Category: Personal

From glittering bracelets and watches to sparkling rings and necklaces, jewelry can be found in almost every home. Unfortunately, these trinkets and charms are not always properly protected. If you own expensive or extremely valuable jewelry, it’s important to make sure you have the appropriate insurance.

Understanding the “sublimit”

You may assume your valuable jewelry is fully covered by your homeowner’s insurance. While most policies do cover jewelry, the payout is oftentimes much lower than the actual value of your bling.

Why wouldn’t your insurance pay the full value of your jewelry if it’s stolen from your home? It all comes down to what’s called the “sublimit”—this is the limit on the amount the insurance company will pay for specific types of personal property. Although your policy’s total personal property limit may be $75,000, the sublimit for jewelry may be as low as $1,500.

Read the fine print in your contract and find your policy’s sublimit for jewelry. If your jewels are worth more than the sublimit, you may want to purchase additional insurance.

Five steps to jewelry protection

If you decide to purchase additional insurance to fully protect your jewelry, follow these five simple steps:

1. Get it appraised: If your jewelry has not been appraised within the last three years, take it to a jeweler for an appraisal. Be sure to choose a trustworthy jeweler who is a graduate of the Gemological Institute of America (GIA). (Most insurance companies require that higher-end jewelry is appraised by a graduate of the GIA.) Look for the designations G.G., G.J. or A.J.P. at the end of the jeweler’s name to ensure they are well-educated and reputable.
2. Look for the four C’s: If you are getting a diamond appraised, the appraisal should include a description of the four C’s: carat, cut, clarity and color. These four details allow the jeweler to make an accurate appraisal, which will be very important should you ever need to file a claim with your insurer.
3. Consider inland marine coverage: You can either purchase this type of insurance coverage as a separate policy or you can have it added onto your homeowner’s policy as supplemental jewelry coverage. Inland marine coverage offers much more coverage for jewelry than just your homeowner’s policy alone.
4. Keep jewelry locked away: Be sure to keep your valuable jewelry protected in a lock box at home. If you own jewelry that you rarely wear (such as family heirlooms), you may consider locking it up in a safety deposit box.
5. Review coverage regularly: Look over your jewelry coverage at least once every two years to make sure it is up to date. Also, if you sell any jewelry or purchase new high-value pieces, it’s important to update your policy as soon as possible.

Whether your jewelry box is spilling over with brand new jewels or you own one or two family heirlooms that are absolutely irreplaceable, it’s important to protect these valuables. To learn more about jewelry coverage options, talk with your  insurance agent.

Once upon a time, large desktop computers were the golden standard of computing and portable devices were the exception. Today, almost the complete reverse is true. Laptop computers have grown more powerful and less expensive. Where college students considered typewriters to be mandatory equipment a generation ago, most today would not dream of attending college without a laptop. Businesspeople employ a variety of devices, including laptops, PDAs, Blackberries, and smart phones. Electronic book readers, led by the success of the Amazon Kindle, are becoming more popular. These devices are convenient, easy to carry, easy to use for information, entertainment, and communication, and very trendy. They are, however, also very susceptible to theft or damage, and their replacement costs can be substantial.

Any machine that runs on computer circuitry is vulnerable to certain perils. Most people who have owned such devices are familiar with the instinctually sick feeling they get when they accidentally drop one of these devices. Circuit boards are delicate components, subject to cracking if handled roughly. Moisture is also no friend to computerized gadgets. Drop one in water or spill a drink on it, and you will find yourself shopping for a replacement. Power surges, which can happen when electricity recycles after an outage, can instantly ruin a computer or electronic device. What’s more, popular electronic devices are perpetual targets for thieves.

