Property in Storage & Home Insurance

Do you keep any of your personal property away from your home? Do you have personal items or furnishings in a storage unit, or a friend or  family member’s home? Don’t assume this property is covered by homeowners, renters, condo, or mobile home insurance. These insurance policies have limitations & exclusions for property kept away from your home, so you need to contact your agent or insurance company to find out how you are covered.

Some insurance companies greatly limit your coverage for personal property away from your residence premises. You don’t want to find out the hard way, after a claim, you could have had the insurance coverage you need, had you chosen a better home insurance company.

Written into almost all homeowners insurance policies, is a 10% limit, applying to the dollar amount of your personal property coverage on your home insurance policy, for property off your residence premises.

This limitation does not apply for personal property at your insured location. Your personal property in your detached garage, pole barn, shed, other additional structure on your property, or kept outside on your land, is covered up to the dollar limit of your personal property coverage, even though the property is not kept in your house, and does not have the 10% limitation.

Here is how it works:

Your home insurance declarations page shows $100,000 insurance coverage for your dwelling, and $70,000 for your contents coverage.

Personal property away from your residence premises is limited to 10%, so you would have $7,000 of coverage.

If you kept $20,000 worth of furniture in storage at a family member’s house, and your family member had a house fire, the most you could collect from your home insurance would be $7,000. Your family member’s insurance would not cover your possessions. You would be $13,000 out of your own pocket, if you need to replace this property.

Likewise, if you use a self-storage unit, you need to know if this 10% personal property limitation applies to your homeowners insurance.

The good news is many insurance companies, and insurance companies using the standardized Insurance Service Office (ISO) homeowners insurance policy forms, apply this 10% personal property limitation only to property usually kept at your residence, other than your insured residence.

This applies when you own a second home or dwelling, or rent an apartment (other than the home/apartment you rent as your primary residence, if you are a renter with renters insurance).

For example, you have a vacation home and it burns to the ground in a fire. If you don’t have an insurance policy covering your vacation home, the homeowners insurance on your primary residence will allow up to 10% of your personal property coverage to personal property in your vacation home damaged in the fire.

Personal property in a storage unit, or your personal items kept at a friend’s house, are not another residence for you, so the 10% limitation would not apply.

If you go shopping and buy a lot of things at the mall, and the items are stolen from your car, the 10% limitation does not apply. If you are on vacation, and your personal property is burned in a hotel fire, the 10% limitation does not apply. The 10% limitation applies only to property usually kept at another residence you rent, lease, or own.

Your child’s property, away at school in a dorm, may be considered  at another residence. However, some insurance companies have an exception written into their home insurance policies, to cover the personal property of students away at school in a dorm, while the student is living there, without the 10% personal property limitation.

Another common exception is for a newly acquired residence, which is not treated as another residence, for the first 30 days from when you start to move in to the new home.
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For example, you sell your house and rent a new house. Two weeks after renting it, you are partially moved in, and the rental house has a fire. The 10% personal property limitation may not apply under your old homeowners insurance, as long as you did not cancel the home insurance policy when you sold your home.

However, some insurance companies’ renters insurance policies may not have this exception.

There was a time when most insurance companies used the standardized policies, but many insurance companies use their own policies now, so how & what is covered, and the policy wording, can be very different among insurance companies.

You MUST contact your insurance company to find out how YOUR insurance works. If the coverage does not meet your needs, shop for an insurance company with better coverage.

I have worked for an insurance company which limited ALL personal property away from your home to 10% of the personal property coverage. Don’t assume you have the coverage you need, if you care about any losses to your personal property occurring off your premises. Call your agent and find out how your home insurance policy covers you.

Here is what you need to think about & discuss with your insurance company:

1. What type of personal property do you take or keep away from your home?

In addition to the 10% personal property limitation, certain types of personal property have limited coverage. The 10% limitation is not your only concern, when your $15,000 of jewelry you keep at your grandmother’s house is stolen, if your home insurance policy has a $1,000 theft limitation for jewelry.

Computers, & some types of electronic equipment, may have very small dollar limits of coverage when on or off your residence premises. Do you have an expensive lap top you always carry with you? Tell your agent what property you have away from your home.

2. What is the cost to replace your property you keep away from your home?

The 10% limitation may be enough coverage for these items. If it’s not enough coverage, you know how much more you need.

3. Where is the personal property away from your home kept?

Your agent’s solution to your insurance needs may vary depending on where your property is kept. If you are concerned with your college student’s personal property, what you need to do will depend on whether your child is in the dorm, or renting an off campus apartment, or house sharing.

It’s important to shop to find a good insurance company with a good price, but if you have a lot of personal items in storage away from your home, make sure you also have the coverage you need.

Does your home or renters insurance policy have a 10% limitation for personal property away from your home? Tell me about it. Please leave a comment on my facebook page. Follow me on Twitter for important insurance consumer news and new blog entries at CarInsWatch.