Peace of Mind When You Travel -- Understanding Off-Premises Insurance
If you have good homeowners or renters insurance, you probably leave home for your annual vacation trip or business travel with a sense of peace of mind -- knowing that the property you left behind is protected by your policy.
But what about the stuff you take with you, or, for that matter, any personal property that you carry or store away from your main home? Supposing something is lost or stolen?
For instance, clients often ask us, does homeowner insurance cover theft outside the home?
In the insurance business, this is known as off-premises personal property and, in most cases, it's probably covered in your main home insurance.
But, like most things, it's not quite as straightforward as that. And it's subject to quite tight restrictions you need to know about.
With that in mind, let's take a closer look at how off-premises insurance works and what it covers.
What is Off-Premises Coverage?
A simple definition of off-premises coverage (OPC) is that it insures certain personal property that you normally keep at home, when you take it with you or store it somewhere else.
Off-premises coverage is usually, but not always, a standard clause in your homeowners or renters policy.
However, with some exceptions, the amount of coverage you get is limited. In most cases, protection is restricted to 10 percent of the personal property limit of your main home insurance policy.
So, for example, if your policy caps protection for the contents of your home at, say $100,000 (which is the normal amount), your off-premises coverage will be capped at $10,000.
If this is not enough protection, you can arrange further coverage for your belongings either through an umbrella insurance policy or an endorsement to your existing homeowners or renters insurance called an "increased limit on personal property in other residences".
What Does Off-Premises Insurance Cover?
It protects you against the same perils for which you're covered at home, including loss, or damage through fire, lightning, theft and vandalism -- and it protects you wherever you happen to be in the world, unless places are specifically excluded in the policy wording.
Naturally, it doesn’t cover autos or related equipment and accessories. It also doesn’t cover watercraft. Nor does it protect you against items that are lost or damaged through your own fault -- you need travel insurance for that.
Examples of Off-Premises Property Losses
There are all sorts of scenarios where off-premises insurance coverage, while you're traveling, can save your bacon.
- Theft from your hotel room or wedding venue;
- During airport security vetting -- thieves have been known to take laptops as they emerge from scanners;
- Lost luggage (but see below);
- Loss of an item from your student son or daughter's dorm room;
- Items you transport between your main home and a second residence (but not the stuff you keep permanently in your second home -- that requires separate insurance.
- Theft of a non-auto related item from your car, such as your shopping or a new household item you bought (which may not be covered by your auto insurance).
It also protects you against damage or loss of personal property kept in an off-premises storage unit, such as a mini warehouse. This is important because many storage unit operators have an exclusion clause in their leases that absolve them of responsibility for such losses.
In most cases, personal property in a storage unit is not subject to the standard 10% limitation mentioned earlier. Some self-storage companies may also offer you additional, separate insurance.
What Else Do I Need to Know?
Here are some other issues to consider when weighing up the provisions and extent of your off-premises insurance:
- You may also have alternative or additional coverage elsewhere. For instance, many credit card providers offer protection for loss or damage to newly-purchased items. Airlines may compensate you for lost luggage. (Always keep an inventory of the items in each of your suitcases).
- You may have to pay a deductible. A deductible is the amount you must pay out of your own pocket before your insurance policy kicks in. For example, if you're making a claim for a $250 loss and your deductible is $200, you may think it's not worth claiming it if this is also likely to impact your future premium.
- High-value items, like jewelry or costly electronics, may require separate insurance -- known as scheduled personal property insurance -- or be subject to a limit on payout for individual items. Many insurers limit payouts on these items at $2,000 if there's no additional coverage. Check with your agent.
- Your homeowners or renters insurance policy may cover you for either the cost of replacing lost or damaged property (replacement cost value), or just its current value, taking account of age and condition etc (actual cost value). Again, this is something you can decide in conjunction with your agent.
- If your personal property is lost or damaged when you're on a business trip, your homeowners or renters policies may or may not protect you. This is another issue you should discuss with your agent or insurance company.
- In addition to off-premises property losses, your renters or homeowners insurance may also cover you for liability for accidental injury or damage you cause to someone or something else while away from your home.
- When you travel, make sure you have your agent's phone number so you can make immediate contact if you do suffer some sort of loss or damage.
Don't just assume you have the off-premises insurance protection you need. Check your policy. If you're not absolutely sure about what's covered and what's not, even after reviewing your policy, you should definitely speak to your insurance agent before you travel.
You can also discuss any special concerns you have, for example about insuring high-value items, raising the limits on your off-premises insurance coverage or taking out umbrella insurance (which adds to your standard policy limits once they're exhausted).
In Bellmore and New York State generally, you can speak to the renters and homeowners insurance experts at Newbridge Coverage for clear explanations and answers to your questions and, if you wish, arrange the right level of off-premises insurance for your needs. Call us at: 516-781-9000
Knowing your property is well-protected both at home and away should make your vacation travel all the more enjoyable.