Most experienced home insurance buyers have a good understanding of how personal property is insured as long as the property remains in the home. Many people do not understand how the home insurance coverage on personal property is affected if the property is removed from the home. Let’s look at some common misconceptions or myths about home insurance coverage for personal property away from home.
MYTH: Items in a storage facility aren’t covered under home insurance.
TRUTH: Many people who may be downsizing to a smaller home or safeguarding property inherited due to a death in the family find storage units the best answer to de-cluttering their home. If these items are valuable enough to pay for storing them, you should be financially protected with the proper amount of insurance. In signing any rental agreement, you should find out what types of losses will be covered by the storage facility and whether or not you need supplemental insurance. If your home insurance policy includes “off premises” protection, your contents may already be covered. Keep in mind that even though you may be insured under your home policy, coverage for valuable items like art, antiques, or jewelry may be limited to an amount that would not possibly replace them.
MYTH: If a home policy has $125,000 in personal property coverage, that’s the amount of coverage in the home or away from the home.
TRUTH: Typically, a home policy insures personal property for an amount equal to 70% of the insurance value on the home. This percentage may vary somewhat between companies. Most insurance companies further limit coverage on property that is considered “off premises”, by providing insurance coverage equal to 10% of the original amount. In other words, if a policy provides $125,000 in personal property coverage, the amount of coverage on items away from the home would be $12,500.
MYTH: Personal property of college students is covered under home insurance while they are away at school.
TRUTH: A common concern for parents is whether or not smartphones, laptops, and expensive electronic devices are insured while they are being used at college and away from home. For personal property away at college to remain insured under a standard home policy, two conditions must be met – (1) student must be enrolled in full-time studies and (2) student must reside in an on-campus dorm room. If the student changes status to part-time or decides to move into living quarters off campus, a separate renter’s policy must be purchased to provide insurance on personal property.
MYTH: If gifts are stolen from the trunk of a car at the mall, the only option to recover is to file a claim with the auto insurance company.
TRUTH: Some auto insurance companies are beginning to offer property insurance coverage, but typically, if the item isn’t attached to the vehicle, it isn’t insured against theft in an auto policy. A person would actually have two options in this case – Option #1 – If the gifts were purchased with a credit card, contact the card company to see if there is any theft coverage available; Option #2 – If no credit card theft protection is available, a claim can be filed under a standard homeowner’s policy. It is important to do the math to see if the amount of the loss, less the deductible, is actually worth filing a home insurance claim.
MYTH: If expensive items are taken out of town for a special celebration, it is best to reduce the personal property coverage deductible amount before leaving home.
TRUTH: First, the basic coverage for expensive items like furs or jewelry is normally limited in a standard home policy. Many insurance companies limit this coverage even further by reducing the off-premises coverage to a percentage of the original amount. Reducing the deductible on personal property would increase the premium and probably wouldn’t be worth it. The best way to adequately insure very expensive items is to buy valuable items coverage or have these items scheduled in your home policy.
Home insurance coverage doesn’t have to be complicated, but you must have a clear understanding about what property is covered and for what amount. The best way to understand home insurance is to ask your agent questions about the things you don’t completely understand. It is also important to sit down with your agent at least once a year to review your coverage to make sure the insurance fits your needs and keeps pace with your lifestyle.
Based in San Diego, Axella Insurance Services is proud to serve the insurance needs of San Diego and all of California. Let us help you find the right auto, home, life and commercial insurance to meet your personal needs. Contact us now for quick, competitive quotes.