3 Things to Know About Home Insurance Coverage for Valuables
So you’re thinking about homeowner’s insurance. First of all, good on you! Home insurance coverage may not be mandatory, but it sure is essential.
Basic home insurance will protect your bank account should anything befall your home and contents. However, things are a little different when it comes to valuables in the home. For content insurance you need a comprehensive coverage plan. But for some especially valuable items you may need to take out policies for individual items. Here are a few things you should know about insuring valuables.
Actual cash value vs. replacement cost
Policies come in two flavours for home insurance coverage, whether it’s on your possessions or the home itself. What you choose determines how your insurance company will pay out in the event of a claim.
Actual cash value plans will reimburse you for the value of items at the time they were damaged or stolen. Replacement cost plans pay for the full value of the replacement or repairs of the item or items you are claiming. This can be useful because it’s about replacing what you used to have, which can be helpful if replacement costs are higher than the actual cash value of what you lost.
When it comes to valuables it’s especially important to be aware of what kind of plan you get. It makes a difference if you need to replace the $2,500 computer you’ve been using as a professional-grade workstation. With actual cash value home insurance coverage, you are likely to get less money. A replacement cost plan, on the other hand, will provide you with what you need to purchase an equivalent machine.
Coverage for high value items is separate
Jewelry, paintings, sculptures, other rare art and collectibles, and even top tier wines, can all fetch high prices. While comprehensive policies will cover the basic contents in your home like essential appliances and furniture, it won’t include coverage on very high value items. If you have anything especially valuable that needs to be insured, make sure to ask about getting coverage on those items. Most home insurance policies have limits, and very high value items might exceed the limits. Let your insurer know what you have so that he or she can recommend a policy that makes sense. Keep in mind that there may be more restrictions on such coverage.
Get all the facts straight when making a claim
With any expensive purchase, make sure to keep sales receipts, photographs, and other information (make, model, serial number), and obtain a professional appraisal of the item’s value. Make sure to update your inventory of belongings any time you acquire anything new that has the potential to be very valuable.
If it comes time to make a claim on your home insurance coverage, the first thing you should do is call the police if there’s been a break in or theft. If criminal activity isn’t a factor, your first call should be to your insurance provider. Speak to an agent and follow their steps for the claims process.
Understand that valuable items come with extra considerations when you are insuring your home. Take the proper steps to protect ALL of your assets, and your finances will be less likely to be devastated later.