How much home contents insurance do you need?

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Whether you live in a home, condo or apartment, it’s important to have the right insurance protection for your unique needs — including liability coverage (for example, if someone sues you after becoming injured inside your home) and home contents coverage.

While most standard home, condo and renters’ insurance policies automatically include an average amount of insurance for home contents, also called personal property coverage, you may need additional insurance coverage depending on the type of things you own and their value.

Learn how to determine how much insurance you need for your home contents.

What home contents does a standard insurance policy cover?

Most personal belongings will be covered by a standard home, condo or renters’ insurance policy with limits. There are some exceptions, however.

Some of your personal belongings may require a separate endorsement or insurance policy. High-value jewelry (like an engagement ring), silverware and furs are examples of items that likely need insurance coverage beyond your standard policy.

You might also have personal property that exceeds the limits in your standard policy. In this case, you could choose to purchase additional insurance coverage to make sure your belongings are fully covered.

It’s also a good idea to know if your home, condo or renters’ insurance policy provides replacement cost or actual cash value after a covered loss, like a fire or burglary. Replacement cost would provide you with an amount to buy the item, new. Actual cash value would calculate your loss using depreciation and pay a lower settlement amount.

How much home contents insurance do you need?

To help answer this question, you can estimate the value of your belongings and compare it to the limits in your insurance policy. (A limit is the amount of coverage you purchase — you can think of it as the maximum amount that would be paid if you had a total loss, such as losing everything in a home fire.)

However, to be more accurate, you should consider creating a home inventory that lists all your personal belongings and includes a description of each item, the date and place of purchase (if available) and the estimated or appraised value. Group like items together and total their value, so you have an idea of the total value. For example, the total value of all your jewelry.

Then, share your home inventory with your independent insurance agent, who can help you review it against your current insurance policy and see if there are any gaps in coverage that you might want to address.

Having a home inventory is also extremely helpful when it comes time to file a claim, and it can help your claim be settled faster. So, be sure to store your home inventory somewhere safe and off premises, like cloud storage or a bank deposit box.

If you choose to create a home inventory, do your best to keep it up to date, and don’t forget to list outdoor items too, like outdoor furniture, and items in other buildings on your property. You might also want to make a note of anything you own that’s stored off premises, such as in a storage unit, a bank deposit box or with a relative.

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When to buy additional insurance for your personal belongings

After reviewing your home inventory and the limits of your insurance policy, you and your independent insurance agent can work together to determine if it makes sense for you to purchase additional insurance coverage for your personal belongings, and your agent can walk you through the process.

Sometimes an appraisal will be needed to determine the item’s replacement value. For very expensive items, your insurance company might also request pictures or other forms of identification, like serial numbers, for documentation and fraud prevention.

Your independent insurance agent can also help explain any additional benefits to purchasing separate coverage, such as coverage for losing that item. Whereas lost items typically are not covered by a standard insurance policy.

Talk to your independent insurance agent if you have any questions regarding the details of your home, condo or renters’ insurance policy or if you need help determining if you have enough home contents insurance.

This article is for informational and suggestion purposes only. If the policy coverage descriptions in this article conflict with the language in the policy, the language in the policy applies.

- Insurance Information Institute

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