One of the questions we get is: “Why do I need to buy separate gun insurance? My Insurance agent told me guns are covered under my homeowner’s policy?”
Your agent is correct (partially). Specifically: For all perils insured against under a homeowner’s policy for Coverage C “unscheduled personal property” guns are covered under a “replacement cost” basis or an “actual cash value” basis. This coverage part covers guns up to the limit insured for under coverage C.
There is one very important exception. This pertains to the peril of theft. There is a section of all homeowner’s policies titled “special limits of liability for coverage C unscheduled personal property” that restrict the amounts payable under the policy for the peril of theft. The types of personal property affected are those items that burglars or thieves target. These items include: guns, cash, precious metals or coins, stamps, fine arts, jewelry, furs, gold ware and others. Most policies limit coverage for the theft of guns between a limit of $1,500 and $5,000 TOTAL (not for each gun).
Another reason we feel that guns should be insured under a separate policy (other than homeowners) deals with insurability and privacy. Some insurers are becoming “gun shy” (no pun intended) on the issue of guns on a homeowner’s policy. Not so much regarding the guns themselves (values of guns). They are becoming increasingly nervous of homeowner’s liability for both gun use and potential gun loss (theft of guns).
Liability lawsuits (all homeowner’s policies include liability insurance as well as property insurance) targeting gun owners who have had guns (particular handguns) stolen from them are on the rise. Allegations of “failure to protect the public” or “negligent storage” or variations thereof are cropping up when a stolen firearm is used in a violent crime. Defense is provided under a homeowner’s policy without limit as well. Accordingly, this type of loss under a homeowner’s policy, may result in a cancellation or non-renewal of the homeowner’s policy. Therefore, why not carve the guns off the homeowner’s policy and alleviate this scenario.
Another important reason is coverage and cost. Most homeowner’s policies charge between $1.50 to $1.80 per $100 in gun value. Our rate is approximately 1/6 of that amount. Our coverage format is broader as well and is addressed in other questions.