How Much Contents Coverage Do You Really Need? How To Get Your Coverage Right

When it comes to protecting your belongings, you need to have something called contents insurance.

What should you consider "contents?"  This is best described by any personal items that are not permanently attached and that you would take when you move.  This includes not only inside your home/apartment but items outside, too, like in a storage shed.

People commonly underestimate the value of their contents because they forget about little things that make a significant difference in the total value. 
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How do you best go about accurately calculating this for your home/apartment? Here is an organized step-by-step method that will help you determine how to get your contents coverage just right:

- First, decide what you're going to use to record your information.  Options include a simple spreadsheet template, home inventory app, or online digital tools.

- Do a room by room sweep. Remember to include alcoves, closets, attic spaces, garages, and basements.  For each room/area, take pictures/videos of all the contents, even the little things, and make descriptions of them.

- Go outside and do the same thing for all your possessions on your property that are not permanently affixed.

- To determine the value of your items, decide whether you want replacement cost or actual cash value coverage.  Replacement cost is the amount to replace the item with a new one of similar quality.  Actual cash value is the current depreciated value of the item.  Obviously, using replacement cost is typically recommended to maintain your current level of living after a loss. 

[SIDEBAR:  Standard home insurance policies have set limits on certain high-value items (jewelry, musical instruments, electronics, art, collectibles, etc.).  If you have any of these, you may consider  securing additional endorsements or riders to cover them above what the standard policy allows.]

- Calculate the value of possessions of each room/section.  A great way to accurately assess this is to research the items online to find comparable values.

- Identify any near future purchases you're planning to make and include those items in your inventory.

- Add up all the rooms/sections' values to get a total.

- Consider adding 10-15% to that number as a cushion for those items you may have either forgotten to include or undervalued.  This is your final total.

- Work with your independent insurance agent to compare insurance companies and find a policy that best fits your circumstance.

- Select the coverage tier that most closely aligns with this total.  To keep from being underinsured,  choose the closest higher tier.

- Keep both your inventory and insurance coverage information in a secured area, and update it periodically.

Doing a home inventory may seem to be one of those thankless tasks, but for those who've experienced a significant loss, they will agree that it's worth the effort to ensure the value of your possessions are protected.

Have you reviewed your contents insurance coverage lately?  Call me to see how insurance premiums compare to what you have:  706-726-1446.