If valuable items from your home were stolen, do you know how much your insurance company would pay to replace them? Many homeowners assume that their home insurance policy fully covers everything inside the home, and are surprised when a claim doesn’t result in the compensation they were expecting. Home insurance policies contain “special limits” for valuables like artwork, cash, jewellery, and collectibles. Reviewing the special limits of your Alberta home insurance policy will help you understand exactly how much coverage you have, and whether additional coverage makes sense to protect your most valuable possessions.
What Is a Special Limit?
In home insurance, a special limit indicates the amount that the policy will pay if certain valuable items are involved in a home insurance claim. The most common special limits are for items like cash, jewellery, collectibles, sports equipment and high-end electronics. Special limits vary by policy and provider, but often cover far less than the value of the items in your home.
So if your special limit for jewellery is $4,000, for example, but you have $10,000 worth of jewellery stolen from your home, a standard Alberta home insurance policy would only pay up to the $4,000 special limit. Unfortunately, many homeowners don’t check their special limits until after they need to make a claim. Always take the time to understand your special limits, and remember that any special limits you find when researching online may be different than the limits in your actual home insurance policy.
Special Limits for Jewellery
For many homeowners, jewellery is the most important consideration when reviewing special limits, because it is both valuable and a favourite target of thieves. The special limit for jewellery is typically quite low, at around $5,000 for all of the jewellery in the home, combined. Since jewellery collections are frequently worth significantly more than $5,000, this is one of the first limits you’ll want to check in your home insurance policy. If you are unsure about the value of your jewellery, an appraisal will help you make informed decisions with your home insurance.
The Difference Between Replacement Cost and Actual Cash Value
The choice between actual cash value (ACV) and replacement cost is one of the most important you’ll make regarding your home insurance. In the event of a claim, ACV compensates you for the current value of the stolen item, which can be significantly less than the cost it will take to replace the item. Replacement cost compensates you for the full cost of replacing the stolen item, so it’s the preferred choice for most homeowners. This is another item that is worth double-checking in your policy, to avoid any unwelcome surprises if you ever need to make a claim.
How to Adjust Special Limits
If you have reviewed the special limits for your Alberta home insurance and wish to add some extra protection, the easiest way to start the process is with a call to your insurance broker. Additional coverage is available for valuable household items, and working with a broker helps ensure that you get the right coverage, for the right price. Your broker has the expertise to review your current coverage, and develop a home insurance plan that covers every base. They may suggest an umbrella insurance policy, which is excellent for ensuring full coverage at all times.
If you have any questions or concerns about the special limits of your Alberta home insurance policy, we’re always here to help. Our brokers hard to provide unmatched benefits and diverse home insurance options to our clients. Contact our experienced teams in Calgary, Banff, Edmonton and the rest of Alberta for answers to your insurance questions.
