And anyone who’s ever suffered the loss of their home knows that the costs of replacing a home’s contents can be surprisingly high – making it well worthwhile to invest in quality personal property coverage as part of your homeowners policy.
How does personal property coverage work with homeowners insurance?
A standard homeowners insurance policy will include personal property coverage set at a specific limit – usually between 20% and 50% of the coverage limit for your home.
You can increase beyond the standard coverage limit, if you’re willing to pay a little higher premium.
Coverage will be limited to things typically located inside of your home, like furniture, appliances, fancy China, electronics, and expensive jewelry. However, the item does not have to be physically inside the house when it’s damaged, destroyed, or stolen to be covered.
The cause of the loss, however, can determine whether or not your personal property is covered. But it depends on the policy type. Some policies go on an “named peril” basis, which means that only named perils count for coverage purposes. Other policies use the “open peril” system, which covers it unless the cause of loss is explicitly excluded.
Finally, check out whether your policy reimburses you based on actual cash value, which takes account of depreciation, or replacement cost, which gets you a brand new replacement item paid for in full.
Using Scheduled Personal Property For Additional Coverage
There’s not only a total overall limit for your personal property coverage in your homeowners insurance, but there are normally also separate limits for specific types of property, category by category.
Beyond the category limit, you’ll have to pay out of pocket. You can work with your insurer on customizing the limits to fit your needs, of course. And you can take inventory of all the property you want insured and get estimates of each item’s actual and replacement value, to help you know how to arrange your policy.
But the major problem comes in with certain high value items that insurance companies typically don’t reimburse in full on their standard homeowners policies. Jewelry coverage, for example, is often in this category.
So to boost your jewelry cover, you would have to add extra coverage using what’s called “scheduled personal property”. If your policy only cover jewelry up to $2,000 but you have $8,000 worth of jewelry, you could simply raise the limit if you’re willing to pay the higher premiums.
Being Ready In Case You Need To File A Claim
Insurance is one of the few products you hope you’ll never have to use. But you have to be prepared just in case.
Taking a full, detailed inventory of your covered personal property at home, complete with pictures, dates, and estimated values will greatly facilitate filing a claim. But don’t store your inventory information at home where, say, a fire would destroy it.
And always call your insurer to update if you do away with covered possessions or acquire new ones you want covered.
To learn more about personal property cover and other aspects of homeowners insurance, contact Flagler County (FL) Insurance Agency today!