When something bad happens, that sinking feeling in your chest can be the result of worry and anxiety. Imagine how you would feel if you came home to find that your house had been burglarized. Your big screen TV, the surround sound system, and a few other things are gone. Fortunately, over time the feeling will subside, and knowing that your homeowners insurance will help replace your personal property certainly helps.
Personal property coverage is typically included as part of your homeowners’ insurance policy or renters insurance policy. Otherwise known as “Coverage C,” this insurance is specifically intended to insure your personal belongings. That could include, but is not limited to, electronics, appliances, furniture, jewelry, clothing, sporting equipment and more. Additionally, if you’ve borrowed the property of others, Coverage C could provide reimbursement should something happen to those items as well.
How Personal Property Coverage is Determined
The maximum amount of property coverage differs from company to company, and policy to policy. The amount of coverage that is typically included is equal to a percentage of the value of your dwelling. The amount of coverage included is generally 50 percent of what you have your home insured for. If your home has a high value, the maximum amount of coverage eligible for reimbursement is understandably higher than if your home is more humble. For example, if you have a home insured for $800,000, your coverage would be $400,000. If your home was insurance for $200,000, you’d have $100,000 of personal property coverage.
While you might think that $400,000 or $100,000 would be plenty of coverage, you’d be surprised how quickly things add up. Additionally, if you have a lot of pricey stuff in a small house, you may want to consider a higher limit. With some policies, the amount of personal property coverage could include as much as 75-percent of the value of a home. The amount of additional coverage you can get in relation to your home’s value is subject to your individual situation and the policy options that are offered through your insurance company. With that said, most of the policies we sell at Reis Insurance include 75% coverage.
How Much Is Your Stuff Worth?
It might seem like a tiresome task, but the best way to establish the value of your belongings is to create an inventory all the objects in your home that qualify for personal property insurance coverage. Keeping receipts for new items, and snapping photos of expensive items could be worthwhile in the event of a claim. Insurance agents can assist you with calculating the value of your personal property and recommend the types and amounts of insurance you should have for adequate coverage.
Personal Property Insurance Covers More Than You Think
While it’s pretty safe to assume coverage in the case of a fire, vandalism, or tornado, there are other situations where you might not realize you have coverage as well. For example, if your luggage is stolen while you’re on vacation, you’re very likely covered for reimbursement – even if it happens when you’re in another country!
Your insurance policy can also cover other people’s property. For example, if a guest was staying at your house the night your were robbed, he or she could be reimbursed by your insurance company for any items that were stolen. Finally, it’s important to note that your policy may reimburse you differently based on whether the item was damaged, destroyed, lost or stolen.
Coverage C Limitations on Reimbursement
Though Coverage C is very valuable, it has some limitations that you should consider and possibly discuss with your agent. When you create your item inventory and itemize the value of your property, you should make sure that the maximum cap of the policy is appropriate. However, depending on what you have, you may find yourself running into reimbursement sub-limits for more valuable items, such as jewelry, fine art, firearms, gold, silver, cash and more. If items like this add up, you should consider scheduling this property.
Scheduling Personal Property
Scheduling personal property can help you protect items aren’t fully covered under your standard policy. This extra layer of protection for your scheduled items can be purchased in addition to your homeowners’ or renters’ policy. Its purpose is to insure your jewelry, art, firearms, and other high-value items. The relatively small added cost of scheduling personal property is well worth the coverage it provides.
Do yourself a favor and create an inventory of your personal property. Then give us a call to be sure you’re covered properly. We’ll be happy to provide you with advice and a personalized quote for your specific situation.