Henrich Insurance Group

Broken WindowHome insurance policies offer protection for personal contents inside the home and so do rental insurance policies. But does this blanket form of contents coverage mean that every item inside your home is sufficiently covered?

Replacement versus Actual Value

If your insurance policy calls for replacement value of covered items rather than actual value then your property is covered, but only for its value at the time it is damaged or stolen. This reduction in value due to wear and tear and depreciation could mean that you don’t have the resources to replace the item after the claim is paid, although you will technically be made whole through the claim.

Personal Property Limits

Home insurance policies cannot agree to pay out unlimited amounts for losses, so they have limits for the various coverage options within. You will have a separate limit in your home insurance policy for your dwelling, personal liabilities, other structures and personal property. The limits are not cumulative. Each respective limit is the maximum you can receive for that particular category of loss and if another limit is over-insured, the unused benefit does not shift to another category.

If you invest in expensive art, jewelry and antiques, your personal property limit may be insufficient to cover the value of your collectibles. In addition, if you have pricey designer shoes and handbags—items that could each easily be worth hundreds of dollars or more—you may find that your limit is reached quickly, without you having the benefit of reimbursement for all your losses—not because something was excluded, but because your limit was too low compared to your property’s value. One way to avoid that is to walk around your home and take an inventory in every room of every object you own. As you do this, assess the value of each item based on actual or replacement cost and compare your total to your insurance policy limit.

It’s important that you hold your insurance policy accountable for actually covering all your losses when you have an insurable incident, but your policy is just a tool. It’s up to you to make sure that it is designed properly with the right limits and coverage explanations to actually benefit.Call us for advice on all the different coverages or to get a free Houston home insurance quote at 713-349-0400.

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