Whether you are renting an apartment for the first time or have lived in your home for many years, you need personal property coverage to help protect the things you own. This coverage reimburses you for damage or loss to your furniture, electronics, and other belongings due to a covered event like fire or theft. If you are a homeowner, your insurer may pre-set your coverage to 50 percent of your total structural coverage. If you are a condo-owner or renter, you may need to select your own limits. To find out how much coverage you really need, we here at Pagel & Associates Insurance recommend creating or updating your home inventory. As we kick off a new year, there is no better time than now to get started.
Taking a Home Inventory
The simple act of listing your possessions can make filing a claim much easier. It can also help you add up your total coverage needs to ensure your personal property insurance is up to par. If you already have a home inventory, January is the time to update it with all those new ‘toys’ you may have received over the holiday season. If you don’t have a home inventory, we here at Pagel & Associates Insurance are challenging all our Green Bay area customers to put it on your list of to-dos as you begin tackling your resolutions for 2018.
To get started, the Insurance Information Institute suggests downloading an app or creating a cloud-based document for easy and safe reference in the event of a loss. Next, write down a list of everything you own, including items inside your home and the ones you may keep stored offsite. It may help to sort them categorically, especially for items like apparel, which may be easier to list by the number of shirts, jeans, shoes, etc. that you own. Then, validate your inventory by snapping photos or videoing the inside of your home. You should also write down serial numbers for expensive belongings, and take photos of purchase receipts you may have, too.
Understanding Your Personal Property Coverage
Like other types of personal insurance coverage, any claims you make against your personal property insurance will likely be subject to a deductible. Be sure to choose an amount you can afford to contribute toward your loss.
When you file a claim, the insurance company will consider two important things when determining how much to reimburse you. The first is whether your policy includes belongings coverage for actual cash value or replacement value. Most standard policies provide default coverage for the actual cash value of your items, which only compensates you for the depreciated value of your possessions. In other words, the couch that you paid $2,000 to purchase three years ago may now only be worth $700 in the eyes of the insurer. To minimize your out-of-pocket costs when you replace your items, consider adding a replacement value endorsement to your policy, which will cover the cost of replacing your lost, damaged, or stolen items with new ones.
The second factor in determining the amount you receive from the insurer is the special coverage caps for certain types of items you may own, such as precious metals and firearms. For example, if you have a wedding ring appraised at $4,000, your policy may limit protection for fine jewelry to just $1,500, leaving you with a major deficiency in your coverage. If you discover that your special coverage caps are too low to reimburse you for the loss of expensive items; talk to an independent agent at our office about scheduling additional protection in your policy.