Have you ever wondered if there is a cap or a limit on how much your insurance will pay if you have to file an insurance claim? It’s important to know that maximum limits are there, but not to worry! I’ll give you all the details you need to know about coverage limits and when special limits might apply.
Let’s first breakdown the difference between coverage limits and special limits:
A coverage limit is the maximum amount that your insurance company will pay for on a covered loss. You can find your coverage limit stated in your homeowner’s insurance policy, or by calling your insurance agent.
A special limit applies to certain category items listed in your homeowner’s insurance policy and specifies the maximum amount that the insurance company will pay on those certain category items.
Understanding Special Limits Within Limits of Coverage
So, how do special limits and limits of coverage go together? To better explain, let’s take personal property coverage for instance, as it includes the contents and household goods, some of which may be special limited items. Your policy will disclose the limit of coverage for all personal property, but it will also have special limits for different items that fall under personal property.
HomeFirst® Agency’s manufactured home homeowner's insurance policies that include personal effects protection have a coverage limit stated in the policy. This personal effects coverage will also include special limits on selected categories of items. Those special limit items are also stated in your policy. An example might be a special limit of $1,000 on jewelry.
I know this all can seem confusing so let’s look at a scenario. Say your overall personal effects coverage is $8,000 with a special limit of $1,000 on jewelry. Your house gets broken into and you have a multitude of personal items stolen from your home.
In this example, the total coverage of your personal effects will have a $8,000 limit, which will be the limit of coverage on all items that were stolen from your home. However, the special limit on stolen jewelry means that the limit of coverage on jewelry, regardless of the total amount of jewelry stolen, will be $1,000. The special limit of $1,000 on jewelry in this example, is a part of the overall total of $8,000 coverage for personal effects.
When Special Limits Might Apply
At HomeFirst® Agency, special limits may apply to some of the following types of coverage:
Personal effects protection (jewelry, guns, collectibles, antiques, computers, tools, furs, art, etc.)
Water backup of sewers
Food spoilage due to covered power failure
Fire department service
Some parts of your policy may have different types of coverage and limits. So, read your policy or contact your insurance agent as some of these protections are optional and offered at an additional cost.
Deductibles and Special Limits
It's important to note that your policy deductible could still apply to coverages with special limits. Different covered items with special limits have varied deductibles, and some items with special limits don’t have a deductible.
Coverages at HomeFirst® that have special limits but usually don’t have a deductible include, but may not be limited to the following:
Fire department service
Additional living expenses
Your chosen deductibles will be stated in your policy and can vary depending on the type of loss, the coverage and special limits in your policy.
If you want to know more about our mobile home insurance coverage options or have any questions about how your deductible applies to items that have special limits, give us a call at 800-804-9389. A friendly HomeFirst® Agent will be happy to go over any questions you have!