When something happens to your laptop, will your homeowner’s insurance help pay for a new one? If you have a standard policy form, maybe not. The standard policy covers personal property of all types for a specific list of causes of loss. The list includes things like fire, lightning, explosion, windstorm and theft, but it does not list the other common causes of loss to computers. If someone steals a laptop from a dorm room, the policy will provide coverage. If the student drops it and cracks the screen, however, there is no coverage. However, additional coverage is available for purchase to protect against these common but disastrous events.

Anyone who owns computer devices should consider buying special computer coverage. This policy reverses common coverage for computers. Rather than listing those causes of loss the policy covers, it lists those that it does not cover. If a cause of loss is not on the list, the policy provides coverage. This expanded coverage applies to computer hardware, software, operating systems or networks, and other parts, equipment or systems designed solely for use with them. For example, in addition to covering laptop and desktop computers, it covers printers, scanners, modems, wireless routers, and similar devices.

The coverage does not pay for losses caused by things like temperature extremes, humidity, wear and tear, mechanical breakdown, corrosion, damage caused by household pets, and others. However, the four common causes of loss to computers (breakage from dropping, damage from spilled liquids, power surges, and theft) are not on the list. Therefore, the coverage pays for damage caused by all of these. For example, the policy will pay for repair or replacement of a scanner that someone steps on, but it will not pay for repairs to a laptop that simply fails to turn on one day.

Because computer equipment is so common now in households, homeowners and renters should discuss their coverage with an insurance agent. For a relatively small cost, homeowners, renters, and students can insure their increasingly important but delicate belongings against thefts and those accidents most likely to damage them.

Men and women alike often own expensive pieces of jewelry, such as diamond rings, designer wristwatches, bracelets, and necklaces. Not only are these pieces attractive to thieves, they are subject to several other perils as well. Because of the sentimental and monetary values associated with jewelry, proper insurance coverage is of great importance.

A standard homeowner’s insurance policy will pay for jewelry damaged by fire, smoke, vandalism, windstorm, and several other causes. Coverage is also available for stolen jewelry, but only for a maximum of $1,500 or $2,500. This limit applies collectively to all items of jewelry, furs and gemstones stolen at the same time; it does not apply separately to each item. It will not pay for pieces that are lost or that mysteriously disappear. In the event of a loss, the insurer will pay only the cost of replacing the item less depreciation.

Because of these limitations, people who own valuable pieces of jewelry should consider purchasing separate coverage, either as an add-on to their homeowner’s policy or as an individual policy. With this coverage, the policy lists specific items and the amounts of insurance on each. If the policyholder buys a new item during the policy period, the policy covers it automatically for 25 percent of the policy’s limit or $10,000, whichever is less. The automatic insurance ceases after 30 days; the owner must report the piece to the insurer to maintain coverage.

The policy covers items of jewelry but does not include unmounted gems; gold, silver and other precious metals; and silverware, flatware or goldware. The owner may be able to insure some of these items separately. The insurance will pay for loss from all causes other than war, nuclear disaster, actions of the government, and maintenance of the property. The owner must choose one of two options for determining the property’s value in the event of a loss. The first is the same as in the homeowner’s policy – actual cash value, which means the insurer will pay the least of:

• The item’s replacement cost minus depreciation;
• The cost of repairing it;
• The cost of replacing it; or
• The amount of insurance shown on the policy for the item.

The second is called “agreed value,” which means that the insurer will pay the full amount of insurance shown on the policy for the item if it’s lost or damaged. This option may cost more but provides more certainty for the owner.

Jewelry owners may also select optional coverages. One option gives the owner a premium credit for items stored in a bank vault. If the owner wants coverage to apply outside the bank vault, she must notify the insurer in advance and pay an additional premium. Another option gives a future spouse, whom the policy would not ordinarily cover, insurance for his or her interest in engagement or wedding rings. Under the third option, the insurer will pay the value of a complete set of items, such as a pair of earrings, even if the loss affected only one item in the set. The owner must surrender the surviving items in the set to the insurer.

