When you purchase home insurance for a dwelling for which you are the homeowner, what the home contains is also included in some of the coverage. Also called personal property, this part of the coverage consists of an amount with a minimum value of 50% of the building’s value. Therefore, if your home is valued at $400,000, your coverage for movable property will be at least $200,000. Some believe that this $200,000 is more than enough to cover their assets. It is important to know, however, that there are limits for some property covered in this $200,000. Among such limits, usually, but not exclusively, are the following:
- Jewelry and furs
- Bottles of wine
- Tractors and garden equipment
- Stamps and money
- Sports cards
- Audiovisual media
- Movable property for professional use
- Works of art
- Video games
Here are four examples:
- You come home from a two-week dream vacation in Italy where you visited several vineyards. As a wine lover, you bring back a 2014 Tenuta dell’Ornellaia valued at $199. The bottle will be placed with your souvenirs from previous trips—twenty or so bottles valued between $150 and $300 each. Be careful! A number of insurers have a bottle limit, as well as a limit for the total value of the wine cellar. Often, the limit is $100 per bottle and $5000 for the total value of the wine cellar, and all causes of loss are not automatically covered.
- You recently retired and decided to spoil yourself! You bought a new, state-of-the-art lawn tractor with all the accessories: mulching blade, tow-behind cart, etc. In total, the bill was $9500. You already had a great deal of home garden equipment before making the purchase, such as a hedge trimmer and a snow blower valued at $3500. The total value of your items is increasing quickly and is $13,000 for your tractor and snow blower alone. You enjoy taking care of your small machinery, but do you know if it is well covered by your insurance policy? Some insurers have a $10,000 policy limit on tractors and garden equipment, for all risks covered. For garden tractors, the limit is not based only on value, but on engine power. Some insurers cover garden tractors up to 25 horsepower, and others, 30 horsepower, for both damages to the tractor and civil liability. It is therefore important to determine which limit applies in your policy.
- You have been collecting sports cards since you were young, a passion that came from your paternal grandfather. When he became older, he stopped collecting them and gave you his oldest cards—true treasures! You have some big names in your collection like Gary Carter, Mark McGuire, and Babe Ruth! It is the start of a very nice collection that you haven’t had appraised yet, but it would be good to do so to learn its total value. This appraisal will be extremely useful to prove your loss in the event of a claim, especially since many insurers put a limit of $2000 on trading cards in their policies.
- You are a very competitive cyclist, and you wait impatiently for July each year to take part in the Grand Défi Pierre Lavoie. You have a number of bicycles at home. Your most recent purchase cost you $3500 with all the equipment. Together, your bicycles are valued at $20,000. Take a look at your insurance policy! There are policy limits of $1500 to $3500, including equipment and accessories, for each bike.
In each of these cases, the value of your property exceeds the policy limit. However, it is also possible to insure property that is affected by such limits on an individual basis. Your broker may also suggest specific insurance with an additional premium, but most of the time with no deductible in the event of a claim. For higher-value property, your insurer may require a professional appraisal of several of your items. This appraisal will allow you to be compensated based on the fair value of your insured property.
To better understand your policy’s limits and the risks that are covered, which differ from one insurer to another, contact your Lareau broker. Your broker will confirm the limits with you and ensure that your treasures are well covered!