If you are a current homeowner or are searching for a new home, you know that homeowners insurance is a must in order to protect your investment. However, insurance policies can be confusing and you may not understand all the components. One part is called personal property coverage , this is the part of your homeowner’s insurance that covers your personal belongings – the contents in your home. Here are a few tips to make sure that you have the right coverage for your personal possessions.
1. Know what you have before you need to make a claim – a video inventory is a great way to have a thorough list of your household goods
2. Keep your receipts (especially of large purchases)
3. Understand the types of coverage (actual cash value or replacement costs) and how it works best for you
4. Add luxury items like jewelry or coins to the appropriate schedules or endorsements
5. Know what items may be excluded or covered under other policies (don’t make assumptions)
While you hope that nothing happens to your home, it is best to prepare ahead of time for possible loss or damage. That includes keeping a property inventory and having information on the cost of your items readily available and also stored in a safe place. Many agents recommend that you carry replacement cost coverage – while certain items may depreciate in value once they are purchased, the cost to buy the item new may be greater than what you originally paid for it or the depreciated costs.
You may own antiques, jewelry or art that is not covered under your basic policy (or has limits to the coverage). Typically you will need to obtain a certified appraisal for luxury or collector’s items and then carry special coverage through an additional endorsement to your existing policy.
Be sure to review your policy througly and don’t make assumptions that everything you own is covered. A good agent can help you understand the policy limitations and exclusions so that you are not caught with your belongings uninsured or underinsured. You may pay a little extra on your annual premiums, but good coverage makes for a good night’s sleep!