You may need higher limits and extra coverage options if you have a valuable collection of items or a home with unique features. Traditional homeowners’ policies typically lock in limits for furs, silver, and jewelry.
We suggest you consider high-value insurance to provide the following benefits:
Table of Contents
Increased Coverage Limits
Standard homeowners insurance Newark DE offers limited coverage for high-value items like jewelry, cash, antiques, and artwork. If you have items more valuable than your policy limits, consider purchasing a personal property floater (or endorsement) with higher limits to ensure they’re protected.
A personal property floater can increase the limits on specific items and add other valuable policy perks, such as guaranteed replacement cost, which increases your coverage to the total cost of replacing an item if it’s damaged or stolen — even if that amount exceeds your overall limit. It can also provide a fudge factor if your insurer’s valuation estimates are too low, which is not uncommon for older homes with unique features.
Ensure you get and keep a copy of your insurer, agent, or broker’s confirmation that the new limits are adequate. Customer loyalty doesn’t count in this case. You must shop around and choose the best option for your needs and budget.
Coverage for Loss of Use
Also known as Additional Living Expenses (ALE) or Coverage D, loss of use is a standard part of homeowners’ and renters’ insurance policies. It helps reimburses expenses for hotel stays, home rentals, and meals if your house is uninhabitable due to damage caused by a covered peril like fire, flooding, or wind damage.
When purchasing a high-value item, ensure the property is insured with its policy to ensure your possessions are adequately protected in the event of a loss. These separate policies are known as floater policies and work through an appraisal process to ensure that the item is adequately covered.
Remember that loss of use coverage doesn’t pay for mortgage payments, property taxes, or electricity bills – these are your responsibility to pay regardless of whether your home is damaged. However, food costs that increase over your expected budget are typically reimbursed, such as if you spend $200 a week eating out while staying in a hotel.
Coverage for Additional Living Expenses
Homeowners’ insurance policies typically include coverage called loss-of-use or additional living expenses (ALE). This is intended to cover extra expenses incurred if displaced from your home after a covered claim. This can include hotel stays, rental homes, restaurant meals, and other costs resulting from being displaced by a disaster covered by your policy.
The ALE limit is often set at 20 to 30 percent of the dwelling coverage on your policy. Some high-net-worth homeowners insurance providers offer higher limits.
The key to this coverage is that it’s only supposed to maintain your standard of living, not put you in a better situation than before the disaster. That’s why it doesn’t cover things like your mortgage, real estate taxes, or food (except in cases where there’s no kitchen in your temporary residence). Ask your insurer for guidelines on what qualifies for ALE coverage, and be sure to save receipts of any expenses you incur.
Coverage for Personal Liability
When valuable items in your home are lost, stolen, or damaged, you will want the maximum protection available. High-value item insurance (a floater policy) works with your homeowner’s policy through an endorsement. It ensures your possessions are covered up to their actual value rather than the depreciated value. To ensure that your items are adequately insured, you and the carrier agree on their actual value through an appraisal process.
Typical home insurance covers your personal belongings up to specific dollar limits. Still, expensive items like jewelry, furs, silverware, art, and collectibles are typically covered only for their actual cash value minus the depreciation. Luxury homeowners typically purchase a scheduled personal property endorsement or floater policy to cover these items for their officially appraised value.
Similarly, personal liability coverage within your homeowner’s policy may help pay for legal expenses if you are held liable for an injury to someone who visits your home. However, it does not protect your finances if someone is injured by one of your family members — that’s what personal injury coverage within a separate umbrella policy covers.
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