Home Contents Insurance -- Do You Need Additional Coverage For Your Valuables?

Do you really need to get additional home contents insurance coverage for that special item in your home? Doesn't your standard homeowners policy cover it? The truth is that your standard policy usually gives coverage for such items provided your loss is caused by perils that are included in the policy in the first place. This makes it very important for you to check the exclusions section of your policy.

But even though you are covered for such items within the limits of the perils included in your policy, there are usually low caps on reimbursement for most of such items. Your insurer won't pay a dime more than the amount stated in the policy (And the default coverage amount is usually low).

For example, if you report the theft of one piece of jewelry, your standard policy might NOT pay out anything more than $1,500 irrespective of how much more it's worth. So if you look at this you will agree with me that it is grossly inadequate for someone who has an item that's worth $50k.

Definitely, in such a case, you won't be happy to get $1,500. Therefore, you will need additional coverage. You have two options for increasing coverage to something more adequate for your situation...

You can raise the limit of liability on your standard policy or you can buy floater policies for a given item or items. If you want the cheaper option, then you can go for raising the limit of liability.



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Just bear in mind that your limit has to be at least 150% more than your most expensive item. Here's why this is recommended: If you raise the limit of liability to $20k then you might only be able to claim a maximum of about $8k on any single item.

You will need to discuss this extensively with your agent so you choose the right limit for your situation. Don't also forget that in this case, losses covered are still restricted to perils that are covered by your policy.

This other option might be a lot more expensive but it simply makes more sense for folks who own very valuable items since it gives you much more protection and isn't restricted to perils in your standard policy. In fact, it covers any type of loss (including accidentally flushing it (say, a ring) down the drain).

This option is scheduling each item by buying floater policies. These have tougher requirements, though. The item to be covered has to be appraised by a professional first. This will cost money but it will be money well spent.

But having said all, don't fail to discuss with your agent. Buying home contents insurance can be tricky since we all have our peculiarities once it comes to our valuables. You need to be sure you are sufficiently covered.

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