It goes by many names—“personal inland-marine coverage,”“personal article floater” and “scheduled personal property.”

No matter what you call it, justdo not forget to call it to the attention of yourpersonal-insurance clients. Inland-marine coverage is an importantpart of the personal-insurance portfolio that is often overlookedby many agents and consumers.

Yes, it is true that most homeowners insurance policies coverdamage to personal property including jewelry, furs and electronicequipment. But these policies almost always limit the amount ofcoverage for certain types of property and the perils covered.

By asking the right questions and properly evaluating thecoverage needs of your clients, you can easily educate them on thevalue of inland-marine coverage.

FIND THE GAPS, FILL THE HOLES

It is not hard to find the unscheduled property limitations in ahomeowners policy. Each policy contains a “Special Limits ofLiability” provision under the personal-property coverage sectionof the contract. While specific language may vary, it is quitecommon to see dollar limits placed on property such as coins,stamps, jewelry, firearms, silverware and electronics. It is alsocommon to find exclusions for certain types of losses, such astheft.

There are many benefits of personal inland-marine coverage, butthe two most significant are broader coverage and higher limits ofliability.

• Most inland-marine coverage is written on an “all-risk” basis,backfilling some of the exclusions of homeowners policies.
• Clients may select the appropriate amount of coverage they needto reasonably replace their valuable items.

A third advantage of inland-marine coverage is that it generallydoes not have a deductible.

To get the benefit of higher limits, the insurance carrier willneed to agree on the requested values based on a certifiedappraisal, bill of sale or some other credible source.

In addition, the fact that coverage is broader underinland-marine policies does not mean they are free of exclusions.Acting as the risk manager for your clients, you should understandall the provisions, exclusions and limitations on any coverage yousuggest. You do not want to end up like the agent I recentlyencountered who failed to take note of, and more importantly informhis client of, the “mysterious disappearance” exclusion on aninland-marine policy written for a high-priced ring. When the ringcame up missing, neither the agent nor his client was happy withthe outcome.

CHANGING VALUES

Now that you have sold your client on the virtues of a personalinland-marine policy, your work is complete, right? Not quite.Keeping up with appropriate values of the scheduled items issomething that should be revisited on a regular basis.

In a time when many homes have lost value, it is easy to forgetthat certain items are actually increasing in worth significantly.Have you seen the price of gold lately? In the last decade, it hassoared from $240 to over $1,500 an ounce.

Gold is not the only thing going up in value. Recently theWall Street Journal reported that the World Art Index andthe Fine Wine Index both significantly outperformed the Standard& Poor's 500-stock index over the last 10 years.

Encouraging your clients to get updated appraisals servesanother purpose. Appraisers can identify loose clasps and bentprongs on jewelry items that may put valuable stones at increasedrisk of loss.

NOT JUST FOR THE RICH

Scheduled personal-property policies are not just for thewealthy and not just for jewelry, fine art and winecollections.  Many clients have valuable property theyhave accumulated through hobbies or personal interests.

For example, I recently met with an agent who discovered one ofhis clients is an avid comic-book collector who has amassed morethan 3,000 comics since childhood. Each one is meticulously storedin a plastic sleeve.

This client did not collect the comics for investment reasons.It was just a hobby. But the client got his collection appraised atthe suggestion of his agent and was surprised to find out he hadover $100,000 worth of comic books in his basement.

Golf clubs, firearms, sports memorabilia, musical instrumentsand camera equipment are just a few examples of hobbies that canget quite expensive and may need inland-marinecoverage.