Know the “Contents” of Your Policy

When you think of your home insurance policy, you probably think of your house itself. However, the dwelling coverage is only a portion of the policy’s coverage benefit. The contents, or personal property, coverage is also an important part of the policy that is sometimes overlooked. Much attention is focused on having the right value on the policy to rebuild or repair your house in the event of a loss. Unfortunately, many homeowners do not pay the same amount of attention to the contents limits. Knowing exactly what your policy covers as contents will help you keep the right amount of coverage whether you live in some of the largest cities like Houston or Los Angeles or a smaller one like Virginia Beach.

One of the most important things to remember about personal property coverage is the fact that it covers a much broader array of things than dwelling coverage. Unlike the dwelling coverage, which is specific to the house and attached structures, the personal property coverage addresses virtually everything that is not permanently attached to the dwelling. Therefore, there are many items in your home that you may view as being an integral part of your house, but would actually be covered by the contents portion of the policy. As a result, you need to verify that you are accounting for those values in the right place when setting up your policy.

Another area of confusion for homeowners on their policy is that some structures may even fall under the contents coverage. For example, if you have a shed in the yard that is not permanently attached to the foundation or the house, it is actually considered to be personal property. As a result, you will need to have such structures properly valued on the contents coverage and not as part of the dwelling.

Because it covers items that are not permanently affixed, the contents coverage can apply worldwide. If it’s personal property that you own and use, it’s covered anywhere you may be located. Certainly, this primarily applies to smaller items that are portable, but can extend to some larger items as well. In the latter situation, there is usually a limitation on the amount covered. Items that are usually permanently in the dwelling are covered when they are in a different location, but for a lower, specified limit. You should check your policy carefully to understand this limit, especially if you find that you will be moving items into a temporary location.

One limitation on the contents coverage is that it generally carries smaller limits for certain high-value items. For example, jewelry, artwork, and electronic equipment all have limited coverage under the personal property section. These items are covered, but the policy describes “sub-limits,” which are lower limits than what is available on the policy for other items. This is because these items can be difficult to control and difficult to determine the value, so the policy essentially provides a courtesy limit. If you have many of these items that you wish to insure, you can find a “floater” policy that is designed to specifically insure such property.

Understanding where all of your property falls on the policy will help you to select the correct policy limits. This way, you won’t be left underinsured in the event of a loss whether you live in Atlanta, Austin, or whichever other city for that matter.

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