Determining the amount of personal property insurance you need presents a challenge if you’ve lived in your home for many years and never considered it. First-time buyers might notice it’s less of a challenge as most of their belongings are new, and they’re able to start fresh and correctly from the beginnings. Home and contents insurance is the most important purchase any new homeowner makes aside from purchasing their new home. It’s financial protection for the homeowner. It allows homeowners to repair or replace their home in case of disaster, and it allows homeowners to replace any personal belongings lost, destroyed, or stolen in a disaster or robbery.
It’s imperative homeowners looking for a home and contents insurance policy understand precisely the dollar amount of their belongings. Assuming the value isn’t enough, and not taking the time to understand personal property coverage limits is devastating when the mistake is realized too late. Now is the time to sit down and figure out the value of all your personal belongings, what your home and content insurance covers, and make any changes necessary.
Your home and contents insurance by Youi policy probably covers personal property worth approximately 50% of the cost of your home. It’s the standard policy amount for most insurance companies. If your home is worth $500,000, you might feel confident in personal property protection up to $250,000. However, there are additional limits in place. Many insurance policies with standard coverage only cover specific items to a certain dollar amount. While your entire personal property coverage on your home and contents insurance policy might cover you to a quarter million dollars, it might include stipulations that only cover jewelry up to $2,500.
Homeowners with valuable jewels aren’t going to see any benefit to a policy like this one, and changing the policy is a must. It does increase the cost of home and contents insurance to add a policy for additional coverage for specific items, but that cost is insignificant compared to the cost of replacing expensive items out-of-pocket when insurance limits the payout.
Estimating Personal Property Value
Whether you already have a home and contents insurance policy or you’re shopping for one now that you have a new home, it’s time to estimate the value of your personal property. Guessing isn’t the most accurate manner of doing this. It’s time-consuming, but the process is worth it. It’s going to entail the following:
– Checklist of all personal items
– Notation of exceptionally valuable items
– Cost of each item you own
– Date of purchase of each item you own
– Receipts for all items you own
Challenges occur when you’ve lived in your home for a while and find you haven’t receipts for electronics, furniture, and other items you’ve purchased throughout the years. You’ll just do your best to estimate the price of these items. Start with a pen and paper, and go through your home writing down everything. You don’t have to write down every photo frame, every pen and every knick-knack. Inexpensive items such as holiday décor and little things of that nature can be estimated.
It’s the expensive items you should be concerned with. Write down the size, type, brand, and serial numbers of all electronics. Write down the serial numbers, designers, and names of each high-end handbag or pair of shoes you own. The same goes for designer clothes. While a dress from the local department store you paid $30 for won’t increase in value, a Gucci dress either won’t lose its value or could increase as it closes in on becoming a vintage piece.
Note your jewels, your furniture, artwork, antiques, designer dishes and furniture, and anything else of exceptional value. You’ll want to note your outdoor equipment and appliances, too. They’re expensive and worth a substantial amount of money, and you’ll want your home and contents insurance to cover these items.
If you have receipts, include them with the inventory list you’ve accumulated. Take photos of each item and keep them with your inventory list. Place all of these in a safe location, such as on a secure web portal, a fireproof safe, or your bank’s safety deposit box. They’ll help significantly in case of an emergency.
Once you have an inventory list of all the things you own in your home, you should adequately estimate the cost of each. The total might just surprise you. Years of making purchases might not seem expensive as you make them, but they add up quite fast.
If your current home and contents insurance policy doesn’t cover the cost of your personal property, call to make changes. You can shop around for a new home and contents insurance policy to find better rates, or to find better coverage. Knowing your home and contents insurance is up-to-date and accurate in terms of your home’s value and the value of your personal property is priceless when disaster strikes.