Why would you insure something for more than its worth?

Question

like a vase, worth say $4000, you insure it for $6000. why?

Answer 1

With something that expensive, it's would be hard to get the insurance company to agree to a value without an appraisal of some kind.

Some people think that if they overinsure something and something happens to it, they can make money. Chances are, they won't get away with it.

Answer 2

When was the value determined to be $4,000. If the appraisal is a number of years old the vase may have appreciated since. Depending upon the type of fine arts coverage that is purchased you may or may not receive the higher valuation at the time of a claim.

If it is an actual cash value policy (or endorsement) you would need acceptable documentation to corroborate the higher value in order to be paid that amount.

If a stated value or agreed value policy is purchased the company pays the amount that the item is insured for. This type of policy has a higher rate per $100 and not all companies sell it but there is no need to document the value at the time of a claim.

Answer 3

Well, because you think if something happens to it, you'll get the stated value rather than the "worth" value.  Or maybe the value will appreciate by the time you make the claim.

Answer 4

I don't know why anyone would, the insurance company will only pay up to the value of the vase.  If you overinsure, you are paying for coverage you will never use.