Are you making headway on your 2018 resolutions yet? January is in full swing, and we here at Stauffer-Klug Insurance hope you will kick off the New Year with a commitment to review your personal property coverage. This coverage is often overshadowed by coverage for the structure of the home, but the contents inside it are important, too. In fact, it could cost you tens of thousands of dollars or more to start over again after losing everything in a fire or other disaster. In this post, you’ll learn how to determine if you have enough coverage to protect your belongings and what you can do if you don’t.
Understanding Personal Property Coverage
You probably have personal property coverage if you have renters, homeowners, or condo-owners insurance. You may have chosen your own coverage limit, or you may have a default coverage limit set in place by the insurer. The latter is typically true of the personal property limits on standard homeowners insurance policies, which are generally set to 75 percent of the structural coverage limits found in Coverage A.
In addition to the overall coverage limit for your personal belongings, there are also smaller limits applicable to special categories of items, such as watercraft, firearms, jewelry, and other high-value possessions. For example, you may be limited to $1,500 of coverage for the theft of your jewelry, which may not even be enough to cover your wedding rings. In these cases, it is recommended that you add scheduled coverage for expensive items to your policy to ensure they are protected against loss.
Like other types of coverage, personal property insurance is subject to a deductible of your choosing. This is the amount you pay out of pocket toward the value of your loss. Also, insurance companies can value your loss in one of two ways. The first way is known as actual cash value or ACV. This is the coverage that comes standard on most policies and only provides coverage for the depreciated value of your items. That means you’ll be paying the difference yourself if you want to replace your items with new ones. The other type of valuation is replacement value. If you have a replacement value endorsement added to your policy, you enjoy reimbursement for the full cost of brand new replacement items of comparable value.
Take a Home Inventory
You can only determine your coverage needs if you know how much your belongings are worth. We recommend going through your home room-by-room to record each item you own and its value. Be sure to back up your inventory with as much documentation as possible, including serial numbers, receipts, and photos of your items. Then, sort the belongings into categories for easy reference.
The Insurance Information Institute recommends keeping your inventory in an app or stored online where you can easily access it in the future. This will make it easier to update your inventory, determine your coverage needs, and report your losses after a covered event.
If you need to upgrade your personal belongings coverage or add a replacement endorsement to your policy, contact our office to speak with an independent agent today.