While more than 85% of American homes are insured, two-thirds of them have inadequate insurance coverage. The high underinsurance rate is mainly due to the relatively high cost of home insurance coverage and the exclusions in this type of policy. For instance, the standard homeowners insurance excludes damage from earthquakes, floods, and hurricanes. Fortunately, there are various ways to protect your property against perils, situations, or hazards that are excluded from your standard homeowners policy. One of the things you can do is to add a special personal property endorsement to your standard home insurance policy. Here’s some more information on this topic.
What Is Special Personal Property?
Also known as open peril coverage, special personal property endorsement covers your home from all perils except those mentioned as exclusions. It provides wider coverage than the standard home insurance policy. More specifically, while the basic homeowners insurance policy does not usually cover damage from earthquakes and floods, a special personal property may cover such perils, provided they are not listed as exclusions. For instance, if your computer gets damaged from floods, this policy will cover the resulting costs provided flood is not one of the exclusions in the coverage.
What Does It Cover?
As the name implies, this policy covers your personal property from all perils, except those excluded from the insurance coverage. For instance, if a power surge damages your electronic devices, including your new television, your standard homeowners insurance policy may not cover the costs of repairs and new purchases. The same case applies when you accidentally spill wine or bleach on your couch. In such cases, special personal property will come in handy to pay for the resulting damages, so long as these perils are not excluded from the coverage.
Who Needs Special Personal Property Coverage?
The basic home insurance policy covers named perils, which depend on the amount of coverage you have. Some of the common exclusions associated with this policy include, among others, aggressive dog breeds, swimming pools, trampolines, mold, floods, wear and tear, high-value items, and ground movement. This means that you need more comprehensive insurance coverage to avoid underinsuring your home.
One way to achieve this is to purchase a special personal property endorsement. While it may not cover every peril, it provides more comprehensive coverage than the standard home insurance policy. As such, consider purchasing this policy if you:
- Own high-value property such as collectibles, jewelry, and art
- Want more comprehensive coverage
- Live in a high-risk area
- Have a lot of exclusions and limits on your standard homeowners insurance coverage
Take note that since open peril coverage is more comprehensive, you will most likely pay higher premiums on your policy. However, you can lower your home insurance costs by:
- Shopping around
- Mitigating the risks at hand
- Asking for discounts from your insurance provider
- Raising your deductible
- Reviewing your insurance coverage every year to remove unnecessary inclusions
A standard home insurance policy typically excludes certain perils, situations, and hazards. To cover the gaps in your home insurance policy, you can purchase a special personal property endorsement. To get a homeowners insurance policy that suits your unique needs, contact our experts at Spotlight Insurance Agency today.