Insurance premiums are not a favorite topic of discussion. Many people feel paying for homeowners insurance is a waste of money. That is, until there is a need to file a claim. Then all that money that's been paid seems like a fantastic investment.
It's easy to know what the insurance coverage should be on a house, but what about the personal property? These items are best described as the contents of the structure (including garage and storage buildings). Specifically, they are all the things that are "loose" that would fall out if you cut the roof off and turned the building upside down.
Unfortunately, it is usually after you file a claim that you discover you did not have enough insurance coverage. You might have had a handle on it when you first purchased your policy, but things change.
Think about how many holidays you have celebrated over just a three-year period. Of course, the big one is Christmas. Most likely during these years you've brought a new television, CD player, DVD player, laptop computer, printer, some electrical appliances and power tools into your house. And if you have children, chances are you've also purchased a video game unit and video games. And clothing! Possibly a very nice, expensive leather jacket?
In addition to Christmas, you have birthdays, anniversaries and other special occasions. You might have remodeled, adding or upgrading kitchen appliances, possibly new furniture and new electronics at the same time. If you did the remodeling yourself, new power tools probably are now in your garage.
Landscaping is another project that probably created the opportunity to extend your list of personal property. A new yard cart or wheelbarrow, garden tools, gas or electric lawn edger, trimmer, hedge clippers and maybe a new lawnmower so your lawn will look great, too!
Have you considered that you might need higher insurance coverage?
There are limits on many items that also must be taken into consideration. Jewelry (remember the anniversary!) often has a limit of 00 to 00 on standard policies. This means that if you have jewelry with a total value of more than your limit, it is not covered unless you purchase a rider or umbrella. The rule of thumb is to have any item worth more than 00 scheduled separately. That leaves a lot of room for just a few expensive pieces to quickly exceed your limit. If you have just four necklaces and four bracelets worth 0 each, and your limit is 00, the value of all the other jewelry will not be covered.
Guns, collectibles, coins, and many other items can require the need for additional coverage. And just all of your items in general if you own more than the 'standard', might exceed your policy.
So how do you know what you have and how much it's worth? Create a personal property inventory. This photographs and itemized list will help you capture all you have. We own a business and home inventory service and most of our customers state they were unaware of how much they had until we presented them with their completed document. One comment was, "I guess we just accumulated things over the years and just didn't give it much thought!"
Once your inventory is completed, you can share the photos and written report with your agent and discuss the items that might require an umbrella or rider. Don't wait until you're filing a claim to find out that you're under-insured. Then it will be too late to receive the funds necessary to replace all those items that took years to purchase.
