You May Be Surprised to Find Your Personal Property Insurance Doesn't Cover Everything

Don't end up facing an expensive surprise.

Property owners who have personal property coverage on their homeowners insurance will find that most of their possessions are protected. That's because personal property coverage pays to repair or replace damaged or stolen items the policyholder owns when a covered loss occurs.

Unfortunately, personal property insurance through a homeowners insurance policy has some common limits -- and many people may not be aware of what those restrictions are when they buy coverage. That means some people may be faced with an unpleasant surprise in the event of a theft or other loss of personal property.

Homeowners don't want to discover too late that they don't have the protections they expect -- so it's crucial to understand what common limitations home insurers place on personal property insurance. Here's what you need to know.

Personal property insurance may not provide the expected protection in these situations

Property owners could face losses not covered by their home insurance if they don't realize that personal property coverage usually comes with specific (and small) caps on coverage for certain types of very expensive property.

See, most people get coverage for personal property equaling a percentage of their home's value. So they may have tens of thousands -- or even hundreds of thousands of dollars in coverage for their personal items. However, specific items listed in the policy may have much smaller coverage caps.

For example, it is very common for home insurance policies to set a limit between $1,500 and $2,500 (or around that amount) for things like:

• Jewelry or watches
• Furs
• Silverware, goldware, or flatware
• Cash, gold or precious metals, coins, or bank notes
• Firearms

That's because these items by themselves could be extremely valuable, and insurers don't necessarily want to take responsibility for replacing them if they are stolen or destroyed.

Unfortunately, homeowners who aren't aware of these smaller limits but who have expensive items that exceed these caps could find themselves without the protection that they expect.

What can homeowners do to get more coverage?

For homeowners affected by a cap on certain types of property, the best option to get additional protection may be to add a rider or floater on to an existing home insurance policy. This is add-on coverage that provides special protection for these particular items. For example, someone could get a jewelry rider or a firearm rider.

Riders do raise homeowners insurance premiums since the property owner has to pay for the additional coverage they are getting. But they can be well worth the small additional cost because, otherwise, a homeowner could be left with thousands of dollars in uncompensated losses if they end up with too little insurance for some of their most valuable possessions.

It may also be possible to buy standalone policies too, so homeowners may wish to shop around to see whether a rider or a separate specialized insurance policy could be a better deal. The important thing is to understand exactly what home insurance does and doesn't cover and not to end up surprised after a disaster occurs.