Is my bicycle covered under my homeowners insurance policy?
UPDATED: Oct 1, 2012
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Asked October 1, 2012
A typical homeowners insurance policy includes coverage for personal property, including sports equipment such as a bicycle. The same is true for all types of home insurance, whether you have renters insurance, condo insurance, or regular homeowners coverage. However, the amount of personal property coverage you have is relative to the value of your home, and is often insufficient to cover a total loss. Other policies have per-item limits on personal property and your expensive bike may exceed that amount.
For items with an unusually high value such as a professional mountain bike, you may be better protected to purchase a rider policy, sometimes called a floater. This type of policy is purchased for a specific piece of property and is matched with the cost of the item when the policy is purchased. The rider is then added into your home insurance policy and both payments are made in your regular premium payment.
Another thing you need to be careful of where personal property is concerned is the amount of your deductible. If you have a high deductible, it may not be cost-effective to use your home insurance to pay for replacing it. You should compare the cost of paying for the replacement or repair out of pocket with what the deductible will cost, and if the two amounts are nearly the same, it may be best to simply pay out of pocket than to have the claim filed against your CLUE report, resulting in possibly higher premiums at a later date.
Similarly, if your home insurance policy pays actual value, you may find that you still have to pay for a large portion of the bike out of pocket. To avoid this, make certain that your policy is written for full replacement cost, because that type of coverage will fully replace lost or damaged items regardless of their age or condition. Replacement value insurance will cost a little more than cash value coverage, but it will give you more protection, both for your home and your personal property.
Answered October 1, 2012 by Anonymous