What Is A Sub-limit On Home Insurance?

When a claim happens on a Burleson home insurance policy, the first thing people wonder is how the claim will be settled. Once that is determined, the next thing is to check to see if the entire claim will be covered or only part of it. A homeowners insurance policy has limits in place for both the dwelling coverage and the personal property coverage. But what you may not realize, is that certain categories of claims can involve what is known as a sub-limit for specific types of coverage. This means that there are additional rules that need to be examined to determine exactly how much of the claim is covered.

So how does this affect me? Sub-limits primarily impact certain kinds of personal property in home insurance. And it's generally related to unique or special items. Do you have a comic book collection? What about guns? Jewelry? These items will have a maximum amount that they will pay out for either single item or a total amount that they will pay for a kind of item. Yes. I know that your policy says that you have $200,000 in personal property coverage. But you cannot use all of it on bicycles. And your mom's antique diamond ring worth $12,000 will have a max payout of $1,500 if you don't schedule it separately. They do this to eliminate abuse of the coverage and also to adequately understand the risk involved and set the premium accordingly. These items require special consideration and unlimited coverage would drastically raise insurance premiums. If you have one of these types of items, it's important to consider a stand alone floater to properly protect them.

Now that you understand how it affects personal property, can it have some sort of similar impact on your home structure? The short answer is yes, on certain things. When you evaluate some of the optional coverage on your Texas home insurance policy, you begin to see sub-limits. Sewer and Drain back-up will have a hard dollar cap that the benefit will pay for, and that is determined when you put the policy in place. Foundation water coverage is one of those items that have sub-limits in more recent years where it used to be up to the dwelling limit. This is why it is important to know and understand what your policy covers!

If you aren't sure what your policy does and does not cover, it is important to speak to an independent insurance agent like Insurance For Texans. A simple review of your coverage can uncover a sub-limit that might sink you other wise.

Ron Wadley is an owner and General Solver of Problems for Insurance For Texans. Ron is a resident of North-East Tarrant County in the Dallas-Ft Worth area. He loves riding his many bikes and watching his Baylor Bears play football and basketball. Send him your insurance questions at ron@insurancefortexans.com.