Homeowners Insurance and Personal Property

Recent studies have proven that most homeowners don’t know exactly what’s covered in their homeowners insurance policy. This is alarming considering that many of us are paying thousands annually in premium. Homeowners insurance offers coverage for three major things… the structure of your home, your contents, and liability for you and your family.

In my experience the insured’s contents, also referred to as personal property, is the biggest misconception of what’s actually covered in the event of a loss. Most homeowners policies offer 50% or more of Coverage A (the dwelling amount) in personal property coverage. For example, if your home is insured for $1,000,000 (Coverage A), your personal property limit will be $500,000 if not more depending on the carrier. However, if you closely examine your homeowners’ policy you will notice limits on certain items that you would initially assume are covered under your personal property limit.

Personal Property is really meant to cover common items in your house… furniture, clothes, appliances, etc. Items that are not so common such as jewelry, furs, fine art, collectibles, etc., have coverage limits. Other uncommon items might also include: firearms, silver, business property, and computers. The limit for such items is often $2,500 or less.

Common Example: If you’re home is broken into and you claim that $50,000 worth of jewelry was stolen, your insurance company will gladly hand you a check for $2,500 leaving you to learn the hard way of what’s actually covered and not covered in your policy. This situation will also probably lead you to searching for a new agent or broker.

Solution: The items that I mentioned that are not so common should be covered under a separate policy or scheduled in addition to your homeowners’ policy. These options are usually inexpensive and protect those items in the event of a loss.

A good broker or risk manager can help you pick a great carrier to insure your home. They can also help you decide which options are best in addition to your homeowners policy for certain items such as jewelry or collectibles. You’ve worked hard to purchase valuable items, make sure they’re covered!


One Response to “Homeowners Insurance and Personal Property”

  1. […] Homeowners Insurance and Personal Property (yourriskmanager.wordpress.com) […]

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