Home Insurance – What is Personal Property Coverage?

Contents Coverage commonly called personal property coverage is a part of your home insurance property that covers the expenditure of replacing your possession in the circumstance that they are shattered or damaged in a named peril such as rain, lightning, hail and robbery.

A typical home insurance usually provides fifty to seventy percent of your dwelling coverage to your personal property coverage. This coverage though can sometimes be not enough to cover for the whole net worth of your properties at home. The option you have left is purchase additional coverage for these properties.  In order to keep track of your material possessions at home, you can do a home inventory. Just like any other inventory, home inventory is a complete list of possessions which you have acquired and brought home. There two main reasons that a home inventory can help you in assessing your acquired possessions. First, it will give you the proper estimate that can help you in purchasing the right amount of insurance for your properties. Second, it will be your proof of ownership in case a natural calamity like flood or storm hit your place and you can directly ask for reimbursement from your insurance company because you have the proper documents that you own such properties.

It is therefore advisable that you should keep track of all your belongings as it enters your household. The receipt and proof of ownership can be stored and can be used as additional documents if necessary. Your insurance company would also need this to confirm if you really own that property and have not stolen or borrowed to increase your coverage. Certain falsification of proof of ownership once discovered by your insurance company leads to termination of contract. Always keep your documents in place that is safe in case your home is hit by a storm or flood.

Personal property coverage can also be use to cover items which you think are prone or have a high risk of being stolen from you. Items such as cellular phones, necklaces and even “antique” cowboy hat can be eligible for coverage. This is a separate coverage from your usual plan and certain endorsements are needed for this.

The properties that you have applied insurance for have what we call “Actual cost”. This cost is the amount that you have paid the moment you took possession of that property less the depreciation. For Example, the expected life span of a television worth seven hundred dollars is 10 year, after five years of using it, the actual cost of the television is not seven hundred dollars anymore but seven hundred dollars minus the depreciation rate. Now, this is really important since you may think that you can ask for reimbursement of seven hundred dollars. The reimbursement that can be given to you is only the replacement cost. Let’s say for example, that television is swallowed up in a fire accident five years after it is purchased. Of course the insurance company would be force to pay you the replacement cost since you applied insurance for it, but that replacement cost, is only to replace your lost television with the same television or one which is similar to it. If it’s worth seven hundred dollars before and now it only cost fifty dollars, then the reimbursement which will be given to you is only fifty dollars to buy that same television.