If your wedding ring falls off while catching some waves in the ocean on vacation, will your policy cover the loss? Under the property section of nearly all homeowners and renters policies is a coverage for protecting the contents you own in your home. A limit is set for these items, but did you know that certain categories of items have separate sub limits? In most policies, these categories include items such as jewelry, money, gold, silver, coins, silverware, and firearms. The limits from the standard Homeowners policy set by the Insurance Services Office (ISO) are shown in the table below. It is important that you check with your agent or read your policy to see what the limits are in your case. A lot of companies have packages that can extend these limits. To be complete, I’ve listed all of the sub limits categories, but please note that not all of these category limits can be extended with personal articles coverage, and personal articles coverage is not limited to these categories. For instance camera equipment, fine arts, and computer equipment are all very commonly scheduled items.
Homeowners Insurance Sub Limits
|Sub Limit Category||Sub Limit|
|Loss of money, gold, silver, etc||$200|
|Loss of securities, deeds, evidence of debt, etc||$1,500|
|Loss of watercraft (including trailers)||$1,500|
|Loss of trailers not used for watercrafts||$1,500|
|Loss by theft or misplacing Jewelry or Furs||$1,500|
|Loss by theft or misplacing firearms||$2,500|
|Loss by theft or misplacing silverware||$2,500|
|Loss of property used for business on premise||$2,500|
|Loss of property used for business on premise||$500|
|Loss of electronics stored in an automobile||$1,500|
The standard limits may be enough for the typical homeowner but if you own more property in a certain category it may be necessary for you to schedule individual items to make sure they’re covered. On most homeowner policies, an endorsement exists to schedule individual items and in most cases, the coverage is available and commonly offered with the following three benefits.
- Items can be insured with a $0 deductible
- Items are covered in the event of theft, mysterious disappearance, and breakage.
- Items are covered up to the full limit anywhere in the world.
The endorsement can be very affordable as well. For example, to insure a $5,000 engagement ring, you could expect to pay somewhere around $1 per $100 of value or around $50 per year. To add your items to your policy you’ll need a receipt or a recent appraisal of the item. Ask your agent how the coverage will pay at the time of loss. Most policies are actual cash value which means they will pay the cost to replace the item minus any depreciation. Other policies can offer an agreed value settlement, which means that you and the insurance company have agreed on a value upfront and that value will be paid at the time of the loss. With a policy that pays actual cost value, it’s not a good idea to insure an item for more than its worth. The value you have insured the item for is a limit, but it doesn’t guarantee that you will get that much in a loss. If in 2017, you insure your 2012 Macbook Pro for $2000 (what you paid for it in 2012) and you have a loss, the settlement may be closer to $700 due to depreciation. If you’re insuring it for $2,000 you’re paying unnecessary premium!
Your homework assignment is to look at your home, condo, or renters policy, or contact your agent and check the sub limits to make sure you’re adequately covered. If you need more coverage, have a discussion with your agent on what makes the most sense for you. I can promise you that it gives no agent pleasure to deny the full payment of your claim because an item exceeds the maximum sub limit. In fact it may be the least satisfying part of our jobs.