Personal Property of a Homeowners Policy
Backpacks, furniture, clothing and tea cups are all different in their design and function, but the same in how homeowners insurance classifies these items on a policy. Personal property, otherwise known as coverage c, provides coverage for all of your possessions providing they are not excluded on your policy.
Determining the Value of Your Belongings
One of the biggest hurtles when purchasing homeowners insurance is determining the value of your belongings. A home inventory list is one way to keep track of all of your possessions and to place a value on the items that you own. You should take note of the manufacturer, model number, where/how you got the item, date of purchase, age of the item, proof of purchase that shows cost, current value, replacement cost, and photocopies of any appraisals.
Once you know what your items are worth, you can go about purchasing personal property protection for either the actual cash value of the replacement cost value of your items.
Replacement Cost vs Actual Cash Value
If personal property listed on your homeowners policy needs to be replaced due to a covered loss, your insurance will pay out in one of two ways:
- Actual Cash Value: Insurance will pay out the cost to replace the item minus depreciation.
- Replacement Cost Value: Insurance will pay out the cost to replace the item at new condition.
The option you choose obviously effects the overall cost of your homeowners policy, but it might be well worth it for some people to pay the extra money for new items versus getting money for depreciated items at the time of a covered loss.
Personal Property Not Covered
Of course, there is a list of items that are not covered on a standard homeowner’s policy, but might be able to be added to your policy via an endorsement.
- Animals, birds or fish
- Equipment and parts belonging to “motor vehicles”, except audio/visual equipment designed to be powered by a source other than a “motor vehicle”
- Items designed to assist the handicap (electric wheelchair)
- Hovercraft and parts
- Property of roomers and boarders not related to an insured
- Property in a rental apartment
- Property rented or held for rental to others while off the “residence premises”, such as furniture owned by the insured that is used to furnish a dwelling they rent to others
- Business data that is stored in paper records, electronic data processing tapes, disks or other media (blank tapes, disks and pre-recorded computer software are covered)
- Credit cards, electronic fund transfer cards, or access devices used solely for deposit, withdrawal or transfer or funds
- Water or steam
For a more information on personal property coverage, give H&K Insurance a text/call at 617-612-6500.
