One of the major coverages that people don't fully understand is personal property coverage, whether it be on their homeowner’s insurance or their renter’s insurance. Today, I’d like to explore common misconceptions and offer some advice on what questions to ask regarding personal property coverage.
Make sure your valuables are actually covered
One of the most common things that people usually think is covered on their personal property coverage is scheduled personal property. When you have a high value item, such as a luxury watch, jewelry or even an expensive TV, the insurance company will only cover so much on that item. For instance, most policies will only cover $1,500 to $2,500 for jewelry, and can put limitations on items such as TVs or home computers. These items can instead be scheduled on your policy for a price based on the value of each item. Scheduling the items not only covers your valuables properly, some policies will even cover the items if they are lost as well!
Know that your personal property limit isn’t a guaranteed pay out
When you insure your house, the dwelling limit that the insurance company puts on the house is what they have to pay out if the event of a total loss. Personal property coverage doesn’t work that way. If you have $150,000 in personal property coverage, but you only have $100,000 in personal property, in the event of a total loss, you will receive a check for the actual amount of property that you had. This is why we not only encourage people to insure their personal property close to the amount they actually have, but also to keep an inventory of their belongings. Also, a quick note – it’s important to have replacement cost on your personal property as well!
Even if you can’t see it, it’s still covered
Most homeowner’s insurance policies and renter’s insurance policies will cover a certain percentage of your belongings even when they aren’t in your house. The average policy will cover 20% of the personal property limit for items that aren’t in the home. That could be belongings in a storage unit or even in your car. That 20% isn’t a definite number, so if you do have a decent amount of personal property not in your home, check with your agent to find out whether it is covered!
We get a lot of questions about homeowner’s insurance everyday, but for some reason, people always forget about their personal property. Make sure you know whether you're covered and how much coverage you have. Insuring your personal property incorrectly could result in an expensive misstep!
If you're looking for an insurance agent in Kissimmee, email me or give me a call at 407.846.6421.