While theft is covered under your homeowners insurance, the mysterious disappearance of a valuable item might not be.
Personal lines property policies, such as renters, condo, and homeowners insurance, include some level of coverage for personal belongings in cases of vandalism or theft. That coverage can be used to insure things like jewelry or electronics, and usually has a dollar limit of around $1,000 to $2,000.
But there is a lesser-known issue that may come up when filing a personal property claim for stolen or lost valuables. This is known as the “mysterious disappearance” exclusion.
The mysterious disappearance clause allows insurers to deny claims when an item goes missing under mysterious circumstances. These cases often involve a claim of loss when there is no evidence of theft — for example, nothing else was stolen, no police report was filed, and there is no indication of forced entry.
The exclusion is designed to protect insurers in cases where someone loses or forgets an item somewhere like a hotel room. It also is designed to protect insurers against fraudulent claims that an expensive item was stolen.
Not all home insurance policies contain this exclusion, so it’s best to understand your policy before signing on. If your insurance does contain a mysterious disappearance exclusion, it is still possible to protect the value of your special possessions against unexplained losses.
You may do this by adding a property policy endorsement, also known as a policy rider or personal articles floater, to your homeowners, renters or condo insurance. Doing so will allow you to “schedule” your valuables, or list the items. Jewelry is the most common, but objets d’art, furs, and firearms are other typical scheduled belongings. Any item included in the floater policy will typically be covered, including if it goes missing or is stolen. The floater will even cover the items while you are traveling.
If you are specifically interested in insuring jewelry, it is possible to get a stand-alone jewelry insurance policy. Such a policy may provide adequate coverage if a high-value piece mysteriously disappears. There may be a time limit on reporting the loss, so check the details of your policy. And know that some insurers require you to surrender the piece or return the payout if the item reappears after a claim is paid. Depending on the circumstances and the item’s value, the insurer may also investigate the claim of a mysterious disappearance.
It is important to note that you may need a professional appraisal before a carrier will bind floater coverage. This ensures your items are covered at the correct value.
It is best to work with your JAISIN insurance agent or broker on creating an inventory of your valuables. This will help you determine if your current property policy provides enough coverage for these items or if buying a personal articles floater is the right option for you. If you have high-value belongings, discuss them with your JAISIN insurance advisor. They can help you choose from the best policy options available and avoid surprise exclusions.
This content is for informational purposes only and not for the purpose of providing professional, financial, medical or legal advice. You should contact your licensed professional to obtain advice with respect to any particular issue or problem.
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