Is Your Property in Storage Covered by Your Homeowners Insurance?
Off Premises Personal Property
You have just purchased your first home and are walking out of closing eager to get moved into your brand-new home. You are planning a trip to your storage unit to start retrieving some of your furniture and belongings when you get word that a small fire has occurred in your unit. You arrive to find that you have lost nearly fifteen thousand dollars in furniture and belongings. So, what now? Are you out of luck? Do you need to dip into savings to replace these items? Where do you go from here? Thankfully, your home insurance policy will provide coverage for items off of your residence premises. This is what we call “Off Premises Personal Property”.
What is Off Premises Personal Property?
Off premises personal property coverage refers to the portion of your personal property coverage that is allotted separately for coverage for your belongings not held on your premises. Whether this be property that you are temporarily keeping in a storage unit, furniture that you are temporarily leaving with a relative, or a kid's belongings whenever they move away to go to college. There are a variety of scenarios where off premises personal property could be useful, but in order to better understand it we need to look at a few examples and answer a few basic questions.
Under what circumstances are loss or damage to my belongings covered?
Whether you are storing personal property in a storage unit, hiring movers to take your belongings to a new location, or keeping some items at a friend’s house, there are many different scenarios where your home insurance would cover your personal property away from your primary home. It is always first recommended that you check with your agent to ensure that off premises personal property coverage is included on your home policy. Typically, this coverage is set at a minimum of 10% of your total personal property coverage limit. For example, if you have $300,000 in personal property coverage, your typical home insurance policy would have coverage for $30,000 in off premises personal property. Let’s walk through a couple of different scenarios that my clients have experienced.
Some clients called to let me know that while they were moving into their new home, they would be keeping a fair amount of their belongings in storage to reduce the clutter and stress of moving. Unfortunately, they received a call from the storage company notifying them that a small fire had occurred in the unit. After taking inventory they found that roughly $13,000 of personal property had been damaged. Thankfully they had $20,000 in off premises personal property coverage so after paying their deductible they were able to replace their damaged belongings and finish moving into their new home. This is a perfect example of how off premises personal property is to be used to cover your belongings in the event they are damaged while in storage.
A few years ago, a couple called me panicked because their son who was a Freshman at Texas A&M University had suffered a water leak in his dorm room and many of his personal belongings and furnishings had been ruined. After taking an inventory of damaged belongings they found that there was close to $10,000 in damage. The couple had a personal property limit of $110,000 which resulted in $11,000 in off premises personal property coverage. They were able to refurnish his dorm room and replace his personal belongings.
While both scenarios were drastically different in terms of situation, you can see how both clients were able to use off premises personal property to recuperate the damage sustained. These are both very real-world scenarios that you yourself, or someone you know may have experienced. Off premises personal property is one of those coverages that can really help you out in a pinch.
What kind of damage is covered — and what isn’t?
Now that we have discussed a few scenarios in which your off premises personal property would be covered, let’s talk about what kind of damage is covered and what isn’t. The easiest way to think about what is and what is not covered when it comes to off premises personal property is to look at the home insurance policy. Your off premises personal property will likely be covered for the same perils that your home is covered for. One of the major key points to mention here is that accidental breakage is not covered. What does that mean for you? It means that if you were loading stuff from your storage unit into your vehicle and were carrying out a vase and suddenly dropped it that would be considered accidental breakage and would not be covered.
How are my belongings covered in a move?
One large misconception that I see with a lot of my clients is assuming that their contents are covered in the moving process. Many carriers exclude coverage for your personal belongings while they are being moved by a moving company, but before you panic let's look at a couple of different options to make sure your belongings are taken care of.
For the most part, moving companies actually carry their own insurance that protects belongings in transit. This is something you should always double check with your moving company prior to hiring them. Otherwise, you may find yourself up a creek without a paddle if something were to happen to your belongings in transit.
The alternative to option 1 is to give your insurance agent a call and see if there is a potential endorsement that can be added to your current home policy to cover your belongings during your move. Some carriers will actually offer moving insurance to fill the gap left by the home policy to cover your personal property while it is being handled by movers.
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