Owners of expensive jewelry should consider having it appraised by a reputable jeweler at least every three years. They should also take common sense steps to safeguard it against theft, the most common cause of loss for jewelry. Finally, they should meet with their insurance agent for a coverage review every couple of years to ensure their insurance is adequately protecting them from loss to their valuables.

Many people collect paintings, sculptures, antiques, and other works of art with values ranging from garage sale prices to thousands of dollars. The International Risk Management Institute states that art becomes valuable for one of three reasons: cultural significance; owner’s subjective value; or the marketplace’s estimate of its worth. Regardless of the reason, damage to a valuable work of art will likely cause the owner significant financial loss.

A standard homeowner’s insurance policy provides some coverage for fine art, but is unsuitable for high-priced works. The insurance company will pay for losses to art caused by fire, water damage, vandalism, theft, and a limited number of other causes. In the event of a loss, the company will pay the item’s replacement cost after subtracting depreciation. For example, if fire destroyed a painting worth $1,000 on the open market, the homeowner’s policy would pay the cost of replacing the canvas, paint and frame after subtracting some amount to reflect the age of those materials. This amount may be nowhere close to the work’s market value.

For this reason, art owners may want to buy separate insurance on their fine arts. This insurance can be in the form of an addition (also called an endorsement) to the homeowner’s policy, or via a separate policy (sometimes called a “fine arts floater”). A fine arts floater insures paintings and drawings; art glass windows; valuable rugs, statues, furniture, and books; and “other bona fide works of rarity, historical value or artistic merit.” These items must be in a private collection owned by the policyholder; there is no coverage for works owned by a museum, business or government agency. The policy lists high-value art works individually on the policy with their associated coverage amounts and shows a combined insurance limit for all lower-value pieces. If the policyholder buys a new piece during the policy period, the policy provides automatic coverage for 90 days. The most it will pay for a new piece (until the owner reports it to the company) is 25 percent of the amount of insurance covering items specifically listed on the policy.

If the owner plans to transport an artwork from the address shown on the policy, coverage will apply only if competent packers handle the move. Coverage does not apply to a piece while it is in the custody of an art dealer, museum or auction house if the entity has insurance covering it. Also, the policy will not pay for damage to pieces while they’re on exhibition off the owner’s premises; the owner can extend coverage off-premises by adding the address of the exhibition to the policy.

The policy covers damage to fine arts from all causes except:

• Actions of governmental or civil authorities;
• Intentional damage;
• Neglect;
• Repair, restoration, or retouching processes; and
• Breakage of glass, statues, and other fragile articles unless fire, explosion, collision, windstorm, earthquake, flood, malicious mischief, or theft caused the loss. For an additional premium, the company may remove this limitation.

In the event of a loss, the company will pay the amount shown on the policy for items specifically listed on the policy. For other pieces, it will pay amounts equal to their replacement cost minus depreciation, up to a maximum of $500 per item.

To accurately determine an item’s value, the insurance company may require an expert appraisal. It may also require the policyholder to take certain precautions to safeguard especially valuable pieces. A qualified insurance agent can give advice on appropriate coverage and companies. Anyone who owns these treasures should make certain the right insurance is in place.

Rushing to make it to work on time, Bill sees the traffic light up ahead turn yellow. He speeds up to make it through the intersection, but the light changes to red before he makes it to the other side. When he doesn’t see any flashing blue lights tailing him, Bill breathes a sigh of relief assuming he didn’t get caught—or so he thought.

A week later, Bill is shocked to receive a ticket for $150 in the mail. As he dashed through the red light a week before, a small camera at the traffic light snapped a picture of his car and license plate number. The Department of Transportation then tracked down Bill as the registered owner of the car and mailed the ticket to his home address.

Say cheese!

As more cities install red light and speeding cameras, tickets by mail (like the one Bill received) are becoming increasingly common. Obviously, drivers are never thrilled to receive a speeding or traffic violation ticket for $100 or more in the mail. Some argue the cameras are an invasion of their privacy while others complain that local police departments are just looking for a quick and easy way to boost their budgets.

