Living Prepared

15
Jan

Understanding your policy:  Special Limits of Liability

Although standard homeowners’ policies cover your personal property, there are special limits of liability for common household items. That means there could be potential gaps for you to be aware of.

What is Limit of Liability?

A limit of liability on your insurance policy is a limitation within your policy that states the maximum amount for which an insurance company may be held liable.

Example of how it works

Let’s say you leave for the night and you come home to your house burglarized. The thieves took all your jewelry, 3 firearms, and your gold-plated ware. You go to file the claim with all the supporting documents showing the value of each item that was stolen. Your jewelry was worth $7,000 your 3 firearms were worth $3,500 and your gold-plated ware was worth $5,000. In your mind, you believe you should get $15,500 since it was your actual loss. Despite filling out the paperwork and having proof of the value of each item that was stolen, you only receive $5,500 back. You are left wondering “what happened?”

With the Special Limits Liability outlined in home insurance, it states maximum amounts for each specific item. With Prepared Insurance, the jewelry is a maximum of $1,000, the firearms are $2,000, and the gold-plated ware is $2,500 totaling $5,500. There is no fault on either side, just a costly misunderstanding of what the insurance covers.

Why are there special limits?

Special limits ensure that the cost of insurance remains affordable for everyone. Special limits usually limit items to a value that the "average" person would have so that there is a fair amount of coverage provided.

Prepared’s Special Limit items

Here is a list of what our home insurance special limits liability covers so you can be knowledgeable on future home insurance contracts.

  • $1,000 on deeds, evidence of debt, letters of credit, personal records, and passport
  • $1,000 on watercraft of all types, including trailers or equipment
  • $1,000 on trailers or semitrailers – not used for watercrafts
  • $1,000 on jewelry, watches, furs and precious stones
  • $2,000 on firearms and related equipment
  • $2,500 on silverware, goldware, and platinum ware
  • $2,500 on property used for business purposes on premise
  • $250 on property used for business purposes off premise

The Titanium Package (Ti22) from Prepared was designed for all homeowners to protect what matters most to them. This endorsement will strengthen your coverage when added to the HO3 Policy.