Friday, February 1, 2013, AM | 1 Comment
Contents insurance coverage is a great way to protect the items within your home or apartment when the worst happens. While it may not protect precious items such as family heirlooms or photo albums, it can provide financial protection for important items like your computer, electronics, and valuables such as jewelery.
Despite the important function this type of insurance plays, few people know about it. Even fewer know if they have enough insurance to cover replacement of their valuables when a disaster destroys their home.
Is Your Contents Insurance Part of a Renters or Homeowners Insurance Policy?
When checking to see if you have enough contents insurance coverage, you should look at your homeowners or renters insurance policy. This is because most policies will have contents insurance coverage as part of the package.
The issue with this type of contents insurance is that the coverage is tied to the value of your home. Generally, contents insurance coverage on a home insurance policy will range from half to 70 percent of the value of the home.
However, this may not be enough, especially if you have valuable items. This is why it’s important to make a list of your valuables and their cash value.
Make an Inventory List
While it seems like a boring and time-consuming task, making an inventory of the items in your house is a good way to ensure that you get the maximum coverage from your contents insurance.
Make a list of all your valuable items like electronics, jewelry, computers, and antiques. Keep receipts of new purchases, so you can get reimbursed at their purchased value. In addition, include furniture if the costs of replacement is significant.
Do You Have Expensive Items?
If you have very expensive items that exceed your home’s insurance coverage, you will likely need additional coverage. While it may seem an unwanted expense, it makes good financial sense.
A good example is the insurance on your bank account. The insurance on your bank account ensures that your money is safe even if a run on the bank happens.
However, it only covers the first $250,000. You would get additional coverage if it meant keeping the rest of your money safe. The same idea goes for your valuables not covered by your home insurance policy.
Getting additional coverage for costly items can help cut the cost of replacement. In some cases, it may even cover complete replacement. Remember that coverage only allows you to replace the lost item with something of similar value.
Does It Fit Your Budget?
The last big consideration is whether your budget can handle additional premiums for extended contents insurance coverage. If you do need more coverage, you can find greater savings on your extra policy by comparing insurance quotes. You can check rates at the rates page for homeownersinsurance.com to learn more.
Shopping around will allow you to find premiums and deductibles that fit your current budget and protect your valuables and possessions.
While the burden of paying additional insurance costs can seem hard, the coverage provided can make rebuilding your life after a major disaster a lot easier.
Adam Vaught is a professional insurance company representative. He enjoys writing and sharing his expertise with people to help them make the best decisions.