Insuring your home means not only insuring your dwelling, but also the possessions that you have inside it. After all, they are at as much of a risk of being damaged by a hazardous event as the house itself.
As a foundational step to getting coverage, you must buy personal possessions insurance as part of your homeowners policy. However, what many people fail to realize is that standardized personal possessions coverage is often not adequate on its face to insure the full value of all their belongings. As a result, when getting coverage, it’s important to work with your home insurance agent to determine how best to expand upon your benefits.
All your possessions, including high-value items, can be insured under your homeowners policy, provided you purchase appropriately tailored benefits. Below, we’ve outlined some of the best steps you can take to ensure that your possessions have full insurance backing them up.
Understanding Possessions Insurance
Primarily, your home insurance is designed to protect your property and financial liabilities against the ramification of unexpected and unavoidable accidents in your home. Second only to your dwelling insurance, your possessions coverage is one of the most critical types of benefits to have in your plan.
Various perils could strike your home at any time, including fires, severe weather and thieves. Whenever these problems beckon, your possessions could sustain damage. It is your possessions coverage that will help you repair or replace these belongings.
When selecting your homeowners policy, you will set a limit on the maximum amount of money that your plan will pay you for a given claim. However, you must pay attention to your plan itself, as various policies will include further limitations on how your coverage will apply.
- Possessions insurance will include deductibles, which are amounts of money you agree to pay for a claim cost yourself, rather than obligating your insurer to pay. So, suppose you have a $500 possessions deductible, and you file a claim for $1,200 worth of possessions damage following a storm. In this case, your plan will only pay you $700, since you agreed to have $500 deducted from your settlement as part of your deal.
- Certain possessions might be totally excluded from coverage under your policies. Additionally, your plan will exclude certain causes of possessions losses from coverage, notably wear & tear, loss and neglect of these items.
- Some high-value items will be subject to sub-limits beyond those of your maximum coverage limits. For example, policies will frequently limit coverage for jewelry, collectibles or similar items to a few hundred dollars, regardless of the actual value of these items.
- Many policies will only pay for damaged items based on the actual cash value (ACV) of these items. These are items’ used values at the time of losses, rather than their like-new values.
Where does this leaves you when it comes to insuring your specific possessions? At minimum, it is a clear indicator that you will need to stake some additional steps to properly insure possessions through expanded benefits.
Increasing Your Personal Possessions Insurance
Homeowners have multiple incentives at their service to help them expand their possessions coverage. Each of these benefits are different, but they can each work to your advantage depending on what goals you have for your coverage.
Consider adding the following to your policy:
- Scheduled Personal Property Riders: If you own particularly high-value or unique items (I.e. jewelry, art, furs, antiques), then this coverage allows you to expand the coverage provided by your plan. Specific possessions will be itemized on your plan, and you will be able to receive much more compensation for these items in case of a loss. Additionally, you can receive coverage for more expansive perils, such as if you accidentally lose a piece of jewelry.
- Replacement Cost Value Contents Insurance: Under this coverage, you will be able to increase your personal property coverage to cover items at today’s values, rather than at the used value represented by cash value coverage.
- Special Personal Property Coverage: Standard homeowners policies might list only the perils that they will cover, with every other potential loss being excluded. However, by upgrading to special coverage, you will be able to flip your coverage so that your plan will all coverage except for a specific list of exclusions. Therefore, your benefits will be much more expansive.
- Home Business Insurance: Operating a business out of your home does not entitle business materials to coverage under your homeowners insurance. By adding a home business insurance rider to your policy, you’ll be able to insure these assets separately from your standard possessions.
Keep in mind, at times, it might be necessary to insure particularly expensive items separately from your homeowners insurance altogether. For example, if you have numerous pieces of high-end jewelry, then you might need to take the course of buying specific jewelry insurance.
Throughout the process of insuring your personal possessions, your home insurance agent will be by your side. Our commitment is to make sure that your most cherished items always have appropriate benefits ready to protect them in case of sudden losses.
Also Read: How Often Do You Have to Pay for Your Homeowners Insurance?
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