Homeowners Personal Property Coverage Limitations

When you purchase a homeowners policy, the assumption is that most of your property will be covered in the event of a loss. While this is true, there are limitations placed upon certain items.

The reality is that not all of your personal property is adequately covered under your homeowner’s policy. Some specific item categories have coverage limits. Understanding your policy limits will make sure you know which steps to take to ensure all your personal property is properly covered.

Some categories that have coverage limits seem obvious. Some examples are money, gold, silver, platinum, bank notes, etc. These are covered up to $200. It goes without saying that you shouldn’t be using your home as a financial institution.

  • Firearm collection? Usually no more than $2,500 (and the only peril covered is theft).
  • Any watercraft (along with their trailer and equipment) are covered up to $1,500.
  • Jewelry, precious stones, furs, watches only have $1,500 of coverage as the value can be quite high and should be insured separately.

If you run a business from your home, there is a $5,000 limit on the property used for business purposes on the premises. Any business property away from the residence will be covered up to $1,500.

There are additional categories not discussed here, so you will want to check your policy for clarification.

If you look over the limitation of you personal property coverage and deem it lacking for some of your articles, there is an option. You can opt to insure them separately. This is referred to as “scheduling” your property. It provides extra coverage for specific items that need it. Have the item(s) appraised before you contact you insurance company. If they agree to the value, they will endorse the item on your homeowner’s policy.

Aside from providing proper coverage, scheduling you personal property does have additional benefits.

While your homeowner’s policy pays out the actual cash value (cost to replace the item minus the depreciation) of your items, scheduled property is covered on a replacement cost (amount needed to replace the item without the depreciation deduction) basis. In addition, scheduling property provides more broad coverage. Let’s say you schedule your wedding ring and then you lose it. Covered. Dropped it down a sewer? Covered. You are covered from just about anything that can happen to your item.

Insurance company policies can differ from carrier to carrier. In order to make sure all your property is sufficiently covered, discuss your policy’s coverage limitations and your company’s solutions to these with you insurance agent.