How To Accurately Insure The Contents Of Your Home
A homeowner's insurance plan typically covers the structure of the house and the contents. Most people do not have trouble determining how much structural coverage to have, but many people find it challenging to come up with the value of their content. If you want to insure the contents of your home accurately, here are some tips to help you accomplish this goal.
You Can Use a Standard Calculation
If you are not sure how much coverage you need for your personal belongings, you could use a standard calculation to determine the amount to purchase. The standard calculation that insurance companies use for this is 50% to 70%. They multiply your structural coverage by the percent they use, which results in the amount of content's coverage they recommend. Using a standard amount like this is common, but you may want to take it a step further.
Understand How Compensation Works
As you choose how much coverage to buy, it might be helpful for you to understand how compensation works if you file a claim. Imagine if you experienced a total loss of your home from a fire and that you had $100,000 in content's coverage. Would the insurance company automatically give you a check for $100,000 for the loss of your personal belongings? In most cases, the answer is no. Insurance companies ask homeowners to create lists of the things they owned, along with the values of the items. The agent adds these up and gives a check for your actual loss. If you add up the value of everything you own, this should be the coverage you have on your policy.
Creating an Inventory Is Helpful
The problem with a total loss is that it is hard to know what you lost. While you will hopefully never experience this problem, it can be helpful to have an inventory of your possessions if you ever end up with this issue.
Creating an inventory of your house is helpful because it documents what you own. You can create a list on paper or video. Once you create the inventory, you should keep it somewhere handy that you can access if you ever lose your home. You can then use this list to prove what you owned if you lose your home.
If you have questions about home insurance coverage, talk to an agent. An agent can help you select the right coverages and amounts for your policy.
