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A homeowner policy does a lot of work. Consider what you get for your premium dollars. The amount you pay to an insurance company handles many, many types of losses to your residence, your garage (whether attached or, increasingly rare, a separate structure), other structures (such as barns, sheds, gazebos, pools, permanently installed playsets), furniture, furnishings and personal possessions.

In order to make things manageable, the amount of coverage provided is based on the amount of coverage that is written for the residence; typically as a percentage of that amount. Just for example a home may have the following coverages:

Residence Coverage

$180,000

N/A

Garage/Other Structures Coverage

$36,000

20% of Residence Coverage

Contents/Personal Property Coverage

$90,000

50% of Residence Coverage

In the above instance, your insurance premium is based on the amount that shows for the residence and the other amounts are applied automatically. So let’s focus on your contents and possessions and the other issues that exist with a typical homeowner policy.

The amount of coverage provided for items such as furniture, appliances, clothes, toys, etc. applies in full to all of the items that are always kept in your house. That coverage usually also applies to items that you, occasionally, take along with you to other places, such as when you are on vacation. However, most policies include important limitations and one of them has to do with property that is permanently stored.

When property is kept at a different location on a full-time basis, a typical homeowner policy restricts the amount of coverage for that property. For instance, contents that belong to, say, a seasonal home may be restricted to 10% of the coverage that applies to a person’s primary residence. At one time, property that was kept in storage at a separate location (such as at any self-storage facility) was fully covered by the contents amount shown on the homeowner’s policy. Recently, some policies have made a BIG change and may now restrict protection to a MUCH LOWER amount such as $2,000 or for 10% of the contents amount that is listed on a policy.

If you store any significant amount of property at another location, it would be wise to be sure that it is adequately protected. Don’t assume….check and be sure! Your local insurance professional is available to help you do so!


COPYRIGHT: Insurance Publishing Plus, Inc. 2011

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