What if we told you one simple task could lead you to thousands of dollars in savings in the event of a major loss? If it sounds too good to be true, it’s not. To kick off the New Year, we here at the Andreotti Agency are revealing one big tip that can drastically improve the quality of your personal property coverage in 2018. Continue reading to find out what you need to do and how we can help.
Take Inventory of Your Home
It may sound strange, but it is important that you know exactly what you own for a couple of different reasons. First, it can help you determine if you are underinsured for personal property coverage. Second, it can help you instantly identify all of the things you are missing when you need to file a claim with your insurer. If you already have a home inventory, January is the time to update it with all the exciting new gifts and toys you purchased or received during the holiday season. If you don’t have a home inventory, don’t fret. We’ve got a few simple tips for getting started:
- Download an app to help you organize your belongings into categories and safely store your information online.
- List every item you own in every nook and cranny of your home.
- Don’t forget items in your attic, garage, or off-site storage facility.
- Take pictures of your items.
- Perform a video walk-through of your home.
- Collect your purchase receipts, appraisals, credit card statements, and other substantiating information.
- Write down serial numbers for big-ticket items.
- Schedule regular updates, preferably at least once per month.
Review Your Coverage
Next, review the details of your personal property coverage. If you have a standard homeowner’s insurance policy, you can find this coverage listed in Section C. As you compare your home inventory results to your personal property insurance, there are a couple of things to consider to ensure you are adequately covered:
Coverage Limits
Your coverage limits are two-fold. There is the overall limit that caps the total amount of compensation you can receive for a personal property claim. This is usually set at 50 percent of the structural limit in Coverage A if you have a standard homeowner’s policy. Otherwise, you may have chosen your own coverage limit, which you should evaluate to assure it still fits your needs.
The second component of personal property coverage limits is the ‘special coverage’ caps for certain item categories. Examples include silverware, cash, jewelry, furs, and firearms. Often, the limits for one or more special coverage categories are too low to fully compensate for the loss of one or more high-value items. For these situations, we recommend scheduling additional coverage specifically for the items in question.
Valuation and Estimated Settlement
Your policy will also outline the terms for valuing your items in the event of a loss. For most standard policies, coverage is based on the depreciated, actual cash value of your belongings. In other words, you may only receive $200 for the clothes you spent $500 on at retail. If you only have actual cash value coverage, you can expect to receive a much lower settlement than you actually need to replace your items with new ones – especially after considering the cost of the deductible.
If you prefer a higher settlement that compensates you for the cost of new item replacement, give us a call here at the Andreotti Agency. We can help you add a replacement value endorsement to your policy that could significantly increase your payout after a loss.
