Insuring Your Most Cherished Possessions With Personal Property Coverage

Insuring your home is essential to protecting yourself from a devastating financial loss. And while your home is likely your greatest asset, the items in your home—your personal property—are likely your most cherished possessions. Protecting your possessions from loss is both financially and emotionally important. How can you make sure that you have the right amount of coverage for your belongings? You must take great care in deciding how much personal property coverage you need.

Protecting My Cherished Possessions: How Much Coverage Do I Need?

Perhaps because the value of the physical structure of your home is easier to quantify, and perhaps because it represents the most significant financial loss, most people place the greatest emphasis on their dwelling coverage when purchasing a homeowners insurance policy. Deciding how much to insure your home for is one of the most important insurance decisions you can make. But you also can’t overlook the amount of coverage you need to properly protect what is inside of your home, or your personal property coverage.

The sheer number of items within your home, and how much emotional value you place on many of them, may make it seem extremely difficult to quantify the value of your personal property. Some circumstances simply can’t be avoided, and the time may come where you lose some of those cherished possessions to a fire or some other disaster. Having the right amount of coverage for the contents of your home is probably the only way to impact how completely you can rebuild your life after a disaster.

What is Personal Property Coverage?

Home insurance policies provide personal property coverage for loss or damage to your personal belongings including clothing, furniture, appliances, and most other items in your home—giving you the ability to at least achieve some financial reimbursement for those items that may seem irreplaceable. Most homeowners policies start coverage for your personal property at approximately 50% to 70% of the amount of insurance you have on the structure of your home, and in many cases this may not be enough.

The best way to determine if you need more personal property coverage than what is provided in your basic home insurance policy is to prepare a personal property inventory, or a detailed list of everything you own and how much each item would cost to replace.

Insurance companies typically group like items into categories and assign coverage limits for those categories. For example, your homeowners insurance policy might limit jewelry coverage to $1,000 per piece of jewelry and $2,500 for all of the jewelry in the household. If you have a piece of jewelry that is worth $5,000, the basic coverage provided in your policy is inadequate.

There are two ways to increase the coverage limits for your special, high-value possessions. First, you can increase the “special limits of liability” for the categories in which you have more valuable items. In the example above, it would be wise to increase the entire jewelry category limit from $2,500 to $5,000 or more. Most insurers will increase the limit on any category of covered items in $1,000 increments, but there will likely be a ceiling to which you can raise those category limits.

If increasing the special limits of liability doesn’t seem to be the right way to get adequate protection for your belongings, you can use a scheduled personal property rider to increase the coverage limit on a certain item or items. This is also advantageous because these riders provide all-risk coverage, which means that the scheduled items are covered for “all risks,” not just the basic “covered perils” outlined in the main homeowners policy. Another advantage: scheduled personal property is typically not subject to the deductible that applies to all other losses.

Replacement Cost Vs. Actual Cash Value

Like the dwelling coverage in your homeowners policy, your personal property coverage can be based on your property’s actual cash value or replacement cost. Actual cash value policies pay to replace your possessions minus a deduction for depreciation. Replacement cost policies reimburse you for the actual cost of replacing the items with no deduction for depreciation. Replacement cost policies offer the best protection and ensure that you will be able to replace your cherished possessions with similar ones at today’s prices. This type of coverage generally costs about 10% more than actual cash value coverage, but it is worth the investment in the event of a loss.

Do you have a significant amount of personal property, a few valuable pieces of jewelry or art, or simply a house full of cherished, beloved possessions? Finding the right amount of personal property coverage is essential in all of these situations. We can help you determine how to approach coverage for your valuable items to ensure that you can be whole again after a loss. Call us today to understand your options and learn more about the importance of homeowners insurance and personal property protection.


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