What is contingency personal good?
Unregistered personal property is a term used in the Home Insurance sector which refers to personal property which is insured under a policy without being individually listed in a separate section, or “appendix”, of the insurance contract.
Typically, unexpected personal property consists of relatively low value items such as clothing, jewelry, and electronics. Insurance contracts will generally insure up to a certain total amount of these items without requiring each to be separately identified.
Key points to remember
- Unscheduled personal property consists of assets that are insured under a property insurance policy.
- They are generally low value objects and do not require individual expertise.
- Assets that are more valuable must be valued separately and described in annexes added to the insurance contract.
Understanding unexpected personal assets
Unscheduled personal property insurance tends to cover items whose value is not high enough to warrant separate insurance. Below home insurance Where Tenant insurance, for example, clothing, jewelry, common sports equipment, kitchen appliances, furniture, and cameras and other small electronics are generally considered contingency personal property. In the event of a fire or other catastrophic loss covered by the policy, the policyholder simply adds all these unforeseen items, estimates their total value, and submits them for compensation. This saves the policyholder and the insurance company from having to assess each individual item separately.
Insurance companies generally place limits on the amount of coverage that applies to specific types of contingencies. A policy might cover $5,000 of contingencies, for example, but have limits of up to $750 for clothing, $1,000 for jewelry, and $2,000 for lost or damaged cash. Similarly, unexpected personal property may be subject to franchiseeither for specific types of goods or for their combined amount.
Property insurance often involves a mix of scheduled and unscheduled goods. A policy might have $5,000 coverage for unexpected property, for example, plus additional coverage for higher value items, such as fine art or precious metals— disclosed in one or more annexes. These special items should be separately rated to establish their monetary value. A floating insurance contract would be added as rider property insurance which should specify the value of each item and whether it can be replaced by its actual cash value, value of the agreed amountor if equivalent assets should be found.
Because an item’s actual cash value takes depreciation into account, the actual cash value is usually less than an agreed value, but it’s also less expensive coverage.
Example of contingency personal property
Michael recently moved to a new town. After moving his belongings to his new apartment, he decides to take out insurance to protect himself against the risk of theft, fire and other potential threats. His property consists of clothes, furniture, electronics, and a family heirloom given to him by his grandmother.
Michael determines the value of his clothes, furniture and electronics to be around $5,000. Researching his insurance options, he determines that these items can be easily covered as contingency personal property. This means that he could claim up to a certain amount of total losses from that combination of assets as long as the losses from each type of asset are less than the maximum coverage level for that type.
However, in order to secure his family legacy, Michael must have it appraised. To his surprise, he discovers that the inheritance is worth much more than he expected. For this reason, the inheritance is insured separately rather than being included with his personal contingencies. The description and estimated value of the inheritance are therefore included in a separate appendix to his insurance contract.