Proper content coverage with home insurance

Although some insurance providers allow you coverage of your house contents without setting a specific limit, generally you will be required to set a particular amount on them. The higher the sum insured, the more it will cost you in premiums. However, in the event of a home insurance claim arising from loss, damage or another cause, you will only be reimbursed by your policy with the actual value of the contents.

The usual amount stated for the home insurance coverage may appear to be a substantial amount of money, but the insured sometimes underestimate the value of their home contents. This means they are in fact taking the risk of not having adequate insurance by arranging reduced coverage. To be on the safe side, it is an advantage for you to make an inventory of every item in your home. Then enlist the services of an insurance agent to make an evaluation of the listed items, to their full replacement value.

Averaging reimbursement
Various insurance companies make a practice of averaging when making claims settlements. With this method your reimbursement will be determined by the overall amount of coverage that you have taken for the complete house and not just the specific value of its contents. Therefore, should you have a lesser amount of coverage in effect than the total value of the contents, you would be paid out only a partial amount instead of the actual full value of the items claimed for. This is a situation that could relate to a claim even for a single item that is less than the limit set by your policy.

Should you be the tenant of a house then the items listed for coverage could be less than if you were the owner of the property. This is due to a homeowner needing to take responsibility for the entire infrastructure of the house, whereas you are concerned only with its contents.

Your listed items
When making a list of the items for which you require coverage, remember that when making an evaluation for your home insurance policy, every item should be included. This is because in the event of a fire or natural disaster, a house can be destroyed completely and you will need full insurance coverage for your losses to be reimbursed.

Examples of this are that every item in a kitchen should be listed, from cutlery and dishes to expensive electrical home accessories. Although you may think one plate is not a costly item, multiply it several times if many get broken and it becomes an expensive replacement. The bathroom is generally considered as having fewer items than other rooms. However, start adding together the accessories, custom sink, bath and again you are faced with a substantial amount. This method of listing can apply to every other room in the house.

Special items
Keep in mind when arranging your home insurance coverage that a standard policy offers only minimal coverage for items classified as antiques, jewellery, collectibles, computers and others. It would be wise to obtain a specialist valuation for any item that falls within this category and arrange separate coverage.