What Things in My Home Should I Insure?
Burglaries in homes are more common than most people think. In fact, there are 2.5 million of them happening every year, 66% of which are break-ins. The FBI corroborates this, noting that one home burglary is perpetrated in the United States every 26 seconds. With an average reported loss of $2,799, this creates a large financial burden for many homeowners.
That is why having a homeowner’s insurance policy, or home insurance, is an absolute necessity if you own a house. Although most mortgage companies require borrowers to insure their property for at least the purchase price in order to secure a loan, many homeowners think they can let insurance lapse once the loan is paid off. While that strategy might save you a little bit of money in the short term, it isn’t a good idea, as your home is probably the largest investment you have and, without insurance, it’s unprotected.
A homeowner’s policy protects you in the event of disasters such as fire, windstorms, lightning, and vandalism and covers most items in your home if they are destroyed in a disaster. Items such as clothes, furniture, and appliances are commonly claimed, but you can get additional coverage for other items of value.
How to Appropriately Insure Valuable Items in Your Home
While a standard homeowner’s insurance policy typically provides some coverage for your personal items, these are often limited. You will want to determine which items are specifically covered in your current insurance policy and then choose which other items you may want to include to ensure adequate protection in the event of theft or loss. Here’s how to begin:
Make a Home Inventory
Even if many of your household items are included in your current insurance policy, you will want to create a home inventory. When getting started, consider the following:
- Begin in a contained area like a closet or shelf and catalogue each item, then move on to another small space.
- Begin with your most recent purchases first.
- Describe each item, taking pictures if possible. Pair each item with a receipt if you have it and make note of models and makes or any other information that will be helpful if you must make a claim.
- Record serial numbers when possible.
- High-value items such as art, collectibles, and jewelry may need separate coverage. Make sure you have appraisals for these items.
Finally, be sure to store your inventory list and any paperwork or photos associated with it offsite in the event of a fire or other disaster that could destroy your home.
Understand That “Valuable” Items May Need Special Coverage
Any items that you own that might be considered rare, collectible, or very expensive may need special coverage, depending on your current policy. Typically, these items can include:
- Fine jewelry and watches
- Coin or stamp collections
- Fine china
- Musical instruments
- Medical devices
- Sporting equipment
- Cameras and electronics
Anything else that you consider a prized possession or that is very costly should be considered in your list of valuable items. Have any valuable items appraised by a professional to find the correct amount to insure the item for. This way, you can determine whether your current policy would offer enough protection or if you should purchase additional coverage. Make sure you get these items appraised every few years to keep up with increasing values.
Know Your Current Policy
Now that you have a complete inventory of your items – and know which of them may be particularly valuable – check your current homeowner’s or renter’s insurance policy to see what your policy covers and what the payout limits are for each item. Every insurance policy has specific limits for both damage and theft and some items, such as jewelry, may be covered but have relatively low payouts unless you purchase additional coverage.
Upgrade Your Policy Where Necessary
If your property is damaged or stolen, most renter’s or homeowner’s insurance policies will reimburse you for the actual cash value (ACV) rather than the replacement cost value (RCV). With actual cash value policies, the items are replaced for the price the item is worth, minus any depreciation due to age or condition. If you upgrade to a replacement cost value policy, you will receive money equal to the item’s actual cost without depreciation for a higher claim payout.
If you want to ensure that particularly valuable assets such as fine jewelry, firearms, and art are appropriately insured, you should consider a scheduled personal property endorsement. This is an add-on policy that allows you to increase the coverage limit for listed items. Although it will raise your premium slightly, you will receive a higher payout amount under a claim for a covered loss.
Finally, you can opt for a guaranteed replacement cost (GRC) policy that protects you from inflation, ensuring you can repair or replace items for whatever it costs to do so at current prices.
Let’s Get You Covered
Whether you experience a home break-in that results in theft or your home is damaged by fire, weather, or another natural disaster, experiencing a loss of your personal or prized possessions can be devastating. Having the proper homeowner’s or renter’s insurance policy is important to ensure that you can replace your belongings after such an event occurs.
At Schuetz Insurance, our insurance experts can assist you with choosing the right policy to meet your insurance and coverage needs. We will help you determine which items may require additional coverage and assist you in choosing the coverages and deductibles that best meet your needs and current circumstances.
Our focus is your wellbeing, so we are committed to getting you the coverage that will help you recover faster in the event of damage or theft involving your home. Contact us today to learn more about insurance coverage for your home and all the things in it that you love and need.
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