Personal Property Coverage – An Efficient Way To Protect Your Belongings From Loss

Providing for your loved ones through life insurance is quite obvious as is auto insurance to protect your vehicle and your financial well-being. But, do you spend time thinking about insuring your personal property from damages and/or natural threats?  Most insurance buyers ignore the importance of adding insurance to protect their furniture, clothing, jewelry or electronics in their homes. Later on, they sometimes face heavy losses for their inaction.

A homeowner needs to have personal property coverage on their household possessions. Whether they own a home or rent an apartment, insurance personal property coverage may help in the event of a loss, such as theft and fire.  Below is descriptive information about personal property coverage.

What is personal property coverage?

Personal Property coverage is a type of insurance designed to protect certain items in your home. Instead of protecting the structure/ house you are living in, this policy protects your belongings from theft, fire or many natural causes. If you were to have a fire and sustain damage to all your property and belongings, an extra premium could help you recover the full replacement cost of all your belongings/furnishings.

How much insurance is required for an individual?

There are two types of personal property coverages: Actual Cash Value and Replacement Cost coverage. The latter is more costly.  An actual cash value reimburses you for the replacement cost for an item, based on the current value depreciated/usage. Replacement cost coverage on contents ensures that your claim for damage will be settled using a “like new” valuation of the damaged personal property. With replacement cost coverage, your insured personal property is typically covered for what it would cost to purchase it new at the time of the claim.

What does renters insurance policy covers?

Some renters are under the opinion that their belongings/contents are insured by the landlord’s insurance policy- this is not correct.  A landlord’s insurance policy may protect renters from certain perils, but does not extend to renters personal property. Renter’s insurance policies provide the most comprehensive coverage and it may help you to cover the cost of replacing your possessions when there is unexpected damage.

How to estimate personal property coverage cost?

It is important to know the value of your personal possessions. The renter/policy owner needs to calculate the amount of personal property coverage to know the estimated replacement value of your belongings in case of fire, flood or a robbery. The best way to evaluate and verify this is to take pictures of all items in your house. Then, you may want to prepare a spreadsheet to define the price details. If you have a loss, estimate the replacement cost of the items on the basis of the recorded details. Keep the inventory record, your itemized property and pictures in a safe place like a safe deposit box at the local bank. Repeat the same procedure every year so that you have a clear record. Professional estimators or electronic tools can help to assist you in estimating the replacement cost.

Based on the above information, it’s quite clear that every homeowner should have sufficient personal property coverage to ensure safety and protection for their belongings. The best part is that an endorsement can be added to your renter’s insurance policy or homeowners insurance policy to cover your valuables. To determine if your personal property coverage is adequate and can properly insure the replacement cost of your belongings, you can contact an independent insurance agent.

InsuranceTrak works with the best local home and renters insurance carriers to ensure you’re getting the most comprehensive coverage at a competitive rate. We use state of the art replacement cost calculators which help us to narrow down the replacement cost of your belongings.