By Jared Thames of Hennessey, Thames & Leavitt
Preparing for the big hunt? Take a moment to imagine with me right now. You have completed all the preparation. You have spent the summer scouting the best watering holes and now have the perfect secret hunting spot. After only a few days out, you now have the trophy animal in your sights. You take the shot, perfectly hitting your target. The moment of pride has arrived. Your hard work and dedication have paid off.
Returning home, ready to show friends and neighbors the proceeds of your labor, you find that your home was broken into while you and your family were away. The house is in shambles, and you can tell right away that some of your possessions are missing. Among many other items, your gun collection is gone. You start running through the inventory in your head:
- Winchester Model 12 Shotgun – $500
- Colt 1911 .45 Caliber – $1,200
- Smith & Wesson 380 Bodyguard – $400
- Colt Python .357 Mag – $3,700
- Hawken .54 Caliber Muzzleloader – $300
- Ruger 10/22 Fifle – $230
- Barrett .50 Cal – $3,000
- Bernelli 12 Gauge Shotgun – $4,000
. . . all gone!
You anxiously call your home insurance company to begin the claims process. You tell yourself it will be okay. You and your insurance agent are long-time friends. The agent has your back.
Later that day while on the phone with the insurance adjuster, you immediately learn that guns must be “scheduled.” Without the guns “scheduled,” you are only eligible for policy limits on your guns. In this case, you receive policy limits of up to $1,500 per gun and cannot receive more $10,000 total. What?!? But you had over $13,000 worth of guns AND they were appreciating in value! You are only going to be reimbursed for about 50 percent of what you had?!? Why didn’t this “scheduling” thing happen?
My name is Jared Thames and this story is based on a real claim situation that occurred with a competitor. Did you know most homeowners policies limit the amount of coverage you have for your firearms? An unendorsed home policy often contains $1,000 to $10,000 in coverage. That coverage (if it exists) will vary greatly depending on the carrier and policy selected. Too often, consumers discover their inadequate insurance coverage when they need it most: during a claim. At Leavitt Group, we invite our customers to review their coverages annually so we may adjust their policy accordingly. Items, such as firearms, are often accrued over time. Reviewing those purchases and comparing your current inventory to the actual coverage on your insurance policy is very important to ensure you have the right coverage in place.
Additional coverage for firearms is attained by “scheduling” the firearm on the home policy. Here, the firearm is often written as a scheduled personal property endorsement on the home policy or written as an inland marine policy. To schedule your firearms, some companies may require an appraisal from an expert while other companies require a recent bill of sale. The requirements will vary based on the insurance carrier and the value of the firearm. Contact your agent to ensure the items are covered according to your expectations.
Some advantages of scheduled personal property coverage include the following:
- No deductible. If you have to file a claim on an item that is scheduled, many standard/preferred carriers offer a $0 deductible.
- Replacement cost value. Under some unendorsed homeowners insurance policies, losses to personal property are paid based on actual cash value. Actual cash value is often calculated as replacement cost minus depreciation. This means you pay the difference between the purchase price of a new replacement item at the depreciated cost of that item. With scheduled personal property coverage, most standard/preferred carriers will replace the item at replacement cost value. Depreciation is not assessed to scheduled personal property items.
- Broader protection. With scheduled personal property, you will have coverage for additional risks that are not covered under a standard homeowners policy, such as accidental loss or theft.
Depending on your insurance company, there may be a limit on the value you can insure even under scheduled personal property coverage. If you have items that are above this limit, they will need to be insured under a different policy. Your insurance agent can make sure you have the right coverage for your needs as long as they are aware of the high-value items that you own.
It is a good idea to take a thorough home inventory on a regular basis to ensure you have an accurate record of your personal property. In the event of loss, it can be extremely difficult to remember everything you own that needs to be replaced. The following articles offer helpful advice for conducting a home inventory:
Also, the Insurance Information Institute has a very helpful app that you can use to manage your home inventory. Learn more and download the app at https://knowyourstuff.org/
Please take the time to do a home inventory and talk with your insurance agent about the high value items (firearms, jewelry, collections, fine art, musical instruments, etc.). This will help ensure you have the right coverage in place for your needs.