- How do I determine whether or not I have enough coverage?
- In terms of personal property, what is covered? What isnâ€™t?
- What should I do if I have to file a claim?
- Have I made any large purchases lately?
Having answers to these key questions will give you peace of mind if the unthinkable should happen to your home:
- Do you have enough personal property insurance?
- Does Your Homeowners Policy Include Contents Insurance?
Your homeowners insurance policy comes with contents coverage based on the overall value of your personal property and up to approximately 50 to 70 percent of the amount of coverage on your homeâ€™s structure. For example, if you have coverage on a $200,000 house, your policy may include approximately $100,000 in personal property coverage.
However, if you have lived in the house for a few years and are a collector or have acquired valuables (such as diamond jewelry or a work of art), your basic homeowners insurance policy may not cover the replacement value of these items if they are destroyed or stolen. In this case, you may need to purchase a rider on your homeowners policy to cover these special items. Your Â Trusted Choice independent agents at Wade Insurance Agency Â can help to go over these items and the contents insurance needed to cover them.
Be sure to discuss coverage for all possessions of value, such as your new iPhone, furs, golf clubs and carts, computers, fine art, china, musical instruments or expensive sporting equipment. You may even want special coverage for that elkâ€™s head above the fireplace or other taxidermy.
Actual Cash Value vs. Replacement Cost
It is important to understand these terms and how they apply to your policy, especially when it comes to contents insurance. In the event that you have to file a claim due to fire or burglary, your independent agent can help you determine the most optimal fit to suit your needs.
Â â€œActual cash valueâ€ accounts for an itemâ€™s original cost minus depreciation. This type of coverage is standard.
â€œReplacement costâ€ refers to the actual cost of replacing a lost item. For example, the actual cash value for an older appliance may be $800, but the current cost of replacing your appliance may be $1,500. Thus you can potentially receive the amount of compensation needed to buy a replacement item at its current cost if you have this kind of home and contents insurance. Note that getting appraisals for very expensive items is an important step in making sure they will be covered in a loss.
Be sure to discuss these two options with your agent and decide which type of coverage is best for your needs. Replacement cost coverage will most likely cost about 10 percent more, but it may be well worth it, given how quickly some items depreciate in value.