Are You Storing Property Out of Sight, Out of Mind?
No one wants to know what it feels like to open a storage unit containing some of your most precious property only to discover that they have somehow been damaged or destroyed. It’s even worse if you check your homeowners policy and find out that your valuables, somehow, fall outside the limits of your coverage.
The good news is you will hopefully never have this experience. With a little planning, there are plenty of ways to ensure that you’re insured even when your valuables are out of sight.
Is your property covered?
According to the Self Storage Association, every year at least 11 million people in the United States keep some of their belongings in storage units outside of their homes.
But is your property covered under your homeowners insurance if the property isn’t in your home? Many people don’t know the answer to this question. Luckily, it’s pretty simple.
Most homeowners and renters insurances policies allow coverage for your belongings no matter where they happen to be located. But there are limits to that coverage, and they may come into play when dealing with special items and collectibles.
Texas Farm Bureau Insurance Agent Robert Lenore says that when in doubt, purchase the insurance offered by your storage facility, since it’s “not going to be subject to the homeowners deductible.” Your storage-specific insurance may also cover perils such as flooding that are not included in your homeowners policy, Lenore says.
Will any of your property be at risk?
Collectors of everything from classic cars to art to stamps have particular storage needs — and with those needs come particular insurance requirements.
One problem people run into: While they’re relying on their homeowners policy to cover what’s in storage, they don’t realize that under their normal insurance plan, the value of some of their items may not be recognized.
So, that collection of 1950s baseball cards your grandfather never threw away: Should you purchase separate insurance to protect it, or is homeowners enough? That depends. If you don’t specify and document the value of something like a Mickey Mantle rookie card, your homeowners policy may treat it like a regular old baseball card and cover it as such.
Lenore says your valuables and collections are safest with property-specific coverage or an inland marine policy, which indemnifies loss on an “all peril” coverage basis, as opposed to your homeowners policy, which is “named peril” coverage. In fact, Lenore says, it is good practice to purchase these policies on valuables even if you are storing them in your house, since an inland marine policy allows for broader coverage.
“Say an engagement ring has a diamond that falls out,” Lenore says. “This would not be a covered peril on a homeowners policy. However, if that ring were stolen, your homeowners policy would allow up to $1,000 in coverage.”
Depending on your policy, there may be exclusions based on how items in a collection are damaged. The advantage of collection-specific policies is that they tailor your coverage to ensure that your collections’ specific needs are met. That means your policy offers another priceless benefit: peace of mind.
Are your valuables safe?
Just like with your special collections, it’s important to attend to the particular needs of stored valuables. The value of jewelry, antiques, rare objects, or memorabilia might quickly add up and far outstretch the ceiling on your homeowners policy.
Homeowners policies will only extend coverage of 10 percent of the personal property value stated on your policy. That means if your coverage ceiling is $10,000, you may only be able to claim $1,000 for the value of items in your storage unit if the damage is due to a covered peril on your homeowners policy.
If your stored items are more valuable than that, you will want to make sure that, at the very least, they are properly covered. According to Lenore, Texas Farm Bureau Insurance will only accept appraisals less than three years old, though if the item is a new purchase, a receipt can substitute for an appraisal, for inland marine policies. But Lenore recommends you always contact your local Agent if you have any questions pertaining to your policy.
Do you trust the quality of your storage facility?
As with other valuables and memorabilia, art comes with own its specifications and limitations. Art storage is big business these days, and many of the world’s masterpieces live in massive full-time storage facilities. However, even the most rarefied art storage facilities are not safe from accidents.
But whether you are storing an Andy Warhol or a few treasured landscapes painted by your grandmother, it is important that you choose a storage facility that can maintain the proper environmental conditions. Insurers will want to make sure the temperature, moisture, fire, and seismic conditions at the facility are up to snuff, and they will want to know details about what you are storing.
When should you add to your coverage?
The safest thing to do is check with your Agent, who can talk you through what your homeowners insurance covers and what may require extra attention, and whether you should consider an inland marine policy. If you’re not sure your storage facilities are in good condition and you are worried some of your property may not be covered, your local Texas Farm Bureau Insurance Agent can put your mind at ease by finding you the right policy.
Coverage and discounts are subject to qualifications and policy terms and may vary by situation.
© 2017 Texas Farm Bureau Insurance
