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5 Common Limitations of a Homeowners policy


Do you know the limitations of your homeowners insurance policy? Make sure you look into these NOW, instead of finding out the hard way - after a claim is filed.


Think your homeowners policy covers all of your jewelry? Think again! Most policies place strict limits on jewelry coverage - usually $1,500 per item, with a cap of $2,500. Other common limitations are on silverware, firearms, coins, furs, and money. For additional limits on any of these items, a 'rider' must be purchased.


Do you live in a flood plane? Not sure? Floods aern't covered by an ordinary homeowners insurance policy. Flood insurance is available through the National Flood Insurance Program, which is part of FEMA. The average flood policy costs about $650 per year.

Water Backup

Do you have a sump pump in your home/apartment? If your sump pump ever fails due to power outage or battery backup not working, you could find yourself with a flooded basement and ZERO coverage! Even if you don't have a sump pump, you still need an endorsement for "backup of sewer or drain" if you'd like that coverage.The endorsement typically runs less than $10/mo. Make sure you have it!

Actual Cash Value vs. Replacement Cost

Do you know which one your policy covers? You can choose to insure your home for either Replacement Cost (RC) or Actual Cash Value (ACV). Replacement Cost is the cost to rebuild (or repair) your home using materials of "like" kind and quality. Conversely, Actual Cash Value is the value of your home with factoring in age, depreciation, and wear & tear. ACV will pay the Replacement Cost MINUS the depreciation. We always recommend a Replacement Cost policy.

Ordinance-and-law coverage

This rider is a must if your home is more than "a few" years old. It covers the cost of bringing your home into compliance with current building codes - and is often overlooked by many policy holders.

Bonus item: Home Business Coverage

This one may or may not apply to your situation, but you should be aware of the limitations regardless. Typically, there is a strict limit on coverage for business items (usually $2,500). For that reason, buying an inexpensive 'rider' is needed to fill the gap. Keep in mind, business liability coverage must be purchased separately as well.

Additional Information

Have questions? We're here to help. Call Kris @ 734-662-3100 extension 27 for more information.

Note: The information in this article is designed to be a general overview of the topic. None of the information provided is to be used as a baisis for buying insurance. As always, you should talk with your agent for specific information regarding these coverages before making a buying decision.


Proudly quoting you with

Kris Hall
Who am I?

My name is Kris Hall. For years I've been insuring families all over Michigan and I'd like the opportunity to do the same for you. We live in an increasingly litigious society and having adequate coverage is more important than ever. 

                                      I take pride in helping my clients understand what they're buying, not just how much it costs. Every client benefits from having multiple companies compete for their business. 


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My agency

Located in Ann Arbor, the Kleinschmidt Insurance Agency has been serving Michigan since 1926. For three generations we've taken pride in being the most experienced agency in Ann Arbor with a longstanding history of excellence. 

Contact & Location Information

450 South Maple Rd

Ann Arbor, MI 48103


Office: 734-662-3100 x25

Cell: 734-417-4274

Fax: 734-662-5379

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