If you have a homeowners insurance policy or renters insurance policy, you likely already have personal property insurance. It’s the part of your policy that would reimburse you for the items inside your home if you were to lose them in a covered loss, such as a fire, burglary or certain kinds of water damage. The items covered in your policy include clothing, jewelry, furniture, electronics, and much more.
Coverage C and Personal Property
The part of your insurance policy that focuses on your personal property is often named “Coverage C”. The maximum total amount of property coverage included in Coverage C varies depending on the company providing the policy and the policy form itself. However, in most all cases the amount of coverage is usually calculated as a percentage of the value of the dwelling. The minimum amount of coverage is typically 50-percent of the dwelling’s value, although it’s common to see coverage of up to 80-percent as well.
The logic is that if you have a larger home, and one of higher quality, it is to be expected that you have more furniture, electronics, and other high-quality personal property as well. Conversely, if your home is a bit more humble in size and quality, you likely have less personal property to insure. However, there are always exceptions. If the value of your property is greater than the amount included in your policy, you can opt for a higher limit.
Personal Property Coverage Value & Uses
We’ve already mentioned that property insurance covers your personal items in the event of fire, tornado, or other covered disaster. It can also apply to certain other types of events and locations, as well as providing coverage for the property of others that you are responsible for. For example, if you go on a vacation and the airline losses your luggage, you could be reimbursed to replacing it. If you borrowed a friend’s chain saw and it was stolen from your home, your policy will likely cover their stolen items as well.
Your insurance agent can assist you with calculating the value of your property and advise you on what amount of coverage would be appropriate. Though it may seem like a time consuming project, the best way to estimate the value of your belongings is to take an inventory of all the items in your home. Snapping photos and keeping receipts are also useful in the event of a claim.
Coverage Limitations & Scheduling
The maximum amount of personal property coverage isn’t the only limit that you should be aware of. When you inventory your items, pay particular attention to the value of things such as firearms, jewelry, fine art, coin collections and cash. The reason for this is that these items, and others like them, are likely have sub-limits. Sub-limits limit the amount of coverage you have should these items be lost, damaged, or stolen. If you have items such as these, you should talk to your agent about how to cover them separately.
Scheduled Personal Property
Additional insurance can be purchased for personal property that may not be fully covered by your basic coverage, such as those mentioned above. This is accomplished by placing them on a schedule. When you put the items on a schedule, you itemize your property and place a value on them. While you’ll pay a little more to insure scheduled property, you’ll have the added protection you’d need should any of these items be damaged, lost, or stolen.
Understanding the value of your personal property, the amount of coverage you have, as well as any limitations there may be, is important. Feel free to give Imes Insurance Associates a call if you have any questions about homeowners insurance.