Believe it or not, your homeowner’s insurance covers more than just damage to your house.
It also covers damage to your personal property.
Seeing the term, “personal property insurance” in your homeowner’s policy might strike up confusion. What does that include? Are you covered for any type of loss or damage to your personal assets? What types of items in your home aren’t covered under your insurance? How will you collect if you have a loss to your personal property coverage?
Fires, floods and other catastrophes can damage more than just the structure of your home. When disaster strikes, it’s important that you have enough coverage to get you back on your feet – property included.
What’s Covered Under Personal Property Insurance
Typically, your policy will state a specific dollar figure associated with replacing damaged personal property. The personal property coverage figure is usually a percentage of your home’s value. This covers the following types of property:
- Furniture
- Appliances
- Electronics
- Jewelry
- Equipment, including sports and music equipment
- Artwork
- Memorabilia
- Antiques
- And more…
This list is not exhaustive, but it gives a good understanding the types of property covered by your personal property insurance.
What Type of Perils Yield Payout in Personal Property Insurance Claims?
Beyond the types of property covered under this portion of your insurance policy, there are certain types of perils that are covered too. Knowing these will help you know if you qualify for insurance payout.
Some of the most common perils that you are protected against include:
- Fire
- Theft
- Weather damage
- Falling objects
- Riots
- Vandalism
- And more…
Limitations
Like most policies, this type of coverage comes with certain limitations.
How much you can receive for each lost item.
The first is the dollar amount paid on each item. Many homeowners’ insurance policies will state maximum dollar amount limits. For example, jewelry stolen because of theft might only be paid back up to $1,000. For an expensive wedding ring, that might not cover enough.
Types of perils not covered by your homeowner’s insurance
The next limitation is the type of perils that are not covered by your insurance. Common perils that can result in the loss of property but will not be covered by your policy include:
- Water damage from backups or overflows from a sump
- Power failure
- War
- Intentional loss or damage
- Faulty or defective construction
- Poor maintenance
Types of Property Excluded Under Personal Property Insurance Coverage
Just like there are exclusions in the types of damages that are covered by homeowner’s insurance, there are also types of personal property that are not covered by your insurance policy. Some of the personal items that you might not get compensation for in the event of a loss include:
- Animals
- Motor vehicles
- Aircraft
- Business data
- Tenant property
- Credit cards
How Much Protection Do You Have on Your Property?
Knowing how well protected your personal assets is essential. Without enough coverage, you could be unknowingly at risk of losing substantial valuables and wealth in the event of a loss.
Knowing how a potential loss would be settled in the event of a claim is a key factor in personal property coverage. Ideally, you will have replacement cost coverage on your personal property. That means that your items will be replaced based on their current market value. Here’s an example: if lightning damages several electronic items in your home, you will be able to replace those items.
Often times you have to add this replacement cost coverage to your policy; it is not always automatically included. Without it, your claim payment would be depreciated leaving you out of pocket for the difference between the current value of the property and the replacement cost.
Talk to your insurance agent to get a better understanding of what’s covered and what isn’t on your homeowner’s insurance policy. We’re happy to help you anytime. Call us to schedule your appointment with an advisor and get a better understanding of your policy’s coverage and limitations.
