Homewoners Insurance and Business/commercial Insurance

To Schedule or Not to Schedule? That is the Question.

I’m sure everyone has at sometime or another been asked by their agent whether or not they have any property to schedule. If so, you were probably wondering what the right answer was. There are several reasons why some property needs scheduling and other property does not.

A policy that schedules specific personal property items rather than covering all personal property is a Marine policy. Marine policies typically have broader coverages than property policies and they also cover property away from a specific premises.

Therefore, the first reason you should schedule property is because you want broader coverage than the property policy will afford. For instance, the typical homeowners policy will not cover the loss of a stone from its setting, unless you can convince the claims adjuster that someone stole the stone, but left the ring. If you had the ring scheduled on a Jewelry Floater (another word for a marine policy is a Floater), that type of loss would be covered. Another example in a business setting would be your computers. If you experience a mechanical breakdown or damage by a power surge, then the standard Commercial Property policy will not pay for that damage. However, if you schedule you computers on a Electronic Data Processing Policy, the policy can be written to cover mechanical breakdown and power surges.

The second reason you might need to have certain property scheduled is if the property is mobile in nature--in other words, do you carry it with you. Standard property policies used to only cover property at a given location and even current polices oftentimes reduce coverage for property while away from the premises. If the item in question leaves the premises frequently, then you may want to consider scheduling it. Computers, jewelry, golf equipment, camera equipment, musical instruments contractors’ equipment and tools frequently leave the premises, and therefore are frequently scheduled.

A third reason for scheduling certain items might be deductible issues. You might have a high deductible on your regular property policy, say $1,000, and you may not want to risk that much for loss to the particular item in question. For instance, you may have a $1,000 deductible on your homeowners policy, but because you have your golf equipment with you all the time, you think a $1,000 deductible would not be appropriate for your golf equipment. If you schedule it, you can do so with no deductible.

A fourth reason for scheduling property is so that you can establish a value for the property before the loss. Even though insurance companies will not pay more than the actual value or replacement cost of an item, it can be helpful in the event of a loss to have the item appraised and scheduled for a specific value. This is most often the case with artwork, jewelry and antiques.

In summary, if the item is mobile, valuable, susceptible to electronic damage, hard to value or if you do not want a deductible to apply to the item, you should definitely consider scheduling it on a marine or floater policy.

By the way, property should not be scheduled unless it is necessary to do so. When you schedule property, then your regular property policy no longer covers the items that are scheduled. Secondly, your marine policy will never pay more than an item is scheduled for. If the value or replacement cost of the item goes up dramatically, and you fail to increase the limit you have your items scheduled for, then oftentimes the property policy could have paid more for your loss than your marine policy would have. For example, you buy a new diamond ring for $5,000 and call to have it scheduled for $5,000. Over a period of 3 years, the ring is now worth $7,500 but you have not updated the limit of insurance. The ring is stolen from your home, and you turn in a claim. The company will pay no more than $5,000 for your loss, since that is the amount you have scheduled as the value of the property. If you had not scheduled the ring, your homeowners would have covered the full $7,500 amount less your deductible.