Have you heard stories of people damaging their own property or claiming jewelry has been stolen in order to file an insurance claim and get a little cash?
During difficult economic times, the insurance industry sees higher claims activity. Unfortunately, fraud, such as false insurance claims, also picks up and damages the industry.
If the insurance company is investigating fraud, they may also scrutinize your legitimate claims.
Up-to-date and accurate appraisals for your valuables will ensure that when you file a legitimate claim, you receive the reimbursement you deserve.
Appraisals allow you to list your valuable items with your agent on an agreed-value basis. That means if you file a claim, you’ll be reimbursed for the appraised value. Appraisals are usually valid with an insurance carrier for three to five years, depending on the carrier. When you buy a new item, you should be able to negotiate an appraisal as part of the purchase, depending on the price of the item.
Cost of appraisal can vary, depending on where you live. Ask your insurance agent for a recommendation of where to go to get an appraisal.
If you do not secure an appraisal and only have receipts for your items, you would have to include the total of all the items on a blanket basis. The premium for that coverage is usually less, because the coverage is based on replacement cost versus agreed value. With blanket coverage, you may not be covered for the full amount you paid for a piece, especially if the insurance company secures a replacement piece at a lower price.
For valuables like furs, silverware, cameras, and personal computers, the value may be determined at the time of the loss. You may be reimbursed in one of several ways:
- For the amount of insurance
- For the actual cash value
- For the cost to repair the item to its previous condition
- For the cost of an identical replacement item
You may be able to get a reduced premium if you protect your valuables in a safe-deposit box. Just make sure to notify your insurance company when you remove the item.
Enjoy your bling, but, more important, protect your bling.
Linda Rey is a licensed insurance agent at Rey Insurance with a broad spectrum of expertise in life, accident, health, property and casualty insurance as well as retirement planning and college funding strategies.