1. 37376 POINTS
    David G. Pipes, CLU®, RICP®
    Business Development Officer, T.D. McNeil Insurance Services, Fresno, California
    Although property coverage under the homeowners form is extremely broad there are special limits to losses of certain types of property and losses under certain conditions. This is particularly true when the property is unusual.

    There is a special limit of coverage on sports memorabilia and collectors cards. The company will reduce the amount it will pay on this type of loss to a specified amount, usually $2500. One of the problems is establishing the value of these types of items. Another problem is that the items are susceptible to theft and so coverage is routinely denied if the sports memorabilia is in transit or shipped by regular mail. That restriction is waived if they are shipped by registered mail. The company will probably not cover the loss of sports memorabilia if it is located in an unattended vehicle. Finally they will usually limit the loss of a single item.

    Although a homeowner’s policy usually provides replacement coverage for the structure of the home it is frequently subject to a special limit for the roof. This special limit affects the homeowner’s recovery at the time of loss to the actual cash value of the roof if it is more than a given age such as ten years.

    Water damage is often understood to be flood damage but there are types of water damage that can occur inside the home that are also excluded or have special limits. The first point to make is that a homeowner might think that wind-blown water is covered because wind damage is covered. This is specifically excluded in most policies. Also excluded is water or sewage which backs up through sewers or drains. Another water exclusion is water which comes from below the surface of the ground and this damage is often seen in sidewalks, driveways, foundations and swimming pools. A final point is that other materials that are carried along by water are also excluded.

    There are special limits that govern recovery of water damage losses if the homeowner doesn’t take prompt steps to stop the damage, or waits a long time to initiate repairs.

    Many companies have special limit that affect certain breeds of animals. These limits apply to personal injury particularly. Specified breeds that are frequently excluded are pit bulls, Doberman pinschers, and Rottweilers. However, if the homeowner has an animal with a history of biting, losses arising from the actions of that animal can also be excluded. Regardless of breed many insurers have a special limit on the losses that they will pay for personal injury, frequently $25,000 per occurrence.

    Under some circumstances the insurance companies will allow you to purchase coverage for the items that have been excluded. A good example is the water damage caused by water from outside the plumbing system which backs up through sewers or drains. There is rarely covered if the damage is the result of negligence. My father-in-law removed a toilet. The subsequent flooding was not covered.

    The most frequently purchased special limit coverage is jewelry coverage. This is a complicated subject but it allows coverage for items that are more valuable than the basic homeowner’s policy will cover. The same sort of coverage is available for weapons, furs and other high value items which are subject to special limits.
    Answered on February 6, 2015
  2. 2777 POINTS
    Terry A. McCarthy, CLU, ChFC
    President, Insurance Associates Agency Inc., West Chester, OH
    When insurance carriers develop their policies for distribution they consider the types of losses and the types of property that they are including. Some property has a higher susceptibility to loss. Some property is far more likely to be lost because of its nature or character. Money is an example of property with a special limitation. Jewelry has special limitations as another example. When carriers write policies these special limits reflect a places where you may be able to buy back coverage to increase the limit. Keep this idea in mind when you review your needs. Homeowner insurance policies are based upon assumptions made about the needs of all homeowners and the understandings carriers have about the types of property and losses they are likely to incur. All policies should be thoroughly reviewed to make sure they match your needs and I especially point to terms of coverage, perils, exclusions. and limitations. So should you. Tailor your coverage as you might your suit of clothes. It will fit better.
    Answered on February 9, 2015
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