You might be surprised to find that your personal property insurance doesn’t cover everything
Homeowners who have personal property coverage on their home insurance will find that most of their property is protected. This is because personal property coverage pays to repair or replace damaged or stolen items that the policyholder owns when a covered loss occurs.
Unfortunately, insuring personal property through a home insurance policy has common limitations – and many people may not be aware of these restrictions when purchasing coverage. This means that some people may face an unpleasant surprise in the event of theft or loss of personal property.
Homeowners don’t want to find out too late that they don’t have the protections they expect. Here’s what you need to know.
Personal property insurance may not provide the protection expected in these situations.
Homeowners could face losses not covered by their home insurance if they don’t realize that personal property coverage usually comes with specific (and small) limits for certain types of very expensive property.
You see, most people get coverage for their personal property equal to a percentage of the value of their home. So they can have tens of thousands or even hundreds of thousands of dollars in coverage for their personal effects. However, some specific items listed in the policy may have much smaller coverage limits.
For example, it’s very common for home insurance policies to set a limit between $ 1,500 and $ 2,500 (or around that amount) for things like:
- Jewelry or watches
- Silverware, silverware or cutlery
- Cash, gold or precious metals, coins or banknotes
- Fire arms
This is because these items in themselves could be extremely valuable, and insurers don’t necessarily want to take responsibility for replacing them if they are stolen or destroyed.
Unfortunately, homeowners who are unaware of these smaller limits but have big ticket items that exceed those limits could find themselves without the protection they expect.
What can homeowners do to get more coverage?
For homeowners with a cap on certain types of property, the best option for additional protection may be to add a rider or float to an existing home insurance policy. This is supplemental coverage that provides special protection for these particular items. For example, someone might get a jewelry rider or a gun rider.
Riders increase home insurance premiums since the homeowner has to pay for the additional coverage they get. But they may be worth the little extra cost because otherwise a homeowner could end up with thousands of dollars in unrequited losses if they are left with too little insurance for some of their most valuable assets.
It may also be possible to purchase stand-alone policies, so homeowners may wish to shop around to see if a rider or separate specialty insurance policy might be a better deal. The important thing is to understand exactly what home insurance covers and does not cover and not to be surprised after a loss.