Insure Your Valuables

NEW YORK – Buying insurance for your valuables — whether jewels or artwork or family heirlooms — can be tricky and costly. But there are few other options for safeguarding them, all of which come with caveats.

Don't count on your homeowner's policy, which typically caps payouts for valuable items, often at a mere $2,500 for jewelry and artwork or $1,000 for cash. It also restricts losses to what's listed in the policy, so if you misplace an earring or lose a stamp collection to flooding, it won't be covered.

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You can buy a floater, a free-standing policy for an item. Rates vary by company, state and item to be covered.

State Farm may charge less than 1% of the value per year to cover a $20,000 violin or a $10,000 necklace, depending on where and how they are stored, says Jan Weyhrich, a State Farm insurance executive.

Such personal item policies, as State Farm calls them, are common these days, with jewelry making up nearly three quarters of their business.

Christopher Lehman, a broker at the Brownstone Agency in New York — where rates are higher than other places and homes full of valuable objects relatively common — says insuring $10,000 worth of jewelry would cost around $255 a year, give or take. Fine art or silverware is not as expensive, but Lehman recommends adding such overage only for items worth more than $2,500 to $5,000.

In addition, with floater policies you'll have to submit a bill of sale or get an up-to-date appraisal and your insurer may cap the coverage on a particular item. But floaters generally cover all types of loss, so you can wear that engagement ring out to dinner without fear. And by valuing the items appropriately you can insure priceless heirlooms for which replacement cost coverage is impossible.

You can also earn discounts for installing an alarm system or home safe or by storing your valuables in a safe-deposit box.

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