowner’s or renter’s insurance policy so you can cover these items. It’s usually a good idea to do this as it only costs a few dollars per year and can save you literally thousands of dollars if the worst happens.

Determine Your Coverage Needs

Insure high value items, like a Martin Acoustic Guitar DC-16GTE

You should insure your high value items.

There are a couple ways you can make sure you have enough insurance for your belongings. Most insurance companies come up with an “average coverage amount” based on your location, cost of your home, number of rooms in your home, and other factors. For example, an insurance company may cover the value of your home for $150,000 and the value of your belongings for $100,000. The latter number is an estimate based on size of home, number of rooms, location, etc. If your house and the contents were to be completely written off (think natural disaster or fire), then your insurance company would reimburse you for the amount of your home, plus the belongings—minus your deductible, of course. This is the easy way to make sure you have enough coverage. If the total value of your belongings falls within the window set by the insurance company, then you are covered. But you will be surprised at how often you may not have enough coverage. If you need more coverage than your insurance company offers, then ask how much it would cost to increase your coverage. It is generally very affordable to raise your coverage levels. When reading through your policy, also double-check to see which high value items are covered, and which are not. In addition, make sure your policy covers your items for full replacement value, and not the item’s current value.

Document Your Belongings

Even though you may have enough coverage, you still need a record of your belongings. The best way to do this is create a list. There are two ways to do this: the short way, and the long way. The short way is grabbing a video camera and doing a walk through in your home, documenting your belongings as you go. If you want a more complete inventory of your high dollar items, then grab a pen and pencil or open a spreadsheet on your computer and copy down the make, model, serial number, purchase price, and estimated value of the items. You can also take a video or snapshot of the item to back up your information. The long way to document everything you own involves making a complete home inventory. We have instructions for a home inventory here. Documenting your belongings seems like a daunting task, and it can be. Try to do it a room at a time, or at least document your high dollar items, and go through the rest of your house later. A great way to document your items for insurance (either a full inventory or just your expensive items) is with Know Your Stuff, a free service from the Insurance Information Institute. They have a free software program (Mac, Windows, iPhone, Android) that will walk you room by room through your home so you can document everything you own, including adding images, serial numbers, etc. You can also upload everything to their secure servers and access it from any computer (good to know in case yours was stolen). Important: make sure you have an accessible copy of this information off-site. You can do this by leaving a copy with a family member, storing it in a safety deposit box, or uploading a copy to an online backup system such as DropBox, Mozy, Carbonite, your email, Google Docs, etc. Know Your Stuff also keeps your info in the cloud, so it can be accessed anywhere.

Add an Insurance Rider for Your Expensive Items

“Expensive” is a broad term, and varies from person to person and company to company. The only way you will know what your insurance company covers is by reading through your insurance policy. Once you have a good idea of which items are covered, then you will have a good idea of which items will need a separate insurance rider. For example, when my wife and I got married, we added an insurance rider to our homeowner’s insurance policy to cover my wife’s engagement ring. The coverage is relatively inexpensive, and we are covered for the appraised value if anything happens to it (loss, theft, damage, etc.). I also have my computers covered under this policy, just in case something happens to them (this is super important to me, as I use my computers for a living). It is a good idea to insure high value items, including other jewelry, musical instruments, artwork, memorabilia and collectibles, and similar high value items. You should include documentation for these items to prove ownership and help establish value. This can include:

  • Receipts or proof of purchase
  • Appraisals
  • Photographs
  • Serial numbers
  • other information that proves value and ownership

Why You Need This Information

Homeowner’s and Renter’s Insurance covers many items, including theft, damage, etc. But it’s up to the insured person to establish ownership of the items in question before the insurance company will cover the item. In the event of a total loss, the insurance company will have baselines to establish the value of the items you may have lost (assuming you have no proof of the contents of your home). These vary from company to company, but often work on a basis of the size and value of your home, your neighborhood, income, and other factors. However, many insurance policies won’t cover high value items based on these assumptions. You need to prove ownership, and often need to pay an additional insurance rider on your high-dollar items to ensure they are covered. Do you have more tips for insuring your high value possessions?


Published or updated February 26, 2014.
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{ 8 comments… read them below or add one }

1 Snarkfinance

“But it’s up to the insured person to establish ownership of the items in question before the insurance company will cover the item.” That is the best statement I have read all morning. Nobody does this, really. Great post.

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2 Ryan Guina

Agreed. Most insurance companies will give you a reasonable valuation for clothing and home furnishings, based on customer averages or other standards. But unless you have some kind of proof, they normally won’t cover items outside their normal ranges, or the value of high dollar items. Some expensive items also require a specific rider for coverage, even if you have proof of ownership. It’s essential to read your policy thoroughly!

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3 Derek @ MoneyAhoy.com

The video idea is a good one to cover most of the highlights around those expensive items. You just need to keep a tape/backup of it off-site incase of fire.

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4 Roger @ The Chicago Financial Planner

Great post Ryan. We’ve always had homeowners insurance, but we made sure that our oldest got renter’s insurance when she moved into a “real” apartment in LA after graduation. Our younger daughter is off to law school in a couple of weeks and the apartment complex where she will be living has made it a requirement that she and her roommate have renter’s insurance. This is essential and generally inexpensive coverage to get.

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5 Ryan Guina

Renter’s insurance is highly recommended for all renters. Many people don’t get it, either because they don’t think about it, or because they assume it will be expensive (it’s not). Glad to hear your daughter is covered.

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6 Derek | MoneyAhoy.com

Also, make sure you are properly insured for your house. I just recently found out that we were under-insured by >$150k on our house! We would have been completely screwed if a major event happened to us as the cost to rebuild is way more than the market price right now for most folks.

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7 Ryan Guina

Excellent point, Derek. Many people insure their homes for the purchase price, or appraised value. But they should insure the home for the cost to rebuild it, and they should insure their belongings at the replacement value instead of actual value, since most items people own depreciate (clothing, furniture, electronics, etc.).

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8 Bryce

I’ve done the video walk through, one video file per room. I have taken still pictures of many items, as well. I think the most expensive items to replace are furniture and some personal items, like my wife’s jewelry. These are in video and still picture archives stored on the cloud. Of course, there are irreplaceable items, like photo albums, that are now also all stored on the cloud.

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