Where’s the Necklace?

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No insurance professional ever wants a call from a client who has just lost an expensive piece of jewelry or some other expensive item that was not properly insured. The homeowner policy provides very little coverage for items such as jewelry, watches, furs, money, silver, guns, precious gems, and stamp and coin collections. One can, however, increase the sub limits in the policy or specifically insure the items with a special policy called a “Scheduled Floater” or “Valuable Items Floater”. The floaters are useful because they are “all risk” and there is no deductible to contend with. Most people think that the primary reason to insure a valuable item is for theft. There are many other things that can happen. A stone could fall out of a setting or a ring could slip off a finger or be accidentally flushed down the drain. Someone could spill a glass of wine while admiring your stamp collection or a child could decide to change the color of your mink. Some people schedule items that are not restricted on the homeowner policy such as cameras, musical instruments, and fine arts. Again, the appeal is that there is no deductible and the coverage is broad. Also, by placing a value on the item, you establish its worth up front so there is no dispute if there is a claim. We often advise our clients to consider not insuring valuable items that are inherited. The sentimental value can’t be replaced and since there is no monetary investment, paying a premium to protect them may not be worth it. Since many are using higher deductibles on their homeowner policies to save premium, the use of floaters for singular items of value makes even more sense. By having a scheduled floater, you can relax a little- knowing that if that Rolex you got for Christmas is missing, you will get another one without despair, tears, and regret.

The author of this blog, Guy Hatfield CPCU CIC, can be reached at 203.256.5660.

Windfall

trees

I am just finishing up on the claims from Hurricane Sandy. A lot of the claims had do with trees and the damage they did-or didn’t do. One of the concepts that homeowners have difficulty with is who is responsible for a fallen tree. If a neighbor’s tree falls on your lawn, fence, or house, it is your responsibility to pay for the repair and/or removal. A tree is considered by the insurance industry as a neutral item of nature and therefore you are not responsible for damage it does to others. The only exception is when the tree in question was obviously rotted and the neighbor knew of the condition. If this were the case the neighbor would be “liable” and obligated to pay the claim. If a tree lands on a “structure” your insurance will pay for the removal of the tree and the damage to the structure. Driveways, walkways, fences, garages, as well as the house are considered structures. If there are trees that just fall on the lawn, there is usually a small amount of compensation (usually $1000) to get rid of it-after the deductible is expended. There is compensation of usually $1000 for lightning strikes even if the tree is left standing. Lightning normally kills the tree and the insurance company wants to encourage its removal. I often get inquiries regarding “preventative maintenance”. “My tree has gotten so big and I think it may fall on the house if there is a storm”. The insurance industry expects people to take care of their house and property that includes appropriate tree trimming. They won’t pay you to possibly avert a claim. A tree is a beautiful thing but costly to maintain and dispose of. In our early history the tall majestic trees were cut and sold to the British for use as masts on the warships. If a tree happened to fall on its own, the owner could keep it for his own use-hence the derivation of the word “windfall”.

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