Despite these protests, traffic violation cameras aren’t going away any time soon. Such cameras are skyrocketing in popularity throughout the nation. From San Diego, California to Atlanta, Georgia to Scottsdale, Arizona, cities across the country are activating these red light/speeding cameras. Traffic camera fines range anywhere from $100 to $500 or more.

Cities with traffic cameras enjoy a phenomenal return on their investment. As a matter of fact, red light/speed cameras in Cleveland, Ohio caught more than 2,300 traffic violators within the first month of operation. Each Cleveland red light violator was charged $100 per citation while speeders were fined between $150 and $200.

Unfair violations

Many drivers complain that these red light and speeding cameras can lead to unfair tickets. For example, let’s say you let your sister borrow your car. If a camera snaps her running a red light, the ticket will be mailed to you because you are the registered owner.

Some states, like Georgia, give drivers a chance to contest the ticket if the owner was not driving the car when the violation occurred. However, other states say the owner of the car is responsible for paying the ticket regardless of who was driving their car.

An uptick in accidents

Some research show that red light and speeding cameras may lead to more traffic accidents. A 2008 study by the University of South Florida’s College of Public Health revealed red light cameras significantly increase crashes. This could be because drivers are stopping abruptly at intersections when the light turns yellow in fear that they will receive a camera violation. With so many cars slamming on the brakes at intersections where cameras are present, many cities have seen a sharp rise in rear-end collisions.

Studies from North Carolina, Virginia, and Ontario have also reported cameras are linked with an increases in car crashes, including accidents involving injuries. A study by the Virginia Transportation Research Council also found that cameras were associated with higher crash costs.

However, while rear-end collisions have increased in some areas, studies show that more serious side-impact crashes have decreased due to fewer drivers running red lights.

Driving up insurance rates?

Many drivers worry that these camera tickets will lead to higher car insurance premiums. In most states, camera tickets are considered civil penalties, so they should not result in points on your driver’s license or have an impact on your insurance rates. However, if you rear-end a driver who slams on their brakes at a camera-monitored intersection, you probably will see a hike in your car insurance premiums.

When people buy homeowner’s insurance, they usually intend for it to cover the home in which they live. That is also the insurance company’s expectation, and most of the time, that is the case. However, sometimes circumstances change and the home is left empty. For example, the family goes on a weeklong vacation, or one that lasts a month or more. One member of the couple may accept a temporary job transfer that will last for a few years, and they may decide not to sell the home. In other cases, the family may move into a new home but find themselves unable to sell the prior one. In all of these cases, the home is rendered either unoccupied or vacant. This change in status can affect the insurance coverage.

The standard homeowner’s policy provides coverage for losses caused by vandalism and malicious mischief. For example, the policy will pay for the repair and replacement of windows if the family comes home and finds all of the first floor windows broken. A reasonable person could conclude that vandals broke the windows. However, the policy will not pay if the home has been vacant for more than 60 days. Insurance companies design the policies and set the prices under the assumption that a home will be occupied. A vacant building is vulnerable to damage by vandals, so the companies have designed other policies to cover them.

It is important to understand that a temporarily unoccupied home is not the same as a vacant one. A home is vacant if it has no occupants and contains no personal property (furniture, clothes, TVs, etc.) An unoccupied home still has personal property in it. The policy will pay for vandalism losses occurring to an unoccupied home. So, if a family moves out of a home and it sits empty while they try to sell it, vandalism coverage ceases on the 61st day of vacancy. If the family merely goes on vacation for three months, vandalism coverage remains in force.

The question of whether a loss is an act of vandalism can sometimes be in dispute. For example, a Utah claim went to court after the insurance company denied payment for a fire caused by arson, claiming that arson is an act of vandalism. The court agreed with the company, finding that arson is a form of vandalism and therefore the insurance did not cover the loss.

