Whether you are a renter or a homeowner, it is vital to have a policy that protects your home’s contents. A good way to think of what is protected under a contents insurance policy is to categorize it as anything you would take with you when you move. This includes curtains, decor, and anything else in the home that is portable.
It also includes personal items that you often carry with you, such as electronic gadgets or cash. So what specifics do the best contents insurance policies have in common?
Here is a breakdown by feature of six things that a high-quality and above-board policy should cover. This way, when you sign up for a policy, you know that you are choosing a policy that will protect your belongings.
Total Sum Insured Is Index-Linked
This means that the particularly valuable items that you need to have replaced will be replaced new-for-old (meaning, a new item is provided to you in exchange for the old one that you lost), and the value will be determined based on the index value at the time that you lost the item, not at the time you purchased the item or purchased the insurance.
Total Amount Of Valuables
In a good policy, the upper limit of a total payout for all your valuables should be $12,000 or more. These valuables can include gold or silver watches, television sets and other electronics, jewelry, cameras, computers, etc.
Limit On Single Item Of Valuables
The limit of value on any one single precious item in your home should be at $2,500 or more in your contents insurance policy. If you own a single item that is more valuable than the single item limit set forth in your policy, then you should insure that item under its own policy.
Cash Kept In Your Home
The coverage limit of cash kept in your home should be at least $500 in a good policy.
Freezer Or Refrigerator Contents
If your freezer or refrigerator breaks down (for any reason other than the power company turning your power off), a good policy will cover the cost of the spoiled food, up to $300 or more.
Items Stolen From Outbuildings And In Open Spaces
A great contents insurance policy will cover items – such as garden tools and outdoor furniture – which are stored outside the walls of the home, but within the boundaries of the property. There should be a limit of $500 or more for yard contents, and $2,000 or more for theft from outbuildings.
The best policies will fall within the outlines described here. You may even want to print out this page and turn it into a checklist of sorts as you compare policies.
The most critical thing when choosing any insurance policy is to know what is covered in precise detail and know what you are paying for. Don’t assume that things are covered. Show this list to your insurance broker, and ask him or her to respond to each item with regards to the policy you are considering. This is the best way to make an informed decision!