Do I need special insurance for my area rugs?
by Lynn Tall, www.rugadvocate.com
Most area rugs, even hand knotted ones, might be covered under your homeowner’s policy under the home’s CONTENTS coverage. This is typically an arbitrary round figure ($10,000, $20,000, etc.) decided upon by your insurance provider, covering everything from television sets, to computers, to linens, and other furnishings – including your rugs.
About once a year, take a moment to assess your contents and your coverage. If the quality of your furnishings has improved over time, you may need to up your coverage overall. Watch out for caps on coverage! For instance, if you estimate your jewelry to be valued somewhere around $5000, but your policy caps any reimbursement at $2500, you’ll want to add a special RIDER for your jewelry onto your policy. The same goes for your rugs! If your rugs have an estimated value that is exceptionally high, you can do the same to cover their likely replacement cost.
Your insurance agent will ask you for is a written appraisal of your rugs’ value. Having a written, professional opinion means much more than a sales receipt to an insurance adjuster. It’s an uninterested, educated, third-party opinion as to the value of an object. In addition to your written appraisals and sales receipts, be sure to keep plenty of photos of your rugs. These photos should be clear, well lit, show as much of the item as possible, and should include a family member or pet in the frame. This helps protect you against any future potential suspicion of insurance fraud. (It happens!) You may also be asked for sales receipts for your rugs, so do be sure to keep them!
Be aware that a sales price and a written appraisal value will likely not be the same figure. Rugs can be purchased at a discounted price, but could gain value over time. This is an especially good reason to have your rugs cared for by a professional who is able to give you a quick verbal appraisal, or a written appraisal, if the value warrants it. You definitely want to keep your replacement values up to date on your insurance policy! A well written appraisal will be important to have, should you suffer a loss of property.
Conversely, rugs are often purchased at a high retail price but, like when you drive a new car off the lot, they lose value as soon as you take them home. These rugs are going to have a high price tag, but a low appraisal value. In this case, be sure your policy covers the full replacement value. A written appraisal is good, but in this case, well-documented sales receipts are more valuable should you need to replace via insurance coverage.
When you obtain luxury items like a car, a home, or expensive jewelry, you insure them for replacement value or higher in case of damage or loss. It’s the smart thing to do. Appraise and insure your rugs too.