If you collect or invest in gold and silver bullion, you need to know how to safeguard your precious metals from theft and damage. You may think your homeowners insurance policy will cover your bullion in case of a loss, but that might not be the case. In fact, most homeowners insurance policies have very low limits for items such as coins, banknotes, and numismatic-related items. Read on to learn what the precious metals experts from First National Bullion, the silver and gold dealers Scottsdale collectors rely on for outstanding quality and service, explain why homeowners insurance may not be enough to protect your bullion and what alternatives you have to insure your gold and silver.
The Limitations of Homeowners Insurance for Bullion
Homeowners insurance is designed to cover your personal property, such as furniture, clothing, electronics, and jewelry, from perils such as fire, theft, vandalism, and natural disasters. However, homeowners insurance policies usually have sublimits for certain categories of items, such as cash, securities, furs, firearms, and precious metals. These sublimits are the maximum amount your policy will pay for those items in the event of a covered loss.
For example, a typical homeowners insurance policy may have a $200 sublimit for coins and banknotes and a $2,500 sublimit for precious metals. This means if your home is burglarized and your gold and silver bullion is stolen, your policy will only pay up to $200 for your coins and banknotes and up to $2,500 for your precious metals, regardless of their actual value. If your bullion is worth more than that, you’ll have to bear the rest of the loss yourself.
Another limitation of homeowners insurance is that it may not cover the full market value of your bullion. Homeowners insurance policies usually value personal property based on its actual cash value, which is the replacement cost minus depreciation. This means your policy may not pay the current spot price of your gold and silver but rather the price you paid for them when you bought them, or even less. This could result in a significant gap between the amount your policy pays and the amount required to replace your bullion.
If you want to insure your gold and silver bullion for its full market value, you have two main options: buying additional coverage from your homeowners insurance company or buying a separate policy from a specialized insurer.
Buying Additional Coverage from Your Current Insurance Company
One option is to buy additional coverage from your homeowners insurance company, either by increasing the sublimits for your precious metals or by adding a scheduled personal property endorsement to your policy. This is a type of floater that covers specific items of high value, such as jewelry, art, antiques, and collectibles. A scheduled personal property endorsement can provide broader coverage and higher limits for your bullion as well as cover any kind of loss, even if it’s not covered by your homeowners policy, such as misplacing or losing your bullion.
However, buying additional coverage from your homeowners insurance company may have some drawbacks. You may have to pay a higher premium for the extra coverage, and you may have to provide proof of ownership and value for your bullion, such as receipts, invoices, appraisals, or certificates of authenticity. You may have to store your bullion in a certain way, such as in a safe or a bank vault, to qualify for the coverage, and you may have to report any changes in your bullion collection, such as buying or selling, to your insurer to keep your coverage updated.
Buying a Separate Policy from a Specialized Insurer
Another option is to buy a separate policy from a specialized insurer that offers coverage for gold and silver bullion. There are several companies that offer this type of insurance, such as BullionVault, JM Bullion, and SD Bullion. These companies can provide coverage for your bullion at its full market value, regardless of where you store it, whether it’s at home, in a bank, or in a depository. They can also cover your bullion for any kind of loss, including theft, damage, disappearance, or confiscation.
However, buying a separate policy from a specialized insurer may also have some drawbacks. You may have to pay a higher premium than your homeowners insurance, depending on the value and location of your bullion. You may also have to agree to certain terms and conditions, such as allowing the insurer to inspect your bullion or using the insurer’s preferred storage facility or shipping service. You may also have to deal with a different claims process than your homeowners insurance, which could be more complicated or time-consuming.
Homeowners insurance may not be enough to protect your gold and silver bullion from theft and damage. You may want to consider buying additional coverage from your homeowners insurance company or buying a separate policy from a specialized insurer to insure your bullion for its full market value. However, before you buy any insurance for your bullion, you should compare the costs, benefits, and drawbacks of each option and choose the one that best suits your needs and budget.
When they’re looking for the best place to purchase Scottsdale gold and bullion, precious metals collectors should reach out to the trustworthy professionals at First National Bullion. We can answer all your questions and help you find all the information you need on how gold and silver can figure into your investment decisions. Give one of our experienced dealers a call today at (855) 919-2536.
The statements made in this blog are opinions, and past performance is not indicative of future returns. Precious metals, like all investments, carry risk. Precious metals and coins may appreciate, depreciate, or stay the same in cash value depending on a variety of factors. First National Bullion does not guarantee, and its website and employees make no representation, that any metals for sale will appreciate sufficiently to earn the customers a profit. The decision to buy, sell, or borrow precious metals and which precious metals to purchase, borrow, or sell are made at the customer’s sole discretion.