The increase in theft and burglary - up 12% on a yearly basis according to local Bureau of Investigation reports - has sent apartment dwellers and home-owning suburbanites alike scurrying to their insurance brokers for reappraisal of their anti-burglar, anti-loss coverage. Their anxiety is at least part of the reason why the money they put out in homeowners' premiums has soared. The standard homeowners policy, though, has some sharp limitations.
For example, the contents of your house - anything from cooking pans to minks and jewels - are only covered up to 50% of the insured value of the house, with a £50 deductible on the total of any one claim. Thus, if a house is insured for £60,000, all the personal property within is worth no more than £30,000 to any insurance adjuster. This type of "package" also puts a maximum recovery ceiling of £500 for all jewels and furs lost in any one theft. In theft-prone London, the ceiling is even lower - £250. Therefore, wise homeowners will check the contents of their homes, have each important item separately appraised and listed under "scheduled articles endorsements" in their homeowners' policies. Many have been doing just that, as insurance industry figures indicate.
Excluding ordinary wear and tear, such "floater" policies cover virtually all risks - with no regard to geographical limits. "Off-the-premises" coverage is automatically included in the endorsement, and that means the insurance company will pay whether the valuables are missed in a London hotel, a restaurant in Tokyo, or a motel on Cape Cod.
Local crime rates, however, are the major determining factor in setting premiums for "scheduled articles endorsements." This means that residents of Leeds and London, the nation's crime leaders, pay the highest rates. Furs, for example, can be insured for about £1 a year on each £100 of value in many places. But they go up to over £4 in London, and £2 in Leeds.
Floater categories, besides furs and jewels, include cameras, fine arts, musical instruments, silverware, stamps, coins, and expensive sports and hobby equipment. Because of the inconvenience and extra charges that accompany writing coverage on single or moderately expensive articles, insurance agents suggest getting floaters only on major valuables. Still, many homeowners insist on "floater" coverage for prized sets of golf clubs, cameras, and such. Rates for fine arts objects vary widely. The premium for a £2,500 portrait is £70 a year in London City, for instance, but would probably be £24 a year in Green Bay, Wisconsin.
Because of the high incidence of thefts of certain items, insurance companies are shying away from writing floaters, and private associations are picking up the business. Ski Theft, a policy administered by UK. Ski Insurance Ltd insures skis and bindings if they are lost or stolen, not broken, up to £250 with £10 deductible.
The premium to members of the UK. Ski Assn. is about £10 a year (membership is £7). A similar policy is available on bicycles, which have been hit by a wave of thefts, from the National Bicycle Dealers Assn., Wickliffe, Ohio.
A leading insurance man suggests updating the appraisal of valuables at each renewal date of one's policy. "That's the only way you can be sure that your insurance coverage meets the value of the item," he says. Whether it's diamonds or lithographs, only a reputable dealer should be dealt with for a valuation, industry experts warn. His word will count heavily in any future claim the policyholder may have to make. Experts also suggest photocopying the original bill of sale and appraisal and sending them to the insurance company, keeping the original in a safe deposit box (perhaps along with photographs of the item). A safe deposit box is also the place for an inventory of all household goods.
Another defence against inadequate coverage of valuables is the "inflation guard endorsement," introduced a year or so ago. For an added outlay of 5% of the regular premium, this endorsement provides a graduated increase in coverage that ranges from 1% after the first three months the policy has been in effect, up to 12% after 33 months.
One option open to homeowners who are trying to keep a ceiling on premiums is to increase deductibles from the usual £50 to £100, £250 or £500. This way they can save up to 20% on basic premium costs--but are also increasing their own out-of-pocket liability in the event of a theft.
Lower insurance rates are also granted if jewellery is kept in a bank vault. Credits are given, too, on stamp and coin collections if they are stored in a fireproof safe or vault with a combination lock. However, there are no deductions given for furs kept in commercial storage, whether it be in a dry-cleaner's shop or fashionable department store. And even though the furs may be stored in locked wardrobes, insurance companies do not consider them as secure as bank vaults and therefore grant no discounts.
Even if a home or apartment dweller can afford the insurance rates, which are increasing at a minimum rate of 5% yearly, he may have trouble buying coverage in some cases. For instance, an insurance company may balk if he asks for coverage on just one or two high-value items, particularly if they are kept in a burglary-ridden area.
And no matter how sound a customer's finances or how high his moral character, an insurer will certainly be hesitant about taking on a person who has a record of misplacing or losing articles. Insurance agents and claims adjusters keep tabs on what they consider "irresponsible" policy holders. In addition, insurance companies usually run checks on people who apply for sizable amounts of floater protection, including their forgetful habits.
Despite the current boom in wall safes, alarms and other anti-burglar protection systems, these do not guarantee a lower insurance rate, a fact that this industry often fails to mention. But it should be noted that setting up such gadgetry may make it a bit easier to buy coverage.
Protection against theft from autos should also be examined. Most homeowner's policies cover only items stolen from a car when there is evidence of forcible entry. Coverage on theft from an unlocked auto is usually only guaranteed if the car is on the policyholders property or in a public garage where he surrenders his car keys to an authorized parking attendant. Coverage to include losses from an unlocked auto can be included in the homeowners' policy by a theft coverage extension endorsement - but with an additional premium, of course. However, insurance advisers warn that such coverage may take some shopping to obtain, particularly in London City and other high crime rate areas.
Finally, most homeowners' insurance policies have a "mysterious disappearance" provision. If a woman leaves a diamond ring in the powder room of a night club, and returns shortly thereafter and finds it gone, the claim examiner reasonably presumes a theft, and coverage is provided. However, if a man loses a ring while gardening on his property, the presumption is that it is lost, not stolen, and therefore he cannot expect to collect on his claim. If he wants to protect himself against his own carelessness, he's going to have to get another floater. His insurer will probably be glad to oblige - at a premium.
Take a turn to casualty protection, and start with basics: the homeowner's package. The truth is that the average homeowner's insurance policy rarely gets attention more than once in three years - when the agent calls to renew it.
Even then, the process has become so routinized that the average householder cannot tell you, off the top of his head, what's covered, what isn't, for how much or how little. An impartial national survey not long ago showed that, in the light of what inflation has done to replacement prices of most things - from restoring a room after a fire to replacing stolen furniture - the majority of UK. householders are under-insured. If you haven't done so in the past... see: On The Casualty Front: Keeping Home Coverage Up To Par