Your home insurance does a lot of cool things. Yeah, it might seem like it’s just kind of there most of the time, but it’s protecting you from the possibility of financial loss. You might have some questions about what your home insurance covers – including whether home insurance covers personal belongings. We’ll explain how home insurance covers your possessions, how much personal belongings coverage you need, and the difference between replacement cost value and actual cash value coverage.
Does home insurance cover personal belongings?
Yes. Your home insurance should have a certain limit for your belongings (meaning your electronics, clothes, furniture, and so on – the contents of your home.) That means that if a “covered loss” happens, your insurance company would pay to replace the treasures that were destroyed. (And here at InsuranceHub, we make insurance easy. You can get quotes for home insurance by filling out our online quote form or giving us a call today.)
What losses are typically covered?
Usually, home insurance will cover losses like burglary and fire, along with others. You have to read your policy to understand what exactly is and is not covered. Your policy outlines the agreement between you and your home insurance company, and it tells you lots of good stuff. Helpful, right?
What losses are not covered?
There are some losses that are usually not covered by home insurance. For example…
- Flooding: To protect your personal belongings against flooding, you would need to get flood insurance from the National Flood Insurance Program through an agent.
- Earthquakes: If you live in an area that’s prone to earthquakes, you have to purchase a separate earthquake policy for it to be covered.
At any rate, you really have to read your policy to see which losses are covered. Yes, that paperweight seems intimidating and not super fun, but it’s a task that must be done.
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How much coverage do I need for personal belongings?
You also have to consider how much coverage you need for your personal belongings. Chances are you’ve got a lot more “stuff” than you think you do!
The best way to find out how much coverage you need for your personal belongings is to take a home inventory. That means going from room to room in your home and making a list of all the items in it – and recording their value.
A home inventory will help you if you ever have to file a home insurance claim. You’ll know exactly what needs to be replaced because you’ll have a detailed, organized list. Aside from claims, your inventory will help because you’ll have an idea of the value of your belongings – and therefore how much coverage you’ll need to protect them. So, grab a clipboard, some paper, and a pen (or, if you’re feeling tech-savvy you can grab your phone and use Google Drive to take your home inventory) and go to town with making your list.
Pro tip: Give special attention to your valuables and jewelry. Most home insurance policies will only cover a very limited amount of valuables, jewelry, furs, silver, and so on. If you have expensive trinkets or possessions you might want to add coverage for your valuables.
How should I insure my belongings?
There are a couple of different options when it comes to insuring your personal belongings:
Actual Cash Value: ACV means that the insurance company will reimburse you for the cost of your belongings at the time if the loss (which means you will only get their depreciated value.)
Replacement Cost Value: RCV will allow you to replace your lost belongings at today’s prices. It does not take the depreciated value of your belongings into account.
You may want to insure your belongings for their RCV because that means you’ll be able to replace your belongings at today’s prices. With ACV, you may not get enough reimbursement to get new belongings.
For example, your furniture was worth $8,000 when you bought it and it’s now worth $6,000. You have a fire. Getting the same furniture at today’s prices will cost $8,000. With ACV you would only get $6,000, but with RCV you would get the full $8,000 to replace the furniture.
So, that’s what you need to know about protecting your personal belongings with home insurance. If you’re interested in shopping for home insurance and getting multiple quotes, our team of home insurance experts would be happy to help. We can help you compare coverage options and pricing so you know you’re getting the best coverage at the best rate. Get started with your home insurance quotes today by filling out our online quote form or giving us a call today.