When you purchase homeowners or renters insurance, you are purchasing peace of mind to know the things most important to you are covered against unexpected loss. An important part of those policies is your personal property coverage, which helps compensate you for the loss of the contents of your home and other things you own, including those you keep stored away from your home. As you tackle New Year’s resolutions that help better yourself, don’t forget to take time to better your insurance while you’re at it. This month, we here at Gutman Insurance want all of our clients to update existing home inventory or create new ones for the first time. Then, give us a call to chat about the ways you may be underinsured and what we can do to improve the quality of your coverage in the year ahead.
Taking Inventory of Your Home
Many of our clients already have a home inventory. If so, take time this month to add any expensive new ‘toys’ you may have received or purchased during the holiday season, as well as any other items you may have acquired since you last updated your inventory. If you do not have an existing home inventory, the New Year is a great time to create one.
According to the Insurance Information Institute, a home inventory can help you accomplish three things:
- Better accuracy when calculating your coverage needs
- Easier claims process after a loss
- The ability to validate the value of your losses for tax purposes
To get started, we recommend downloading an app designed specifically for inventorying your home. This allows for easy organization and safe online storage. Go room to room in your home, listing every item in every nook and cranny. Don’t forget to open drawers and cabinets, as well as dig through the garage, basement, attic, and other storage space. Next, document your findings with video or pictures. It helps to snap pictures of the items themselves, as well as keep track of purchase receipts, serial numbers, appraisals, and other supporting documents.
Review Your Coverage
Reviewing your coverage and home inventory is not as simple as it might seem. Several factors affect how much your insurance settlement might be in the event of a loss. You can find out what your policy does and does not cover by scanning the ‘Personal Property’ section. In a standard homeowners insurance policy, this can be found under Coverage C. Generally; default coverage equals 50 percent of the total structural coverage found in Coverage A. However, your coverage may be different – particularly if you have condo-owners or renters insurance that has no structural coverage to base your personal property limits.
You should check the overall coverage limit, as well as the special coverage limits for certain categories of high-value items like firearms and furs. If your jewelry collection exceeds the $1,500 coverage cap, for example, you will need to schedule additional protection specifically for those items if you want to ensure they are fully covered against loss.
Finally, check your insurance policy for a replacement value endorsement. Without it, your standard coverage probably only compensates you for the actual cash value of your losses, which takes into account the depreciation of your belongings. Considering you will already be out-of-pocket for your deductible, going with a replacement value endorsement could leave you significantly under-insured – particularly if you wish to replace your damaged or stolen items with new ones.
If you need to add a replacement value endorsement to your policy or schedule additional coverage for specific items, contact the team here at Gutman Insurance today. We look forward to serving you soon.