With so many types of insurance coverage to choose from, it is hard to know what and when to buy. Certain types of insurance are more common than others, auto, life, personal health insurance policies and home, for instance, while other policies are less common but just as important. A personal liability insurance policy falls into the latter category. While it doesn’t lead the way in the insurance conversation, it is vitally important and worth careful consideration.
What is personal property insurance ?
In a nutshell, personal property insurance is a supplemental insurance policy that covers personal items with a higher than average value. Many insurance policies specific to homeowners insurance include a limit on the amount of coverage and therefore the money that can be recovered in the event of a loss. Personal property insurance provides additional protection for your most valuable possessions like purchasing personal health insurance takes care of your needs when your sick.
What does personal articles insurance cover ?
Common items included in a personal articles insurance policy include art, cameras, collectibles, electronics, furs, instruments, and jewelry, though the policy can cover any number of personal items.
What items are not covered by personal articles insurance ?
While there isn’t a master list, per se, of personal articles covered by personal articles insurance, it is important to distinguish personal article insurance from basic homeowners insurance or personal health insurance. In addition to understanding that a cap exists on what homeowners insurance covers, it is also important to understand that homeowners insurance is typically endorsed to pay the replacement cost of an item, deducting depreciation. As a general rule, personal articles insurance will pay out more and cover more perils than homeowners insurance.
What is personal property coverage ?
Personal property coverage is the type of insurance that can help protect the items in your home, like your furniture. Your belongings are likely worth much more than you might think, and if they’re damaged or lost, personal property coverage could help you cover the cost of replacing them.
Determining the value of your belongings
Your home is full of things you love. Taking the time to figure out how much your belongings are worth can help you choose the amount of personal property coverage you need. Walk around your home and note the items that you spent a lot of money on. Taking pictures of these items and keeping receipts and other documents can help you keep track of the value of your stuff.
Replacing your belongings
If the personal property listed on your homeowners policy needs to be replaced because of a covered loss, there are two different ways your insurance could help :
Actual cash value
Your belongings are typically covered at fair market value. In other words, replacement cost minus depreciation. For example, your items could be covered for the amount you’d get if you sold them at a yard sale or an online auction website.
Replacement cost coverage
With replacement cost coverage, your insured personal property is typically covered for what it would cost to purchase them new at the time of the claim.
Your agent can help you understand the difference between actual cash value and replacement cost coverage. He can also answer any questions you may have about what types of personal property your policy covers.
What is scheduled personal property ?
Scheduled personal property is optional protection you can add to your homeowners policy to cover high value items. Though personal property coverage helps protect the majority of your belongings, most insurance companies set limits on certain items, like jewelry. For example, your policy may cover a single piece of jewelry that’s worth up to $1,000. If you own a $100 necklace that is damaged and needs to be replaced, you’re in good shape. If you own a $10,000 necklace, scheduled personal property can help you insure it for more than the $1,000 limit.
Find an agent to discuss how to get scheduled personal property coverage and understand your policy’s limits.