Index | Property Insurance | Coverage C - Personal Property Coverage
Coverage C - Personal Property Coverage
Just think about your home for a second. What mental images does it conjure up in your mind? What reminiscences does it evoke? Surely, it is not only the dwelling itself. It is also every small detail connected with the place - the objects surrounding us in our everyday life and the feeling of belonging that our home usually gives us. If you want to secure your home and all the things you possess which are valuable in all the senses of this word, opting only for Dwelling Coverage may not be enough. In the event your home is damaged or destroyed, your personal property is also affected by the loss. Unless you take measures to insure it, you will lose your personal belongings and will not be reimbursed for them.
Personal Property Coverage insures the contents of your home, i.e. the items you regularly use which are not a permanent part of your house's or apartment's structure, such as furniture, television sets, bikes, clothing, appliances, utensils and tools. Personal Property Coverage can be used in appliance to valuable information saved in a hard-copy form or as electronic data. It can even protect you against the credit card fraud, or at least minimize the risk, if your credit card is listed or proved to be among your property items. With Personal Property Coverage you are allowed to extend the coverage to the property used off the premises for a percentage of the fixed Coverage C limit (usually additional 10%). The benefits Personal Property Coverage offers you are great, but the most important of them is that you will not find yourself poor as a church mouse should something bad happen to your property.
This type of coverage can pay either the actual cash value of your property or the replacement cost of your belongings lost due to a covered reason. Personal Property Coverage is normally issued on an actual cash value basis at the time of loss. Though, experts usually recommend insuring your property on a replacement cost basis because if you bought an item several years ago, its current value may be considerably less than the total cost of replacement. That is why this option is considered favorable as it enables you to replace the property items with absolutely new items or materials without any deduction for devaluation. If your policy does not provide the replacement cost of your property, it makes sense to obtain Guaranteed Replacement Coverage in addition to your Personal Property Coverage. It will give you additional protection.
Among the reasons bringing your Personal Property Coverage into force are the situations when your property (fully or partly) is destroyed, damaged or stolen. Personal Property Coverage particulars also specify the amount of coverage associated with this or that item. For example, there are some types of property that have a fixed maximum amount which you will be reimbursed whatever is the loss inflicted to your property. It usually refers to the items the amount of which is very difficult or impossible to check and confirm. Therefore, Coverage C is generally considered to be one of the most complicated coverage types because of many specific details concerning what is and what is not insured under a particular policy.
Remember that it is possible to add special endorsements to compensate for the limitations in the coverage. Supplemental protection in the form of endorsements is usually available for a relatively small additional premium. But if you are determined to supply your coverage with extra policies against a number of potential perils which you think worth adding, there is an important note to make. Personal Property Coverage can be increased if there is an urgent need to extend the limits of coverage, but it usually cannot be decreased.
If you choose this coverage it is advisable to make an inventory of personal property items supplying it with the necessary descriptive information. As a precaution keep your inventory in a safe place outside your home and update it on a regular basis. You can also use modern technologies and videotape each room. Whatever option you choose, it will help you not to forget certain items and will surely save you a lot of time in case you face a situation when you are to file a claim. Besides, having such an inventory, you can see if the coverage is what you need and depending on what items of property you are keeping in your home you can adjust your policy in order to secure your belongings.
You should also know that in some cases Coverage for Personal Property can be limited. On average, the limits set by Coverage C vary within the range of 50% to 70% of your Dwelling Coverage amount. Besides, there are certain types of possessions which are typically excluded from Personal Property Coverage or are subject to a limited coverage. It is not surprising. Every Personal Property Coverage sets some limits to the classes of property liable for financial reimbursement in the event of a covered loss in order for the insurer to be able to carry out its financial obligations to the client. Such items as jewelry, gold, silverware, furs, fine arts, collections and coins, antiques, securities etc, can be covered under the contract, though they typically have limits of coverage. However when it comes to business property, recreational vehicles, trailers etc, there are considerable variations in the contracts of this type. To insure valuable items properly, you should add a special endorsement (such as Scheduled Personal Property Coverage) to your policy.
Some items of property can be excluded from the coverage because they are covered by other types of Homeowner's policies. Therefore it is very important to review your policy carefully with regard to the special limits it incorporates.