When you move into your first home or apartment, you might not have a lot to show for it. Over the months and years, however, it’s easy to accumulate many belongings, from furniture and home décor to clothes, dishes, and electronics. In fact, you may be surprised at just how much these items are worth and what it might cost you to replace them all at once. Fortunately, personal property coverage is available, and it is usually included in most homeowners, renters, and condo-owners insurance policies. As we kick off 2018, we here at Homewood Insurance Agency want to encourage our customers to take inventory of your belongings, review your existing personal property coverage, and contact us if you feel there are improvements to be made.
Take Inventory of Your Home
Whether you own or rent, you need a home inventory to account for all of the things you own. An inventory is an itemized list of possessions, from the lemon zester in your kitchen to the giant flat screen TV in your living room. It is a task that may seem daunting at first but is quite simple with the right tools.
The Insurance Information Institute suggests using an app that can assist you with the inventory process. Storing your information in an app is safer than keeping it on a hard copy inside your home where it could otherwise be destroyed along with your belongings. As you start listing items, choose a room in your house, and do not move onto the next room until you have listed each item. Be sure to open every drawer and cabinet so as not to miss anything.
As you work your way through your home, garage, and other storage areas, take time to snap pictures, write down serial numbers, and even make copies of purchase receipts. It may help to have these on hand to substantiate your claim in the event of a fire, theft, or other loss. Finally, schedule times throughout the year to quickly review your inventory and make important changes or updates. This is especially important around birthdays and the holiday season when big purchases are most common.
Review Your Coverage
Once you have an inventory of your home, start calculating the value of your items, and compare the results with your existing coverage. Personal belongings protection is typically found under Coverage C in a standard homeowner’s insurance policy. Insurance companies typically provide this coverage by default in an amount equal to 50 percent of the total structural coverage (Coverage A). Renters and condo-owners insurance also provide this important protection, although it may be up to you to select your own limits.
Actual Cash Value vs. Replacement Value
If you have a standard insurance policy, your personal belongings coverage probably covers the depreciated, actual cash value of your belongings minus your deductible. That means you could be out of pocket hundreds of dollars to replace your three-year-old sofa with a new one. Here at Homewood Insurance Agency, we recommend minimizing your out-of-pocket costs by adding a replacement endorsement to your coverage. This helps ensure the insurance company compensates you for the full cost of replacing your damaged or stolen items with brand new ones.
Special Coverage Limits
You should also take a look at the special coverage limitations in your policy. These are smaller caps on coverage for certain classes of items, such as cash, jewelry, equipment, watercraft, and firearms. If you and your spouse have an expensive set of wedding bands, for example, a $1,500 limit on jewelry might not be enough to compensate you for their loss. Instead, you may need to talk with an agent about adding scheduled coverage for expensive items to your policy.
For more information about how we here at Homewood Insurance Agency can improve or upgrade your personal belongings coverage for 2018, contact our office today.