Have you ever noticed that your insurance policy has an extremely high amount of “personal property coverage” listed on it? Have you ever wondered where that amount even came from…it usually seems arbitraty and non even. The answer to why it is not even is that it is often a percentage of your Home Coverage amount (sometimes listed as Coverage A). The average unendorsed homeowners insurance policy will contain a personal property coverage that is 50% of your Home coverage amount….so if your home is insured for $300,000 your policy will include a personal property coverage of $150,000. Most modern policies or endorsed policies will give you 75% or 80% personal property coverage. Why so much?
When we at the Wallrich Agency write a new homeowners insurance policy we do a replacement cost estimator to determine the “rebuilding” cost of your home. This allows us to give you accurate coverage in case your home has a large or total loss. Often times people never come up with an amount of coverage for their personal belongings. Have you ever tried to calculate how much stuff you own ? Its a lot of stuff… This is why we err on the side of caution and give you 50, 75 or 80% coverage. Will you receive a check for that entire amount? The answer is “no”.
When a home claim is initiated the building loss is calculated and then separately we begin the process of determining what belongings you lost as a result of the claim. Most insurance companies will issue you a payment and request your receipts to issue you more money…this process usually takes a long time as it also becomes hard to remember what you owned. For this reason we generally tell our clients to make a video of their home on their phone so they can look back later and remember items. The company will replace to the best of their ability what you lost but sometimes you may get different clothes or upgrade appliances and that is expected….you may have to pay the difference on those upgraded-items. Sometimes the insurance claim adjuster will simply give you the option to settle the total amount and you can do whatever you see fit. This is a conversation you may have after a loss.
I hope this cleared up some questions you may have on the topic of personal property coverage. Please call us with questions or concerns you may have on your own policy. there are some related issues you may want to explore further such as: How much personal property do I have away-from-my-residence? or, Do I have a large collection of something that i can itemize before a claim occurs? Lastly, items like firearms, collectibles, jewelry and cash or coins may be limited by your policy so you will want to ask your agent about that.