Overview:
If you have high-value items such as jewelry, an expensive instrument, or artwork then you may want to consider a Personal Articles Policy (PAP), sometimes also called a Personal Articles Floater policy. This ensures that your precious item is covered for a pre-set value and for a broader range of risks.
How Personal Articles Policies work?
A Personal Articles Policy insures your special item at a set value, with a certain deductible, and usually on an “open perils” basis.
Let’s talk about the value first.
While home and renters policies typically offer substantial coverage for your personal property, they usually have internal “Special Limits” on certain categories of personal property.
For instance, your home insurance policy may limit jewelry coverage to $1,500 for a loss due to theft, or guns to $5,000. In other words, if you have a $10,000 wedding ring that gets stolen, the policy will compensate you $1,500 after the deductible. Or if you lose $10,000 worth of guns in a fire, the home policy is limited to $5,000.
That’s where a Personal Articles Policy (PAP) can be helpful. You get the item– your “personal article”– insured for a specific value.
With a PAP, you can insure your $10,000 wedding ring for $10,000 with a $0 deductible. If it’s stolen, the insurance company will pay out $10,000. The entire thing is covered at the agreed upon value.
And the deductible is the amount you’re responsible for before the company kicks in their portion.
What does “open perils” mean then?
In short, it means your personal articles policy covers a broader range of perils than a homeowners policy. While a home policy usually covers things like theft, fire, or vandalism, a home policy usually won’t cover accidental breakage.
For example, let’s say you drop your ring breaks and loses its stone. Or let’s say someone accidentally fall onto your cello and breaks it. These types of incidents won’t usually be covered under a standard home policy, but a PAP would likely provide coverage and with a lower deductible.
What can be insured on a Personal Articles Policy?
All sorts of high value things: jewelry, instruments, high-value electronics, bicycles, photography equipment, art pieces, collectibles or collections.
Can Personal Articles Policies be adjusted?
Yes. And it’s a good idea to occasionally revisit the value of your insured items because values can change. The important part to remember is that your PAP insures an item at a set value; so, if there are significant changes in value, it’s up to you to notify the insurer.
What are the advantages of a Personal Articles Policy?
Your valuable item is covered at a set amount. You know your $8000 violin, bow, and case is fully covered.
Your valuable item is covered for a broad range of losses. You lose your wedding ring, covered. A guest falls into your $5,000 artwork and rips it. Covered. Your $10,000 coin collection is melted in a fire. Covered.
You can opt for a low deductible. Your home insurance might have a $2,500 or $5,000 deductible, but you can easily select a $250 or $500 deductible on a PAP.
The claims process is simpler than with a home policy. There’s a clear record of the item and its value on file.
Finally, a claim on the personal articles policy may not affect your homeowners policy with some carriers.
What do I need to get a PAP? Or, what’s required for one?
At a minimum, you’ll need a full description of the item, purchase price, date, and value. If the item is beyond a certain value, say more than $10,000 or $25,000, the insurance carrier may require a recent appraisal.
How much do PAP’s cost?
A ballpark estimate is that you can expect to pay about 1% of the value of the item per year. So a $10,000 ring would probably be about $100 per year. A $5000 cello, probably about $50.
Keep in mind that the pricing will vary based on the item type, deductible, use, and location. It doesn’t hurt to call a local agent for a quote.
Can I schedule my item on my home insurance policy?
Some carriers will allow you to add a specific item at a set value and sometimes with a lower deductible to your home policy. The benefit of insuring your item this way is that it’s included in your home policy, but it’s worth double-checking the limitations. The coverages may not be as broad and any claim will likely be attached to your home policy.
Other Helps
- A few local jewelry resources for appraisals: Ken and Daughter Jewelers in Newberg, Jewelry Appraisers of Portland (in Lake Oswego) or Smith and Bevills (in Beaverton). Do your own research.
- Go here to request Auto & Home Insurance Quotes, or give us a call to inquire about Personal Articles Policies. We’re glad to answer your questions.
- Learn more About Us (actual people!), our Sensible Approach, or our Carriers.