Home insurance is something most people think of when they buy a house. Most likely, this is because lenders require home insurance on homes that are being mortgaged.
Personal property insurance however, is often forgotten -until it is too late.
While most home insurance policies do provide some coverage for belongings, most basic homeowner’s policies will only reimburse for part of what was originally paid for the belongings. This is because most homeowner’s policies reimburse belongings based on “actual cash value.” Actual cash value takes depreciation into account, meaning what you paid for your belongings years ago, may not be their market value today.
To ensure that your valuables are insured under a more comprehensive policy, you may consider taking out additional insurance specifically designed to cover your personal property.
Here are a few things to consider when looking for a policy to cover your personal belongings.
Your Property’s Value
Each insurance agency is different, but most have categories in which you can insure your property. Your personal property usually consists of things like furniture, clothing and appliances. High value items, such as jewelry and firearms are usually insured under their own separate policies.
High Value Items
Since policies usually have a per-item limit on the coverage provided in each category, high value items may need extra coverage. It’s a good idea to have your high value items appraised, this allows you to know whether or not you need to purchase additional coverage.
What Isn’t Covered
Make sure your policy is comprehensive enough. Generally, personal property insurance policies do not provide coverage in the event of certain natural disasters; such as earthquakes or flooding that is due to a hurricane. Be sure to ask your insurer about this additional insurance if you are interested in it.
Replacement Cost Value
Consider “replacement cost value” coverage. Replacement cost value means that amount of reimbursement you will receive for your damaged belongings, is based on the cost of replacing these items new -no depreciation is taken into account. While this coverage costs more, it also means that you will receive more if your items are destroyed.
If you have questions regarding your policy, be sure to talk with your insurance agent. We can help you to ensure your house and belongings are covered.