HOME & PROPERTY

Condominium Insurance Coverage Limits

Like all homeowners policies, unit owner policies have maximum limits the company will pay for loss to specified types of property (these limits can vary among companies). It's important to understand these limits and how they apply.

Something to Keep in Mind

Coverage for certain types of property has a dollar limit. Here is a typical list of the types of property that may have "special limits" in a condominium unitowners policy:

  • Money, bank notes, coins
  • Business property
  • Watercraft including trailers, furnishings, and equipment
  • Trailers (other than boat trailers)
  • Firearms (applies to theft only)
  • Silverware and goldware (applies to theft only)
  • Computers and data processing equipment
  • Rugs, tapestries (theft only)

Limits are applied because it's the fairest to all policyholders.

An example: Since most people don't own a yacht, it would be unfair to increase everyone's premium to cover the losses of the few who own yachts. Likewise, it would be unfair to force everyone to share in the losses of people with expensive collections such as firearms or silverware.

If you need higher limits for certain types of property, your State Farm® agent can help.

The Difference Between Replacement Cost Coverage and Actual Cash Value

Historically, most homeowners policies have covered personal property on an actual cash value basis: current replacement cost less depreciation.

For example, your five-year-old sofa is destroyed by fire and would cost $1,000 to replace. You might expect to receive about $500, based upon 50 percent depreciation. (The condition of your sofa would affect the insurance payment.)

Today, however, most insurers offer a replacement cost provision for condominium and other forms of homeowners protection. This allows your destroyed property to be replaced without deduction for depreciation. Of course, this may cost more and your deductible would still apply to the loss.

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