Do you know the true value of that old, ladder-back chair you inherited your grandmother?
What about the silverware you've had in the family for a long time?
If you don't know the current value of these and other valuables in your home, you could be in for a real shock when you make an insurance claim after a burglary or a fire. You could be out thousands of dollars -- even though you thought they were fully insured.
First, let's look at the antique chair. If you have something of especial value, you should have it appraised by an expert. You can find appraisers' names in the yellow pages, and you can get leads from your local probate court and insurance agencies.
"People are often amazed at how much an old chair, mirror or piece of china may be worth," says Juichi Kamikawa, a Washington, D.C. member of the American Society of Appraisers.
Once you hve a signed and dated appraisal of your valuables, you should send a copy to your insurance company to be officially scheduled in your file.
If you don't have accepted appraisal of antiques, fine porcelain or paintings, they may be considered "used furniture" or "household goods" worth a few hundred dollars at most. Their actual value could be in the thousands.
You'll find that certain items have insurance limits. Just sending in an accurate appraisal won't cover these.
Depending on where you live, silverware can have a limit of $1,000, jeweley $500, coin and stamp collections $500, furs $500 and guns $1,000.
If for example, you have silverware worth $3,000 and the coverage cap is $1,000, you will only get back $1,000 after a burglary or fire.
For these special-limit items, you have to get a policy endorsment or a floater. An endorsement generally costs less, but has limitations. The endorsement will raise the insurance cap from say, $1,000 to $3,000 or $5,000 (endorsement limits vary from state to state).
If some endorsed items are stolen or destroyed in a fire, you can make a claim up to the new limit -- but you have to have receipts or appraisals to prove the value.
With a floater, you're buying a separate, smaller insurance policy for a single item or several related items. You must have an appraisal done by an expert, and the insurance company must accept the appraised value.
Then, if the item is stolen or destroyed, you are paid the appraised value -- no questions asked. With floaters, like any general insurance coverage, you should keep raising the coverage to keep with inflation.
Floaters also cover every conceivable risk while general insurance and endorsement only cover specified risks such as fire, smoke and water damage plus theft.
In general, the contents of a home you own are insured for one-half the value of the overall property. If your home is insured for $1000,000, then the contents are insured for $50,000. But, as previously mentioned, you aren't automatically reimbursed for the true value of stolen or destroyed valuables. You have to prove what they're worth. This is where the appraisals come in handy.
Q. We have a three-year-old car, and our insurance premium was practically doubled from one year to the next. The insurance comapny said it was because of our two sons (ages 17 and 20) who each had damage accidents with the car.
We were told we could cut the premium cost almost in half by excluding our sons from the policy, which would mean they culd not drive the car without the risk of nullifying all of our insurance. It could save us hundreds of dollars. Are there any catches?
A. There is a catch -- and it's a big one. If you exclude your sons from your policy, you are also excluding them from your liability coverage. At least this is true is a number of states (yours included). Some states don't allow named driver exclusions.
You may be able to keep your sons from driving your car. But, what about their friends' cars? If one of your sons has a serious accident and people are injured or killed, you could be sued for a big sum of money. Your insurance wouldn't cover it, and you could be wiped out.
Your best bet is to pay the full coverage and not exclude your sons. You can always make your sons chip in to pay for the extra insurance costs -- or not have use of the car.