When you're considering insurance for your residence, there are lots of different terms you need to understand, such as "personal liability" and "actual value vs. replacement cost." But, the good news is that some of the terminology used, like contents insurance, is actually very easy to understand.
"Contents insurance" typically refers to coverage for property you own. Call it your stuff, your treasured belongings, your priceless valuables, or whatever you want. With personal property protection, you're basically covering the personal possessions that you keep in your home. It can include everything from your laptop computer to your wine collection, and from your refrigerator to your wardrobe.
What's the benefit of insuring your personal possessions? If you live in a rental home or an apartment and disaster strikes, your landlord is already covered for structural damages. But, what recourse do you have if everything inside your rental is destroyed or severely damaged? The insurance policy that your landlord has on his or her property won't cover these things. As a tenant, it's your responsibility to take out an insurance policy that will reimburse you for what you own if it were to suddenly go up in smoke or suffer severe damage as a result of a storm. Personal property protection even protects you against theft, and is an investment you should strongly consider if you're as attached to your belongings as the rest of us are.
Before you buy personal property insurance, take an inventory of your belongings. One of the simplest ways to perform a home inventory is to walk through your house or apartment with a video camera and give a brief description of the things you own that are the most valuable—like your big-screen TV, computer, antique furniture, major appliances and other pricey belongings. You can also use the Allstate Digital Locker tool to catalog the items you own. Once you have the list, it will be a lot easier for you to figure out how much coverage you need. And, it may help if you ever need to file a claim.
Next, you will need to decide between Actual Cash Value and Replacement Cost coverage. Both of these sound similar, but there's actually a big difference between the two. When you get personal property insurance, you may have the option to select one or the other. In the event of a claim, Actual Cash Value coverage factors in depreciation and pays what you'd expect to receive for your belongings if you sold them today. Replacement Cost coverage pays the cost to replace your item with one of the same kind. For example, you might have paid $500 for your stereo system 10 years ago, but if it gets destroyed as a result of a covered disaster, you'll be reimbursed for whatever it costs you to find a matching replacement. If you had Actual Cash Value coverage, you would only be paid what your stereo is worth today, which may not be much. Most of the time, Replacement Cost coverage comes with higher premiums, but you may find it to be well worth every penny.
You also may want to increase the coverage on your valuable belongings. If you own any precious jewelry, expensive electronics, rare coin collections or anything of high value, you may have the option to increase the amount of coverage so that you're adequately reimbursed if they're lost, stolen or destroyed. You can choose to get increased coverage for individual items, or you can choose to boost your level of coverage for groups of items. It all depends on what fits your needs.
As you can see, you have plenty of options when it comes to insuring your belongings. To learn more about Personal property protection or to get the ball rolling on obtaining coverage, get in contact with an agent near you.