As you review your New Year’s budgets and goals, it is also a good time to take a glance at your personal property insurance to assure it is still holding up to your needs. If you finally got the new hunting rifle you’ve been wanting for Christmas or perhaps added diamond earrings to your jewelry collection, it’s possible that your insurance comes up short of covering them. Continue reading to learn how you can assess your coverage needs and work with an independent agent to bring your policy up to speed for 2018.
The inside of your home is probably filled with contents you have acquired over many years. If your house is burglarized or your apartment burns down, you’ll need personal belongings coverage to help you recover the loss of things like furniture, small appliances, curtains, rugs, electronics, apparel, and more.
If you have a standard homeowners insurance policy, it likely comes with default personal belongings limits (Coverage C) equal to 50 percent of your structural limits (Coverage A). However, this may not be enough to meet your needs. Not to mention, a renters or condo-owners insurance policy typically comes with no default limits at all. Instead, you’ll need to come up with your coverage needs own – something that requires careful assessment of the value of your belongings.
A home inventory makes it easy to fill in your coverage gaps and also list your losses should you ever need to file a claim. The Insurance Information Institute offers advice for conducting a home inventory. It suggests starting with a room-by-room analysis and then sorting items by category. Take pictures of your belongings, as well as their serial numbers. If you have the purchase receipts for large items, keep those on-hand as well.
Once you have sorted items by category, take a look at the Personal Belongings coverage limits in your policy. Often, there are smaller, subsidiary limits applicable to specific categories of items. These ‘special coverage’ sections limit the amount of coverage available to things like firearms, precious metals, cash, securities, watercraft, and other items you may own. If the value of your belongings exceeds the special coverage limits, talk to an agent here at Smart Move Insurance about scheduling additional coverage in your policy.
Though we hope you never need to file a claim against your personal belongings coverage, it is important to understand what you can expect should disaster ever strike. First, the insurance company will assess the value of your loss based on either the actual cash value or the replacement value of your belongings.
Most standard policies cover the actual cash value by default, with replacement value protection available in the form of an endorsement. If you stick with actual cash value coverage, you will only be reimbursed based on the depreciated value of your items. That could result in bigger out-of-pocket expenses if you need to replace all of the items in your home. With replacement value coverage, you instead receive compensation for the cost to purchase your items brand new.
Finally, your claim will be subject to a deductible. This is the amount you choose to pay out-of-pocket toward your total loss in the event of a claim.
To find out how you can improve the quality and limits of your personal belongings coverage for 2018, contact our office today.