The standard policy specifically states that a home in the course of construction is not vacant, so the insurance should cover any associated vandalism losses. Also, since an insurance company does not consider a home with personal property to be vacant, coverage applies to any belongings damaged by vandals. However, an important coverage limitation applies to frozen water pipes. The policy will not cover damage caused by freezing of plumbing, air conditioning, heating and sprinkler devices. So, if the pipes freeze while the family is vacationing in Florida during the winter, the policy will not pay for the resulting water damage. This is not true if the homeowner has used reasonable care to maintain heat in the home or if he has shut off the water supply and drained the pipes.

It is always a good idea to consult with an insurance agent when a home’s circumstances change, whether it is for sale or just an extended period of unoccupancy. The owners should consider loss prevention or control techniques, such as security systems and motion-sensitive lights. The combination of loss prevention and insurance may not eliminate the chance of a vandalism loss, but it will provide some peace of mind to those who must leave their most valuable investment.

Every year, millions of people move – from one apartment to another, from an apartment to a home, or from one home to another. Moving is a stressful process, filled with dozens of logistical details and concerns. One set of concerns that many people never consider is whether and how their insurance will apply to their property and any motor vehicles they use during the move.

Many people choose to hire professional movers. Even in experienced hands, moving creates several risks to personal property, including:

• Property may break, disappear, or suffer collision damage while the movers load it onto their trucks, drive it to the new home, and unload it. If the homeowners must live in a temporary residence until their new home is available, the same risks will apply a second time.
• The owners may decide to leave some property at a storage facility because the temporary apartment is too small to contain a house’s worth of belongings. Stored property is vulnerable to damage, theft, or flooding, depending on the facility’s location.
• Property in the temporary residence may be damaged or stolen.

Standard moving contracts limit the movers’ liability for damage to property of others to a certain value per pound, such as 50 or 60 cents. For example, if the movers drop a 100-pound sofa while loading it onto a truck, the most the mover will pay for it is $60. Also, the contracts often absolve the movers from liability for property damaged by “acts of God,” such as flooding, lightning strikes, and hailstorms. While property owners can pay extra to upgrade the coverage, the upgrade normally values the property at its worth after depreciation, it may not cover breakage unless the movers packed the breakables, and it might not cover loss from certain causes such as flooding.

If the owners still have a standard homeowner’s insurance policy in force, it will cover loss to their property while the movers have it, while it is stored, and while it is at the temporary home. The owners have the option of buying coverage that will pay for replacing the property without depreciation, and they can purchase options that will cover the property for more causes of loss.

Many people, especially those purchasing a home for the first time, may rent trucks and move their property themselves. If they have a current homeowner’s or renter’s policy, it will provide the same coverage that the people moving from home to apartment to home have. If the owners have a personal auto insurance policy, it will automatically cover them for liability they may incur for injuries or damages they cause while using the rental trucks. However, it might not cover damage that occurs to the trucks. While some states require insurance policies to cover some rented vehicles, renters in other states may want to consider purchasing the rental company’s collision damage waiver.

Moves can encompass many different circumstances. A family may buy a home but rent it back to the sellers for a period of weeks or months. Empty nesters may sell their freestanding house and move into a condominium. Families may move across the country, shipping some property by truck while they drive or fly to the new region. Regardless, people on the move should consider the insurance implications and discuss them with an insurance agent. Certain types of property (collectibles, musical instruments, artwork) may need special coverage not found in a homeowner’s policy, and a current homeowner’s policy may not cover a newly purchased home that is being rented back to the sellers. The agent can provide valuable guidance on these questions. Moving is stressful, but having the right insurance can make it a little less so.

In the wake of Hurricane Katrina, no one could ignore the shocking media coverage documenting the devastating destruction. When the levees broke and storm waters surged, homes were swept away, families were left stranded on rooftops and many lost their lives. Suddenly, families throughout the nation were forced to ask themselves a frightening question: “What would happen if, in the blink of an eye, we lost everything to a rush of floodwaters?”

