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Will My Homeowner's Policy Cover My Jewelry?

You need to add a low-cost insurance rider to protect jewelry and other valuables.

After you've thanked your special someone for that extra-special holiday gift, contact your insurer. Most homeowners policies limit coverage for personal valuables, and you could fall far short of replacement value if your brand-new Patek Philippe watch is lost or stolen.

Homeowners insurance generally covers your possessions up to 50% of your total coverage. So if you have a $300,000 policy, your home furnishings and equipment are insured for as much as $150,000.

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But most policies also place limits on specific kinds of items -- promising to pay a maximum of, say, $1,500 to $2,500 for all of your jewelry in the event of damage or theft. Other categories that usually have reimbursement limits include silver flatware, firearms, coins, stamps and furs. (Read the "contents and additional coverage" section of your policy for the details.) Accidental loss is generally not covered. So if you lose your engagement ring, you're out of luck.

To raise your coverage limit and ensure that you're protected in case of loss as well as theft, contact your insurance agent and ask either to add a rider to your policy or to "schedule" the item. (You may need a written appraisal, although a detailed receipt may suffice.) Once you set a value and schedule the item, you're covered for the full amount if it is lost, stolen or destroyed. "That makes the claims experience easier because there doesn't need to be an investigation into the value," says Matthew Cullina, of MetLife Auto and Home. Plus, there's no deductible for scheduled items.

Extra coverage is inexpensive. MetLife charges an average of 85 cents per $100 of coverage for jewelry kept at home and 35 cents per $100 for items kept in a vault. (Actual prices vary by company and geographical location.) Revisit your coverage levels frequently -- every three years, recommends Jamahl Johnson, an agent with Erie Insurance in Washington, D.C.

Generally, homeowners policies don't set limits on personal electronic items (other than your overall possessions limit). But make sure that your policy includes replacement-value coverage, which will pay for you to replace your item with a new one, and not actual cash-value coverage, which will leave you scrounging to buy a used PC or TV with the money you receive.

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