The basic guiding principle for homeowners insurance is this: policyholders should have enough coverage to rebuild their home if disaster strikes. But that really only pertains to the structure of the home. Repairing or replacing the bare bones of your home is a great start, but you must also consider its contents—both inside and outside the home.
Are your personal belongings only covered if they’re within the walls of your home at the time of the damage-inducing event? Short answer: Not if your policy includes off-premises coverage. The best way to protect your personal belongings is to make sure your policy has them covered (or compare homeowners insurance rates to find one that does). Keep reading to learn more.
Protecting Personal Belongings
As previously discussed, standard homeowners insurance policies cover a percentage of both the structure of your home and your personal belongings. Creating a home inventory, complete with photographs, video and backup documentation, is the best way to accurately valuate your possessions preceding an insurance claim. The more specific your records are, the better chance you have of receiving a fair payout on a potential claim.
But items can sustain damage in places other than the home—a storage unit, a dorm room, etc. It’s important not to forget these off-site items in your home inventory if you expect reimbursement.
A Percentage of Off-Premises Coverage
Aptly named, off-premises coverage protects items anywhere in the world outside the home. But there’s a slight catch. While personal belongings within the home are usually insured at 50 to 70 percent of whatever insurance you have on your home’s structure, off-premises belongings often max out at 10 percent of the amount you have for your personal possessions. While this varies from policy to policy, homeowners should expect off-premises limits to be much lower than overall coverage.
Let’s look at off-premises coverage in action. When a student goes to college and lives in on-campus housing (like a dormitory), they’re typically still covered under their parents’ homeowners policy. But, as the Chicago Tribune writes, “Students’ liability limits may be the same as they are for your home, but they may have only 10 percent of your contents coverage because their possessions are off-premises.” Families may very well choose to add a rider for electronics or valuable possessions knowing they may exceed a standard policy’s off-premises limits.
As with any insurance policy, it’s important never to assume you’re covered. For example, off-premises coverage may be excluded in some areas with high crime rates unless homeowners seek out a rider (which adds a small extra charge to premiums in exchange for specific coverage).
It’s also important to note that vehicles and possessions stowed inside them are usually exempt from homeowners insurance coverage. It’s a good habit to remove anything irreplaceable or valuable in case of theft—and to make sure you have the right type and amount of auto insurance before an incident occurs.
Off-premises coverage as part of a homeowners insurance policy comes in handy if your off-site possessions are damaged or stolen. But these personal belongings only receive a fraction of coverage compared to your dwelling and on-site contents.
Looking for the best protection at the best price point? Visit CoverHound to compare homeowners insurance rates and get your free quote.