Burtnett Insurance Agency Blog
Burtnett Insurance Agency Blog
Usually, when we think of home or homeowners insurance, we think about the house itself; the roof, the walls, the floors and foundations. However, covering the personal property contained within is a huge part of such policies, too! Having a roof over our heads is obviously essential, but protecting our belongings - from the ordinary and everyday to the precious and valuable - is important, too.
But coverage for personal property isn't uniform, and there are often coverage limits based on the type of property in question. While some items, like clothes and furniture, may be covered under "unscheduled personal property," more expensive items may need to be "scheduled." So what's the difference between unscheduled and scheduled personal property? What kind of property needs to be scheduled? That's what we're looking at today!
What is unscheduled personal property?
If you have a standard home, property, or homeowners insurance policy, then you likely know that it covers the house itself (which is referred to as the "dwelling coverage"), but it also provides coverage for personal property inside and out. For most basic home insurance policies, unscheduled personal property (UPP) refers to the majority of your common, everyday belongings like clothes, furniture, and appliances.
It's called "unscheduled" personal property because you aren't required to schedule it, or keep a list of each individual item and its value. Instead, your policy provides a certain amount, or coverage limit, to cover the total value of these items collectively. In the event of a claim (such as a fire) where all of your belongings are lost, your insurance would pay either the replacement cost or actual cash value of those items up to the coverage limit after you've paid the deductible.
Coverage limits for unscheduled personal property are usually expressed as a percentage of the dwelling coverage. For example, if your home insurance policy has a $100,000 limit for the house itself and your unscheduled personal property limit is listed as 50% of the dwelling coverage, then you have $50,000 of coverage for personal belongings. If you're uncertain what your dwelling coverage or unscheduled personal property coverage limits are, this information can be found on your policy's declarations page.
However, certain items, like expensive furs, art, and jewelry will likely have sublimits built into the policy language. For example, while you may have a coverage limit of 50% of the dwelling coverage for unscheduled personal property in general, there may be individual limits, such as $1,500 for jewelry, or $2,500 for art pieces. This means your basic policy may provide some coverage for those types of valuable property, but only a limited amount. If you have belongings valued more than the sublimit, you can often purchase optional coverage that expands the limits by "scheduling" your property (more on that in a moment).
Although you aren't technically required to keep an itemized list of UPP, keeping a home inventory checklist with your belongings and their estimated or approximate values listed is a still a good idea. Such a list can be invaluable if you suffer a total loss; the last thing you want to do after such a disaster is try and remember everything that was in your house.
What are the coverage limits for unscheduled personal property?
As mentioned above, coverage for UPP can be either actual cash value (ACV) or replacement cost (RCV), and doesn't necessarily have to match the coverage type you have for the dwelling. In other words, you can have RCV for your house but ACV for your belongings.
It's worth noting that many insurance companies require a minimum percentage of coverage, such as 60% for RCV or 50% for ACV, but you are usually allowed to raise that limit based on your needs. In fact, many insurance carriers encourage policyholders to carry the full value of all the UPP they own to ensure they are fully covered. Often, personal items are overlooked if you make a list, or may be recently purchased and not included in the total value of coverage on the policy. Unless you are compulsive about updating your policy coverage values, these quoted percentages are likely to be too low in the event of a total loss. Of course, raising your unscheduled personal property coverage limit is likely to increase your premium by some amount.
Scheduled vs unscheduled personal property
Depending on your carrier and coverage, there may be certain items that are not covered by UPP, or are specifically excluded. As mentioned, more expensive items, like jewelry, may be covered by UPP, but subject to a sublimit. In both cases, you may consider expanding your policy and scheduling your personal property with an optional "personal property floater endorsement" if one is available.
Using jewelry as an example, let's look at how this might work and why you may need to schedule certain personal property on a floater endorsement. As you likely know, jewelry can cover a wide range of values; something like costume jewelry, or jewelry made from inexpensive metals, wouldn't cost as much to replace. In that instance, you likely wouldn't need to purchase a floater endorsement.
However, if you have a family heirloom made with two ounces of 22-karat gold, that single item may exceed the jewelry sublimit of your UPP. In such a case, you would probably benefit from scheduling said heirloom on a personal property floater endorsement.
Unlike UPP, when you purchase a floater endorsement to cover more expensive items, or items that don't fall under UPP, your carrier will ask you to fill out a special form. This is where you'll list specific items you want to have covered and how much you'll need in order to cover them. Of course, the insurer may require a third party appraisal of the property just to make sure the value and item description are accurate.
Do you need to schedule your personal property?
As we've discussed, determining whether or not you should schedule your personal property depends on a variety of individual factors. Not every insurance company has the exact same requirements as far as what property falls into the UPP category and what will need to be scheduled.
If you're curious about coverage for certain more expensive items, you should first check the declarations page for your current homeowners, home, or property insurance policy. This should indicate your present coverage limits, and the policy language will identify any sublimits. Then, take a look at your personal belongings and create an estimate of what you believe they're worth. Apart from your more common household items, consider jewelry, furs, fine art, and any other personal property you feel might exceed your policy's sublimits.
After going through this process, you can decide whether it's a good idea to reach out to your insurance agent to discuss the possibility of either raising your coverage limits or purchasing a scheduled personal property floater endorsement to expand your existing coverage.