If you were watching golf this weekend you saw a pretty unusual happening at the WGC-Bridgestone Invitational. On Sunday professional golfer, Sergio Garcia, hit an errant shot that hit a woman spectator in the hand and broke her diamond ring. The force separated the stone from the ring and the diamond fell into the thick rough. Showing a lot of class Sergio got the woman’s contact info but fortunately after the crowd joined in the stone was found. But what if it wasn’t? Would the ring be covered under the woman’s home insurance?
The answer to that is a great big maybe. If the woman lived in an apartment or a condo or had a traditional homeowners policy (HO-3) then the ring being damaged by an errant golf shot would not be covered. The reason is that on those policies contents are covered on a “Named Perils” basis which means the cause of loss has to be specifically named, like fire and theft. There is no peril named “Errant Golf Shot”. If the woman had her home insured with a policy with contents written on an “Open Perils” basis (HO-5) than there would be coverage in this case. “Open Perils” means that the loss is covered unless the cause is specifically excluded. In this case, because there is no “Errant Golf Shot” exclusion the resulting loss is covered. However, because it is being covered under the homeowner policy it would be subjected to the home deductible which could be $1,000 or more.
Scheduling the ring on a jewelry floater is the way to go. For most people the floater is added to the home policy as an endorsement. The floater is written on an “Open Perils” basis whether or not the home policy is and the floater is not subject to any deductible. In this case she would have been covered even if the stone was not found and she would not have had to pay a deductible.
Of course there are many other “normal” reasons why scheduling your jewelry makes sense but they are not as fun or illustrative as the Sergio story. Please email me at jolson@ColumbiaInsuranceAgency.net or call us at 781-598-5000 if you wish to find out more about insuring jewelry or your home, in general.