There’s a comfort that comes with knowing you have all the insurance you need to weather life’s storms. The most effective way of staying on top of your coverage is reviewing your policies from time to time and making changes as necessary. This month, for example, is prime time to take a glance at your personal property coverage – especially if you added lots of expensive new items to your household over the holiday season. Continue reading to learn how you can better assess your actual contents coverage needs and what you can do to better protect the things you own in the year ahead.
Take Inventory of Your Home
When it comes to personal property coverage, the number one thing recommended by most insurance professionals is a home inventory. This is a valuable tool that helps you calculate your coverage needs and also provides documentation when you need to file a claim. If you do not have a home inventory, now is the time to create one. If you already have one, January is still a good time to update it.
To get started, the Insurance Information Institute recommends downloading an app that stores your inventory safely online. Alternatively, you could create a cloud-based document or write down your items on paper and store them in a safe, fireproof location.
Because this task can feel overwhelming if you have a lot of possessions, we recommend taking it in ‘small bites.’ In other words, choose a room in your house, and start listing all of your belongings in that room alone. Be sure to look under beds, open cabinets, and peer through drawers. Then, work your way to the next room and the next until you have documented all of the items in your home. You should also include items in your car, storage room, attic, basement, and garage, as personal property coverage extends outside the walls of your home.
Lastly, find ways to prove ownership of the items in your inventory. You might start with a video walk-through of your house or a collection of photos of the items you own. It also helps to pull up purchase receipts, appraisals, serial numbers, credit card statements, and anything else pertaining to the valuation of your belongings.
Review Your Coverage
With the hard part behind you, it is now time to review your personal property coverage and compare it to your inventory of items. If you have a standard homeowners insurance policy, chances are your default coverage (usually 50 percent of your Coverage A structural limit) is adequate to meet your total coverage needs. However, a closer look may reveal the need for scheduled coverage for certain types of items like jewelry and silverware. Known as ‘special coverages,’ the smaller coverage caps for these categories are often just a few hundred dollars. We here at Frydach Insurance can help you assess your special coverage needs and increase protection specifically for those items.
Next, take a look at your policy’s terms on valuation. This is the way in which your insurance company will assess your loss. If you have standard coverage, your policy probably covers the actual cash value of your items, which reduces your settlement to account for depreciation. Combined with the deductible you have already agreed to pay out-of-pocket toward your claim, having actual cash value can significantly increase your financial burden when you begin shopping for new items after a loss.
Instead, we here at Frydach Insurance recommend increasing the quality of your coverage by adding a replacement value endorsement to your policy. This endorsement helps ensure you are compensated for the full replacement value of new items, allowing you to start over again completely anew.
To find out more about how you can improve your personal property insurance coverage for 2018, contact our office today.