Coin Collections, Computers, and Comic Books, Oh My!
Six Surprising Special Contents Limits and Exclusions that Can Impact Any Homeowner’s Property Insurance Claim
How well do you know your insurance limits for special contents? Some of the smallest items in your home may become the biggest hassles when it comes to making insurance claims! The good news? The cost of replacing and repairing many of these items will be covered under typical standard home insurance policies. The bad news? Some items may not be covered fully under your policy.
Although the specifics of these limitations and exclusions will vary by policy, there are some that are frequently seen not only in the Midwest but throughout the US. It is very important that policyholders understand what their special contents limits are because these restrictions can significantly impact the final property insurance settlement.
Manager of Residential Contents - Globe Midwest Adjusters International
We talked to Glasser and to Melissa Marx, Senior Contents Adjuster at Globe Midwest Adjusters International (GMAI), both with over 20 years’ experience at GMAI, to find out what special limits homeowners are most likely to be facing when filing property insurance claims:
1.) At Home Businesses and/or Business Property Stored at Home
Business property, such as computers used for telecommuting, inventory for cosmetic sales or mailing supplies for an eBay business, are generally only covered up to a small amount dependent on the policy or are not covered at all. For those who work from home for a larger company or are running a business out of their house, additional coverage can be purchased to cover their supplies and inventory in the event of a larger loss. However, keep in mind that business records and digital files may not be covered to recreate them should they be destroyed by a loss.
2.) Coins, Stamps, Comic Books and Trading Cards
Often referred to as “Numismatic” and “Philatelic” items within insurance policies, collectibles related to money and stamp collecting are almost always restricted by special limits. Collectible comic books and trading cards may also be limited. These items typically fall into the personal property/contents category of a standard home insurance policy; policyholders will only be reimbursed for the amount up to the limit for that category. Even though the replacement value of their treasured collectibles may be much higher, they still may be limited. Certain collections and other high value items may need to be appraised by an expert and then discussed with your agent to determine what special additional coverage they could purchase to make sure they are fully covered in the event of a loss.
Cash is limited in residential policies with some policies capped as low as $200. If a policyholder keeps cash in their home, it should be stored in a fire proof safe -- not under their mattress. Some policies include gift cards, gift certificates, etc. in this category, so those should be stored safely as well. However, some policies are now separating cash and gift cards into separate limitations; each policy is different.
4.) Jewelry and Furs
For these items, the cause of loss may matter more than the actual damage done. The majority of standard insurance policies include a very low limit of liability for jewelry and furs that are stolen during a home burglary. However, if these same items are damaged or destroyed by a fire or other covered disaster, then they are considered part of the personal property portion of the claim and the policyholder will be compensated for their current replacement value up to the policy’s contents limits - unless the policy specifically limits that category of contents.
5.) Computers and Media Storage Devices
Many policies now have limits on computers and media storage devices (i.e. USB devices, flash drives and external hard drives). Policyholders need to verify their policies limitations and talk to their agent or broker about adding a special home computer endorsement if necessary.
6.) House Guests and Their Belongings
This category can be especially murky and hard to decipher. Generally, items belonging to non-relatives who spend more than one night in a home will not be covered under standard residential insurance policies. If house guests are not relatives – such as an exchange student, girlfriend or boyfriend who stays for an extended period of time without being added to the policy -- then successfully claiming their damaged items can be very challenging. Policyholders should ask their agent or broker about getting additional special coverage otherwise, their belongings will likely not be covered.
How can homeowners find out what’s excluded or limited in their own policies?
Policyholders can request a copy of their policy from their agent/broker or, for some insurance companies, by accessing their policy documents online, and then read the Exclusions and Special Limitations of their policy. These sections will detail which items of contents will be excluded or limited if damaged or destroyed by a covered cause of loss. This section will also detail what types of natural and man-made disasters are not considered covered perils.
When it comes to insuring a home and filing claims for damaged goods, exclusions and special limits can significantly impact a policyholder’s final insurance settlement after a disaster. However, by taking the time to review the policy along with its limitations and exclusions and to add any additional coverages needed, homeowners have a much better chance of maximizing their final financial recovery. Please remember without proper coverage, sentimental value doesn’t count for anything when it comes to property insurance claims.