A standard Homeowners policy provides coverage for your home, detached structures, contents, liability, and other items. It may seem to most people that the policy is a one stop shop to cover all of your personal items against all types of loss. However, every policy we have ever read has exclusions and limitations. The standard HO3 and HO6 (condo unit owner policy) policies have 11 special coverage limitations that you’ll want to know of before purchasing a policy. After understanding the homeowners limitations, you may want to look for other policy options to properly cover your valuables.
11 Special Homeowners Limitations
- $200 for items of currency such as money, bank notes, bullion, gold other than goldware, silver other than silverware, platinum other than platinumware, coins, medals, scrip, stored value cards, and smart cards.
- $1,500 for securities, accounts, deeds, evidences of debt, letters of credit, notes other than bank notes, manuscripts, personal records, passports, tickets and stamps.
- $1,500 for watercraft of all types including their trailers, furnishings, equipment, and outboard engines or motors
- $1,500 for trailers or semi-trailers not used with watercraft of all types.
- $1,500 for loss by theft of jewelry, watches, furs, semi-precious, and precious stones
- $2,500 for loss by theft of firearms and related equipment
- $2,500 for loss by theft of silverware, silver-plated ware, goldware, gold-plated ware, platinumware, platinum-plated ware and pewterware
- $2,500 on property at your home used primarily for “business” purposes
- $500 on property away from your home used primarily for “business” purposes
- $1,500 on electronic apparatus and accessories, while in or upon a motor vehicle, but only if the apparatus is equipped to be operated by power from the motor vehicle’s electrical system while still capable of being operated by other power sources (i.e. antennas, tapes, wires, records, discs or other media)
- $1,500 on electronic apparatus and accessories used primarily for “business” while away from your home and not in or upon a motor vehicle. The apparatus must be equipped to be operated by power from the motor vehicle’s electrical system while still capable of being operated by other power sources (i.e. antennas, tapes, wires, records, discs or other media)
Filling the Gaps on Your Homeowners Limitations
There are typically 3 options to avoid financial loss due to your Homeowners policy’s special limitations.
Option #1: Store in a Financial Institution
The best option for items such as currency, securities, and letters of credit is to store them in a financial institution. Most insurance companies don’t offer increased coverage for these items so it’s best to keep them in your bank account or safety deposit box.
Option #2: Purchase Increased Special Limits
Some Homeowners carriers offer you the ability to increase the special limits. For example, Southern Oak’s Canopy endorsement increases the loss of money from $200 to $500 and the loss of jewelry and furs from $1,500 to $5,000. This may be a good option if you don’t have very expensive valuables. However, for individuals with large amounts of jewelry, furs, or firearms option 3 will most likely be the best option.
Option #3: Purchase a Separate Insurance Policy
When the limitations of your Homeowners policy will not appropriately cover your items, the best option is to get a separate policy. A Personal Article Floater will allow you to schedule items such as jewelry, furs, firearms, and paintings. These carriers may require an appraisal to confirm the value of the item to be insured. These policies typically provide broader “all risks” type coverage and often times have lower deductibles. For watercraft and their trailers, your best option is to purchase a Boat insurance policy. A Boat policy will cover damage to the boat, its trailer, and liability as a result of your operation.
Does Every Policy Have the Same Homeowners Limitations?
Most Homeowners policies that are issued have similar limitations. However, some non-Insurance Services Office (ISO) policies include additional homeowners limitations, decreased special limits, or different policy wording. It’s crucial to speak with your agent regarding these limitations so you can be aware of your coverage gaps. For example, Citizens only covers jewelry, watches, furs, & precious/semi-precious stones up to $1,000 not $1,500 and the limit applies for all losses, not just theft. The same goes for firearms ($2,000 limit instead of $2,500), silverware, goldware, platinumware, & pewterware. So if your firearms are burned in a house fire or is destroyed after wind loss from a hurricane your total loss payout will only be $2,000. Another example is Security First which covers watercraft and their trailers up to $1,000 instead of $1,500 and they add an additional special limit of $5,000 for tools and accessories.
With all the new technology out there, purchasing a Homeowners policy has become easier than ever. However, just because it’s becoming easier to purchase does not mean that coverage language is becoming any easier to interpret. Our agents at Insurance Resources are always there to help you understand your coverage. If you have questions, please call our office at 727-345-0242 or contact Brian Ford at [email protected].