When we speak with our clients about their home insurance, we at Lane’s always make sure to make mention of special limits on their coverage — specifically, how standard home insurance policies treat high-value belongings.
Many assume their policy covers all contents in their home up to the total contents limit shown on their policy. While that limit does apply to most belongings, insurance policies typically include special limits on certain types of high-value property. Understanding how these limits work is vital to thoroughly protecting your belongings.
Why insurance policies have special limits
Insurance policies are designed to cover a wide range of risks for a large group of policyholders. To keep policies affordable and manageable, insurers apply category limits to items that historically have higher frequencies or severity of loss.
The reasons for special limits are to control overall claim costs, reduce insurance fraud, encourage homeowners to properly declare and document their high-value items, and to allow policyholders to customize their coverage as needed. Insurance companies explain that without special limits, premiums would be much higher for everyone.
Common categories that often have limits
Every insurer and policy wording is slightly different, and that’s where we as brokers come in. We are able to shop through the numerous policies available to us for you in order to find you the best coverage possible to match your situation.
Jewellery and watches: Often one of the lowest category limits compared to real-world values are engagement rings, luxury watches, and inherited pieces. These can easily exceed standard limits.
Artwork and collectibles: Paintings, sculptures, sports memorabilia, coins, and stamps may have combined limits for an entire collection rather than for each individual item.
Cash: Cash limits are typically very low due to the high possibility of it being stolen.
Luxury accessories: Designer handbags, shoes, and accessories are being targeted by thieves more often and may fall under jewellery or general special limits, depending on the insurance company.
Wine and specialty collections: Wine, spirits collections, and similar specialty property may require separate consideration depending on storage and value.
Antiques and heirlooms: Most do not know what their antiques and family heirlooms are worth, and they can be difficult to value without professional appraisals and exceed standard limits quickly.
High-end electronics or specialty equipment: Professional cameras, audio equipment, or specialized sporting equipment may also be subject to limits.
What causes of loss are actually covered?
Coverage limits are only part of the story when it comes to your most treasured items. The type of loss matters just as much as the dollar limit.
Standard policies generally fully cover fire losses and theft (up to category limits). They also limit or exclude accidental damage and disappearances.
For example, dropping a diamond ring down a drain or losing a watch while travelling may not be covered the same way as a burglary loss, unless the item has been specifically scheduled in your policy.
Scheduling an item is also called adding an endorsement or rider and typically provides coverage for an agreed or appraised value, and broader protection for incidents such as accidental damage and unexplained disappearances. There can sometimes be a lower or zero deductible, and coverage that follows the item worldwide (depending on wording) included as well.
Scheduling allows insurance to match a high-value item’s real-world worth instead of putting it into an inappropriate standard category limit.
Appraisals and documentation
Professional appraisals and purchase receipts are very important for items such as jewellery, art, and antiques. Appraisals should be updated periodically, especially for items like gold that are connected to markets.
For other items of value, documenting serial numbers and certificates of authenticity, as well as taking detailed photos, is extremely helpful to brokers and insurers. This helps reduce claim disputes and shorten the amount of time it takes to settle a claim.
Risk management still matters
If you have a lot of high-value items, a professionally monitored alarm system is vital. Also ensure your locks are of high quality and all entry points (including windows) are secured. Smaller valuables should be placed in a fire-resistant safe and fine art, wines and collectibles stored in a climate-controlled environment. It’s also wise to not post your high-value items on social media. These actions may result in lower premiums and better terms.
Trust Lane’s Insurance for all your home insurance coverage needs
Life changes quickly, and your insurance needs to keep up. One of the biggest risks we see is outdated coverage. It’s recommended that homeowners review their coverage at least once per year and anytime you purchase a new (or old) high-value item, inherit valuables, finish renovations, or experience any major life change.
We are a leading Alberta-based insurance brokerage and are proud to partner with progressive providers to ensure our clients have access to the most complete and up-to-date insurance products available anywhere in the province.
As a brokerage, we work for you, not the insurance companies. When you choose us at Lane’s, you’re opting for a proven company with an excellent track record for customer satisfaction. We also offer outstanding claims support and expert advice that ensures all your insurance needs are met. Get started by contacting us at our Calgary, Edmonton, Banff, and greater Alberta offices today for a fast, free, no-obligation quote for home insurance.
