A common misconception of homeowners is that all personal belongings are covered under their insurance policy. Unfortunately, there are several capped coverages for the items people deem most important (think maximum jewelry limit of $5,000 in some cases). A separate Personal Articles Floater (PAF) policy is critical to ensure your clients have the coverage they need in the event of a claim.
Standard homeowners’ policies cover the major items in a home, like furniture, clothing, and appliances. However, there are special limits that apply to items such as jewelry, furs, antiques, and silver. The special limits are generally quite low, especially after deductibles are met. What’s even worse is few standard policies will cover those items for replacement cost value and they don’t cover mysterious disappearance or breakage claims.
Here’s the good news. A PAF policy provides stand-alone coverage for your most valuable items. You can insure each item individually, or you can secure blanket coverage. These policies do not require a deductible, so you are getting first dollar coverage. You will receive replacement cost coverage – and in some cases agreed value coverage. PAF policies also have a much broader list of covered perils – most importantly including mysterious disappearance, breakage and flood. If your diamond falls out of your engagement ring while you’re on a trip, how would you feel if you had no coverage for it?
Your clients have more valuables than they realize. See below for the items that get overlooked the most and should carry their own Personal Article Floater policy:
- Fine arts (including antique furniture, paintings, and rare books)
- Musical instruments (note that if an instrument is used professionally, an endorsement will need to be purchased)
- China and crystal
- Coin and stamp collections
- Bicycles, golf equipment, and other sporting equipment
Computers and other electronics
Risk Innovations specializes in High Net Worth and Surplus Lines Insurance. We have several unique markets for Personal Article Floater policies. Our staff of expert underwriters is ready to help your clients secure the coverage they need to be fully protected when the unexpected happens.