What are your resolutions for 2018? If you are hoping to get your financial house in better order, don’t overlook your insurance policies. Having the right coverage and limits can have a tremendous effect on your finances this year and beyond. In this post, we’ll spotlight personal property coverage, including how much you may need and what to expect if you need to file a claim.
Whether you rent or buy your home, chances are you have filled it with contents that need to be protected against a potential loss. It could cost you tens of thousands of dollars to replace your furniture, apparel, electronics, and other items after a devastating fire or burglary. If you own your home, your homeowner’s insurance probably already covers personal property – usually up to 50 percent of the limits in your structural coverage (Coverage A). However, you can increase your coverage if you feel these limits are too low to meet your needs.
If you rent your home or own a condo, your coverage is different from a homeowner’s. In these cases, policy-holders are typically required to select personal property coverage limits themselves with no default coverage starting point. To help you assess your personal property coverage needs, it may help to take inventory of your belongings as recommended by the Insurance Information Institute.
It may be easy to remember the big things in your home off the top of your head, but the small ones can quickly add up, too. From the paper towel holder to the hangers in your closet, an inventory of your belongings can help you track your coverage needs and speed along the claims process.
We here at the Don Neeley Agency acknowledge that initiating a first-time inventory can seem like a daunting task. However, it can serve as the basis from which you can quickly update your record of possessions as you get rid of old ones and acquire new ones from year to year. If you already have a home inventory, January is a great time to update it. If not, consider downloading an app or using a cloud-based software system to manage your inventory from anywhere in the world.
Items should be listed by category for easy reference. We recommend taking the project room-by-room, tackling individual concentrated areas at a time. Take note of serial numbers when applicable, and do not hesitate to snap a few photos for documentation. It may even help to keep copies of your purchase receipts if you have them.
The standard personal property coverage limit is typically broken down into a few smaller limits for certain types of high-value items. For example, you may be limited to a claim of no more than $200 cash or $1,500 for watercraft. Firearms, precious metals, and furs may also be subject to limitations. Talk to an agent here at the Don Neeley Agency to find out if you may need additional scheduled coverage for your high-value items.
You probably already know that claims for personal property loss are subject to your deductible. That is the amount you will be out-of-pocket in the event of a loss. However, you may not know that the compensation you receive may not be enough to replace all of the items you lost. That is because a typical standard insurance policy only covers belongings based on their depreciated value. Known as Actual Cash Value Coverage, it could mean you only receive $750 for the TV you bought for $1,200 last year. To remedy this situation, talk to an agent about adding replacement value coverage to your policy. This type of endorsement helps cover the cost of new items similar to the ones you lost.
To request a review of your personal property insurance coverage and limits, contact our office today.