Even with ‘good’ home insurance, how does coverage cover the costs of all of those ‘little’ items that add up?

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Asked August 26, 2013

1 Answer


A "good" homeowner's insurance policy will include standard coverage and will usually be supplemented by flood insurance, additional personal property coverage, and perhaps an umbrella liability policy in case of a major liability claim. Additionally, you may add riders such as a laptop rider or personal lines coverage for expensive valuables that are better served by being insured separately.

The hardest part of a personal property claim in home insurance is to be able to prove ownership, cost, and item condition. To simplify this, many people use a video home inventory. Simply use a video recorder and go from room to room, filming every piece of property you have in the room, in the closets, and on the walls or ceilings. Remember, this inventory will demonstrate the possession of all that everyday cheap stuff that adds up as well as your prized possessions, so take the time to include everything, inside the home and out.

Keep receipts. Whether you are purchasing a $900 computer or a $5 dimmer switch, file your receipts away along with copies of the warranties and pictures of the items. If you have to file a claim later, your home inventory couples with your receipts will give you the best chance of getting all of your property replaced, so long as you stay within the policy limits.

In home insurance, you are only allotted around 10% of the policy value for your personal property coverage. Since many families have a great deal of personal property, these limits often need to be reinforced with a supplemental personal property policy or simply an additional property value rider on your homeowner's policy.

Finally, make sure that your home insurance policy will pay for replacement cost, not actual cash value. Items begin to depreciate over time, and an actual cost policy could leave you with only a small portion of the actual cost of your lost property after the fire. Full replacement cost coverage will cost a little more on your premiums, but it will save you thousands of dollars of out of pocket costs if you have to file a claim for total loss.

Answered August 26, 2013 by Anonymous

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