Friday, June 19, 2009

Summer rental...what about my Stuff!

Summer is here and it is time to get the family in the van to hit the open road. Whether you travel to the cabin in the mountains or the condo on the beach one thing is for certain, to paraphrase the comedian George Carlin, you will be bringing a lot of “stuff”. Here is a brief synopsis of where you can expect to find coverage in your homeowner’s (HO) policy for the “stuff" you bring and the “stuff” that is already there.

Stuff I bring
The standard ISO HO policy provides coverage on a worldwide basis for your personal property up to the amount insured under your Coverage C – Personal Property limit. The only limitation to the amount is 10% of the Coverage C limit for property which stays at another residence, such as a second home or college dorm. It also includes guest’s property, so if family comes to visit you, or goes with you to the vacation property there would be coverage for their stuff as well.

Stuff that is already there
The definition of eligible property under Coverage C of the HO policy includes personal property owned or used by an insured. This would include the contents of a rented property such as a hotel room, cottage, condo, lodge, etc. As for coverage for the building of the rental property, coverage is a little precarious. There is no coverage for off-premises building under the standard HO policy, and under the liability or Section II coverage of the HO there is a an exclusion under the property damage liability except for damage caused by fire, smoke or explosion. There is a modest amount of coverage under the Section II liability for Damage to Property of Others, but at the most it is only $1,000.

One important note for the personal property coverage mentioned above; coverage is limited to the perils insured against under Coverage C. The standard policy typically only insures for Named Perils. I would strongly encourage that you endorse your policy or be sure you have coverage for Open Perils on Coverage C. This will give you the broadest coverage possible, not only for your peace of mind on vacation but also with your everyday life.

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