It is pretty easy to determine how much coverage one should buy for their home because generally, it is all about the value of the structure. Determining how much coverage you need for personal belongings is a little difficult. Valuation is needed in order to get an accurate figure.
Many insurance companies peg the amount of personal property insurance on a percentage of one’s home insurance. This is usually between 50% and 75%, meaning if your personal property insurance is worth $200,000, your insurance company will cover your personal property for a maximum of $150,000 regardless of whether the total value of your property is more than this amount or not.
If you have priced items in your possessions, you should make an inventory, where you record everything you own. Insurance companies advice doing this room by room. Alongside each item on the list, put the model, manufacturer, serial number, cost, date of purchase and if available, receipts and warranties. For unique items, give a detailed description. Take close-up photos as well as full-room views of each item. It is a demanding procedure but it does pay off should you file a claim. Alternatively, you can hire the services of a professional inventory company.
The inventory will help you determine the actual value of all your belongings and the estimated replacement cost of them all.
In most cases , you will have to purchase additional coverage in the form of a rider because insurers put limits to how much they can compensate for personal property. This happens where the items are priceless and expensive. Below are examples of such items (the limit amount is indicated next to the item):
- Jewelry - $1,000 - $3,000
Silverware - $1,000 - $3,000
Guns - $1,000 - $3,000
Business Personal Property - $1,000 - $2,500
Sports and Stamps Collections - $1,000 - $2,500
Cash - $200 - $500
If you have expensive furniture, electronics and household appliances, it is advisable to purchase additional coverage in order to ensure their security. Buy enough coverage to guarantee a replacement should they be stolen or get razed by a fire.
It may seem like a lot of money to spend on insurance but it is worth it. It will protect you from potential loss of everything you own. Replacing uninsured household goods is almost impossible without some form of loan. Think of the peace of mind you will enjoy knowing that your possessions are well protected. It is priceless.