Homeowners can feel a certain degree of security by purchasing homeowners insurance: In the event of a disaster, their possessions may be protected and their value reimbursed. But often, there are limits to personal property coverage that may be unclear. Here is a guide to some of the reasons why your valuables may not be fully covered — and how to avoid finding that out the hard way.

Your coverage may have an upper threshold
Certain categories of personal property coverage may have a threshold for insurance payouts on a single item. An example may be a $1,000 sublimit on accessories: Either the policy holder can claim $1,000 TOTAL for all accessories, or a single item lost can be $1,000. The way to avoiding this snap is by talking to your broker and raising your overall coverage ceiling. For particularly high-value items, you can "schedule" them to be covered at a higher appraised value for an additional fee.

Your policy may give an Actual Cash Value payout instead of Replacement Cost
Actual Cash Value and Replacement Costs are two different coverage models for personal property. Actual Cash Value, as the name suggests, reimburses a policy holder for the current market value of an item — taking into account factors like the value lost over time. This means that for something like a TV that is a few years old, the amount you get for a policy payout may be far less than what it costs for a top-of-the-line new television to replace it.

On the other hand, Replacement Cost policies take into account equivalent items and compensate you for the fair market value. Taking the same example of the TV, you'd be given an amount that is fair market value for a similar model TV.

If you have any questions about coverage or want to learn more about our low rates on home and auto insurance, contact Fundy Mutual today.