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Insuring Your Personal Property

By October 29, 2020Personal Insurance

When you insure your home and finally arrive at the dollar limit of coverage to rebuild your home, other coverage limits are automatically calculated for you.  One of them is coverage for your belongings (referred to as “personal property” or just “property”).  Insurance companies vary on this calculation.  My insurance company gives me 75% of my home’s rebuild value as a limit for property coverage.  This is in addition to the coverage for my house.  We can get more property coverage (you can too), but this is enough for us.

I haven’t heard many stories about the automatic limit of belongings coverage not being high enough.  One of the reasons for this is that on a standard homeowner policy there are limits of coverage on some of our pricier belongings.  Examples include a limit for cash of $200, jewelry of $2,500, and firearms of $3,000.  Again, insurance companies vary on these limits.  Want to re-think all that cash under your mattress?  A side note:  don’t assume everything you own has coverage.  For example, medical devices such as hearing aids, insulin pumps, etc. might not be covered on your homeowner policy and could be better off covered elsewhere.

Also, what are your belongings covered from?  Damage from fire, tornado, theft, etc., sure; but not for when you simply lose something.  In the insurance-world, we refer to it as a “mysterious disappearance.”  Here’s my favorite story of a “not covered loss”:  on my honeymoon with my gorgeous new bride (that’s the one-and-only Mrs. Michael), we were playing ping pong in the sand at a resort location. Our paddles collided going for a winning shot (she likes to win as much as I do), and the diamond popped out of her ring and landed in the sand.  That diamond would not have been covered on a standard homeowner policy because the diamond was lost.

The solution to the dollar limits of coverage placed on various types of property and the coverage exclusions such as mysterious disappearance (and ping-pong) is to schedule the items on your homeowner policy.  If your agent asks you if you have anything you’d like to schedule, THIS is what they’re talking about.  Go on ahead and have that conversation and see if this additional coverage is worth it to you.  Just so you know, you can’t schedule cash.  That’s a firm $200 limit.  Yes, Mrs. Michael’s wedding ring was scheduled on the homeowner policy, but we lucked out and found the diamond in the sand!!!  Unreal!