Personal Property Theft Sub-limits

Personal Property Theft Sub-limits

© Denis Ryan Kelly Jr.

Most homeowners are unaware of personal property theft sub-limits within their homeowners’ Coverage C (contents). Sub-limits are special limitations (dollar limits) within a homeowner policy regarding personal property that is stolen.

There are specific dollar limits for theft of jewelry, watches, furs, and precious and semi-precious stones. The amount can vary from company to company, but it will generally be in the range of $1,500. Theft of firearms is generally limited to $2,500. Theft of silverware, gold ware, pewter ware, flatware, hollow ware, tea sets, trays, and trophies will have limits of $2,500. To insure these items to their full value, the insured can purchase a special personal property endorsement (sometimes called a floater) to insure each item for its full appraised value. This, of course, has an additional premium to cover the cost of the extra coverage.

A practical example of how a sub-limit works compared to named peril coverage within a typical homeowners policy follows.  A homeowner has a $5,000 shotgun used in competitive trap shooting. If the gun gets burned up in a house fire, the claim would likely be honored by his insurance company because it was destroyed by one of the named perils – fire. Assuming the homeowner had a replacement cost type policy in place at the time of the loss, as long as the homeowner can prove the value of the shotgun, the company would honor the claim.

On the other hand, if a burglar breaks into the owners’ home and steals the $5,000 trap gun (unendorsed), the insurance company will likely try to settle the claim for $2,500 with the policyholder, sighting the very specific policy language regarding the firearm sub-limit of $2,500 for stolen firearms. This coverage limitation can be “bought back” by endorsing the trap gun to the homeowners policy for the full assessed value of the gun.

With any claim where theft is involved, the insured will need to file a police report to get the ball rolling. That is one of the first things the insurer will ask. A claims adjuster will be assigned to the case and will likely ask the insured to provide additional information such as receipts, photographs, and appraisals to verify the value of item(s) being claimed. In addition, by providing the insurer with more specific information such as brand name, model number, and serial numbers when appropriate, this will give the insurer complete information that can speed up the claims process, while at the same time be passed on to law enforcement as they attempt to locate and recover the stolen items.


Greg Holton, owner of Kendall Inventory Service, LLC in Indianapolis, Indiana, is a retired insurance agent with 25+ years’ experience in the industry. He is also an instructor for Insurance Career Training, Inc.
The Hidden Risks of Undocumented Personal Property is a seminar presentation popular with estate planning attorneys, financial planners, and insurance agents as a lunch-n-learn or client workshop event. Contact Greg at 317- 509-8138 for more information

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