Do you have enough Coverage C in your homeowners policy?
Let’s find out.
In my last column, we looked at Coverage B, “Other Structures.”
Now it’s time for Coverage C, or Personal Property Coverage. We’ll describe what it is, and then look at three mistakes you can make.
What’s covered under Personal Property Coverage (Coverage C)?
Personal Property Coverage provides insurance for almost everything you own that isn’t nailed down.
It includes big things like your sectional sofa, your king-sized bed, and your 54-inch TV. It includes small things too, like your favorite books, the stack of board games you only played once, and that Lazy Susan your kids knocked off the table and chipped- but you love too much to throw away.
It includes everyday things like your clothes and dishes, as well as not so everyday things, like your jewelry, antiques and your third-generation sterling silver flatware.
In short, if you can move it, it’s probably covered under Personal Property Coverage.
Mistake 1: Not documenting your possessions.
If I asked you to sit down over coffee and write down everything you own, could you do it? From memory? I mean everything.
Probably not. I couldn’t either.
But that’s what the insurance company is going to ask you to do after a fire.
People often miss out on money they’re entitled to because they can’t remember everything that was destroyed.
My advice:
Make an inventory of all your possessions. Keep it off-premises.
A quick way to do this is a walk-through of your home while making a video on your phone. You could make separate videos for each room of the house and the garage.
Save the videos in a “cloud” account.
Mistake 2: Not carrying enough coverage.
When folks make Mistake 1, it often causes Mistake 2.
When we don’t document how much stuff we have, we don’t add up its value either. If you carry “Replacement Coverage,” you are entitled to a new pair of slacks to replace the five-year-old slacks hanging in your closet.
Have you ever added up the cost of replacing, new, all your clothing? It might shock you.
My advice:
Make sure you have “Replacement Coverage.”
Then add up the costs to replace all your things. If you find that’s too overwhelming, try this shortcut.
Make a ballpark estimate of the cost of replacing the “big-ticket” items. Then double it. If that approaches or exceeds your coverage limit- call your agent.
Mistake 3: Not “scheduling” expensive items.
Homeowners policies have exclusions and limits on personal property. Lots of them.
The common limits of coverage that you’ll see are on certain expensive items, like jewelry and computer equipment, and on rare and collectible things like gun, stamp and coin collections, as well as antiques and art.
In addition to dollar limits on these types of property, the typical policy won’t cover “lost” or “accidentally damaged.”
That’s a very unpleasant surprise when someone loses a one-carat diamond from a wedding ring.
My advice: Go get your policy.
Find the section, Coverage C, Personal Property, and read it. Read it slowly and carefully, looking for limits on coverage. Also read the Exclusions section of your policy.
Most homeowners have at least one thing that should be “scheduled” as additional coverage.
Final thoughts:
There are no dumb questions when it comes to insuring your personal property. It’s taken a lifetime to acquire.
Don’t be embarrassed to ask your agent for help to make sure it’s covered properly.
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