Your homeowners insurance not only protects your dwelling itself, but also the possessions housed within. Personal property insurance is therefore a critical component of your benefits, and it’s not something to buy flippantly. You have the full opportunity to adapt, increase and augment your coverage to your greatest advantage. However, you must know how to do so appropriately.
Understanding the Limits of Personal Possessions Coverage
Your homeowner’s insurance coverage for personal possessions will help you repair or replace belongings if they are damaged or lost in hazards like fires, severe weather, theft or vandalism. Therefore, if someone breaks in and steals your TV, computer and other items, then you can file a claim against your possessions coverage for help replacing them.
However, your policy will have conditions attached, and it will not provide unlimited benefits.
- Your insurer will only pay up to the maximum dollar amount listed on the policy for all possessions losses.
- A deductible will apply to all possessions claims, and your plan will not pay for a loss that is less than the deductible value.
- Most policies only pay for possessions based on their cash values at the time a loss occurs. This is an item’s used value, rather than it’s like-new value.
- Sub-limits might exist for specialty items like jewelry, electronics, collectibles or other possessions of high values.
In many cases, the terms of your policy will prove adequate for your needs. However, in others, you need much more protection than your policy will provide on its own.
Therefore, at times you must make adjustments to your plan in order to cover your items more comprehensively. Some of the ways to do so include:
- Replacement Cost Value Possessions Coverage: If you upgrade to a replacement cost coverage for possessions, then your settlement will be calculated based on an item’s like-new value as opposed to its cash value. Therefore, you’ll receive more financial assistance which might come in handy in easing your burden.
- Scheduled Items Riders: Certain possessions, like jewelry or art, will have significant value attached. Even with high limits of possessions insurance, you still might not have adequate protection. However, by scheduling the item on your policy, you will be able to insure that specific piece for its specific value, and it is not subject to the same coverage limits as other possessions.
- Expanded Perils Coverage: Some perils like sump pump overflows, earthquakes or wildfires might not be covered perils under your standard coverage. However, if you expand your policy to cover these items, then you will be able to have more scenarios during which you can make a claim for lost or damaged possessions.
It is your homeowners insurance agent who knows the ins and outs of possessions insurance, and they will make certain that your exact policy matches your needs. You’ll be able to maximize your personal possessions insurance in the best ways with our help.
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