If your clothes, furniture and other personal items are destroyed by fire or other insured disaster, a standard homeowners insurance policy will replace them. The same is true if they’re stolen or damaged.
Expensive items are also covered, but only up to dollar limits set in the policy. To insure them for their full value, a personal property endorsement is needed. It’s a written agreement attached to your policy. Also called a floater, but more commonly called a rider, the extra insurance will insure the items for their officially appraised value.
Coverage for personal belongings makes up 50 to 70 percent of the insurance on the structure of a home, according to the Insurance Information Institute. To determine if you have enough coverage, the institute recommends conducting a home inventory through its free online tool to create a photo home inventory that can safely be stored in the cloud.
Here are some expensive items homeowners may need insurance riders for:
Collectibles and antiques
Baseball cards, stamps, comic books and other collectibles typically don’t have much protection in a standard homeowners insurance policy. Coverage can be limited to $2,000 or less, no matter how much you value your collection at.
Do you have antiques scattered around your home? Check their value and if they’re already covered by your home insurance policy.
To protect your valuables with an insurance rider, you’ll want to get them appraised. An official appraisal will tell your insurer how much they’re worth so the insurer can decide how much coverage to provide.
Expensive artwork is also worth buying extra insurance for, since a standard policy only provides coverage limits of up to $2,000 — the same as your autograph collection.
Fire is responsible for most insurance losses for artwork. The closer you live to a fire hydrant — usually within 1,000 feet — the cheaper the rider can be. Insurance for artwork valued at $5,000 would cost about $9 per year if you live close to a fire hydrant, and $16 annually if not, according to the Wall Street Journal.
Artwork and antiques usually appreciate in value over time, which is the opposite of what happens to many possessions. Many items covered in a home insurance policy are replaced at their actual cash value at the time of loss, which can mean their depreciated value. Check with your insurance agent on the policy wording so that the full and current value of the artwork is covered by a rider.
A wedding ring, diamond necklace or any other piece of expensive jewelry probably won’t be covered by a standard policy, with a typical limit of $1,000.
Riders can cost $1 to $2 for each $100 of appraised value, making a $5,000 ring, for example, costing $50 to $100 to insure annually, according to Calla Gold.
Insurers may differ on how they cover jewelry. Some may pay only the cash value of a ring, for example, while others may pay for a similar piece. If you want to replace an engagement ring of a particular style and grade of diamonds, you should make sure the insurer will help you find a similar ring.
Along with an appraisal, you may need to provide receipts and diamond certificates from a gemologist to prove how the diamond is graded.
Since couples often move after getting married, be sure to add an engagement ring and other expensive jewelry to the insurance policy for your new home after moving.
If you’re in a touring band or orchestra, your musical instrument may already be covered by a commercial insurance policy provided by your employer.
But if you somehow own an expensive musical instrument, such as a high-end electric guitar or a violin, then you may need a rider on your policy. Talk with your insurance agent to see if the value of your instrument would be covered under your homeowners, and if not, talk about your options for adding a rider.
Lowering the costs of riders
To negate some of the extra costs of riders, homeowners can add some safety precautions to their homes. Alarm systems, fire extinguishers and recording devices can make your home safer and make it eligible for discounts on home insurance riders.
Also be sure to keep copies of appraisals at home and at a friend’s or relative’s house in case yours is lost or destroyed in a fire. Your insurer will also want copies.
A high deductible on your homeowners insurance can lower the annual premium, but can make filing a claim more expensive if you don’t have the deductible amount set aside. Insurance riders typically have low deductibles and don’t require paying the higher overall deductible on your homeowners insurance.
If you do buy riders, be sure to update them if you add belongings. More artwork or adding to a stamp collection may warrant extra coverage. There’s no need to wait until the annual renewal of your policy. Update it as things change.