Does your home insurance policy include sufficient contents insurance? While it’s a standard component of most policies, many homeowners are actually underinsured considering the value of their personal belongings.
Personal Contents insurance covers the movable personal belongings inside the house. This includes things which are damaged by smoke or fire, including: furniture, clothing, electronics, and appliances; as well as the food that will spoil or suffer smoke contamination in the pantries, cupboards and fridge. It will also cover jewellery, art, and other valuables; and these higher-value items are often where people discover they are underinsured. Note that if you have a particularly high value jewellery or art collection, some insurance companies will ask you to disclose that value when you’re setting up coverage, and they will provide separate and additional coverage limits for those collections, leaving the “personal contents” portion of the coverage open for the remainder of your belongings.
Under most policies you will simply have a comprehensive limit to the payout you can receive for all of your lost personal property. This may be particularly difficult to navigate if you own collectibles, rarities, or fine art. The value of jewellery, gold coins, art, and other valuables can exceed the coverage in your main policy, so you may want look into additional coverage. Even if you simply have a lot of electronics, you should be checking your limits and comparing it to what it would actually cost to replace what you own.
What Are Coverage Limits?
Every company and plan will have its own coverage limits. These limits are usually placed on specific types of item or even individual items. For example, you may have a total coverage limit of $50,000 for personal contents; but $10,000 of it may be set aside to specifically cover jewelry, watches, and other valuables. Alternatively, every piece could be insured up to a certain limit, for example, $2,000, so even if you had three pieces of jewelry worth $10,000, you would still only receive $6,000. It’s important to pay attention to the fine print when it comes to contents coverage.
Should Renters & Condo Owners Get Coverage?
It’s tempting to think that you can go without coverage if you’re not responsible for the building itself. However, tenant’s insurance is cheap, especially compared to the cost of replacing all of your things out-of-pocket. Think about what you would do if you had to replace your laptop, your TV, and all of your clothes right now. Could you afford it? By comparison, tenant’s insurance can cost less than $200 a year.
When it comes to a condo, the board will likely handle insurance coverage for the physical damage to the building itself; but you still need to make sure your own belongings are covered in case something happens. If you own or rent a condo, make sure you get adequate coverage for your belongings.
Making a Contents Insurance Claim
Should a fire occur in your home, you will have to open an insurance claim. There will be several elements to your insurance claim overall: Structure, Additional Living Expenses, and Contents. Narrowing in on your personal belongings, the process of filing the claim and listing your lost and damaged goods can feel daunting, complicated, and impersonal.
There are some good reasons to get a defender for your fire insurance claim, such as getting an experienced professional’s help dealing with the demands of the process during an emotionally difficult time. They can help you:
- Create a comprehensive list of lost belongings
- Submit a provisional list to begin the reimbursement process without finalizing your claim prematurely
- Explain what your contents coverage means and how much compensation you can receive
- Negotiate with the insurance company if there is a dispute about your claim