FEMA points that out that everyone needs flood insurance. Unfortunately, too many families assume that they don’t need flood insurance because the government will give them the financial support they need if they lose their home in a major flood. This is simply not the case.

The government only provides disaster assistance if the area where the flood occurs is officially deemed a disaster area. Even when the government does provide financial assistance to families in a disaster area, it’s not a payout—it’s a loan that must be paid back, interest included.

Read on for a few important facts everyone should know about floods and flood insurance.

Eye-opening statistics:

Think you’ll probably never be affected by a flood? Think again. According to the National Flood Insurance Program (NFIP), floods are the #1 natural disaster in the U.S. Here are a few more enlightening flood statistics from the NFIP:

• Floods and flash floods occur in all 50 states.
• Everyone lives in a flood zone.
• 20 to 25% of all flood insurance claims are filed in low to moderate-risk areas.
• Just an inch of water can cause costly damage to your property.
• Your home has a 26% chance of being damaged by a flood during the course of a 30-year mortgage, compared to a 9% chance of fire.
• Over the past 10 years (1999-2008), the average flood insurance claim paid in the US was more than $45,000.
• Over the past 10 years (1999-2008), the NFIP paid over $25.5 billion to flood insurance customers.
• The NFIP awarded over $2.6 billion in flood claims to-date in 2008.

Homeowner’s insurance doesn’t cover flood damage

Damage to your home resulting from a flood is not covered by homeowner’s insurance. Why not? Basically, it’s a way for insurance companies to protect themselves. In the 1960’s, a handful of waterfront communities, all covered by the same insurance companies, were slammed with major floods. The deluge of insurance claims resulted in cataclysmic losses for the insurance industry.

Consequently, in 1968, the federal government created the National Flood Insurance Program (NFIP), which is administered by FEMA. According to FEMA, the NFIP was formed to “reduce future flood damage through community floodplain management ordinances, and provide protection for property owners against potential losses through an insurance mechanism that requires a premium to be paid for the protection.”

It’s not available everywhere

Flood insurance is only available in communities where “the appropriate public body has adopted adequate floodplain management regulations for its flood-prone areas.” Unfortunately, communities are not required to follow proper floodplain management techniques. So, before you start shopping around for flood insurance, you’ll want to makes sure that your community is covered.

Coverage is delayed

If a major storm is about to hit your town and local meteorologists are predicting potential floods, you can’t run out and buy flood insurance and expect to be covered. Generally, your policy must be in place for 30 days before it takes effect.

Not all floods are created equal

Flood insurance only covers damage caused by waters rising from the ground. According to FEMA, the official definition of a flood is “a general and temporary condition of partial or complete inundation of two or more acres of normally dry land area or of two or more properties (at least one of which is your property).” FEMA specifies that floods are caused by:

·   Overflow of inland or tidal waters

·   Unusual and rapid accumulation or runoff of surface waters from any source

·   A mudflow

·   The collapse or subsidence of land along the shore of a lake or another body of water, caused by erosion or undermining caused by waves or currents of water

If your home is damaged by a rush of water from broken pipes or a main break, FEMA says your flood insurance will not cover it unless “there is a general condition of flooding in the area and flood is the proximate cause of sewer or drain backup, sump pump discharge or overflow, or seepage of water.”

The price varies

The price tag on flood insurance varies, costing anywhere from $223 to $3,000 a year. The price you pay depends on where you live and what type of coverage you want.

Through the NFIP, $250,000 is the maximum amount of money you can receive to rebuild the structure of your home. However, private flood insurance companies can cover far beyond that amount—for a higher premium, of course. You’ll have to pay extra if you want to cover personal items within your home. Contents damaged by a flood are covered only up to $100,000. If you are renting a home, you can purchase flood insurance to cover your belongings for up to $100,000.