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House Insurance Rate - Covered Property

House Insurance Rate

Answering what is covered property is generally easy. It will be set forth in your policy. As to the dwelling and other structures (some policies use the term separate structures) portion of the ISO HO 3 policy, the policy does not cover land - including the land on which the dwelling or other structures are located. 

Under the other structures coverage, other structures that are rented or held for rental to any person who is not a tenant of the dwelling are not covered. There is an exception to this provision for other structures rented for use solely as a private garage.

Nor does the other structures coverage apply to structures from which any business is conducted. The clear import of this limitation, which corresponds with several other policy provisions discussed later, is that homeowners policies are intended to cover risks of loss incidental to the personal use and occupancy of a dwelling and associated other structures - not an insured's business activities. 

If an insured has business-related loss exposures, the insured needs to buy a separate business or commercial policy to cover those nonpersonal, business loss exposures. House Insurance Rate

What constitutes covered property under the personal property provisions of a standard ISO HO 3 homeowners policy is defined by three separate categories. These are:

  1. covered property;
  2. property which is covered, but for which the policy establishes strict limits on the dollar amount of coverage; and,
  3. property that is not covered.
The concept of covered property is stated broadly initially and is then limited by the two sections of the policy that follow. In other words, the boundaries of coverage are defined more by exclusions than they are by the grant of coverage itself.

Covered property is personal property owned or used by an insured anywhere in the world. In addition, after a loss (and at the insured's request), coverage extends to personal property owned by others (including a guest or residence employee) while that personal property is located on the residence premises occupied by an insured.

There are limits on claims made for property not located on the residence premises. Exceptions are made to these limits for personal property that is moved from the residence premises because the residence premises is being repaired, renovated, or rebuilt and for personal property in a newly acquired personal residence. The exception for a newly acquired personal residence is only good for thirty days from the time the insured begins to move the personal property from the current residence to the new residence.

Low Limit Covered Property

There are several categories of covered property that are made subject to rather low limits. Most homeowners insurers will insure these categories of property for higher limits at a higher premium. These categories of personal property for which coverage is afforded subject to sublimits are:

  • a $200 sublimit on cash. bank notes, bullion, gold, silver, platinum, coins, metal, scrip, stored value cards (i.e., electronic gift cards), and smart cards;
  • a $1,500 sublimit on securities, accounts, deeds, evidences of debt (i.e., promissory notes), letters of credit, manuscripts, personal records, passports, tickets, and stamps, regardless of the medium (paper or computer software) on which this type of material exists;
  • a $1,500 sublimit on watercraft, including their trailers, furnishings; equipment and outboard engines or motors; House Insurance Rate
  • a $1,500 sublimit on trailers or semitrailers used for items other than watercraft;
  • a $1,500 sublimit for loss by theft of jewelry, watches, furs, or precious or semi-precious stones;
  • a $2,500 sublimit for a loss by theft of firearms and related equipment;
  • a $2,500 sublimit for loss by theft of silverware, silver plate, gold ware, gold plate, platinum ware, platinum plate, and pewter, including flatware, hollowware, tea sets, trays, and trophies;
  • a $2,500 sublimit on property located on residence premises that are used primarily for business purposes;
  • a $500 sublimit on business property away from residence premises except as described in the following two categories;
  • a $1,500 sublimit on electronic apparatus and accessories while in or on a motor vehicle, but only if the apparatus is equipped to be operated by power from the motor vehicle's electrical systern even though capable of being operated by other power sources; and,
  • a $1,500 sublimit on similar items as described in the preceding paragraph while away from residence premises but while not in or on a motor vehicle, with the same operating power limiting language.
This is an area in which comparison of the coverages offered by insurers using the ISO HO 3 homeowners policy, as opposed to proprietary, policy forms, may make a difference to you. There is a great deal of variation from insurer to insurer, both in the magnitude of the sublimits their policies provide and the categories of property that are subject to such sublimits.

The policies offered by some insurers provide broader coverage than that of the ISO HO 3 policy, Other companies' policies provide lesser or narrower coverage. This is one of the areas in which comparison shopping and research may be of value to you. The more coverage you can get without the need to schedule certain categories of property, potentially the better for you. 

On the other hand, scheduling property that may be difficult to value in the event of loss provides the protection of an agreed amount of coverage in the event of loss. The ultimate decision depends on the extent and value of your personal property possessions that may fall into the categories of property subject to these sublimits.

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