What is Contents Insurance
Photo by Alberto Castillo Q. on Unsplash
According to Elvis Presly, Home is where the Heart is! In addition to the heart, home is also where most of your personal belongings are kept. For this reason, there is a specific insurance coverage for personal items called Contents Coverage or Personal Property Coverage. This type of insurance coverage is offered on Homeowners Insurance, Condo Insurance, and Renters Insurance policies, in addition to flood insurance polices for all types for living arrangements.
Contents coverage refers to all the personal property in the home that is not affixed or attached to the building structure, therefore there is a wide variety of items covered by this insurance limit. The most common items that may come to mind are electronics and furniture, but everything from cooking ware to clothing can also be included under contents coverage.
Contents insurance helps pay to replace or repair these personal belongings if they are stolen or damaged by a covered peril. So, if someone breaks into your home and steals your laptop, or your clothing and furniture are ruined in a fire, you may find that contents insurance helps cover the loss.
Due to the broad nature of the coverage and the sheer amount of personal property that families can accrue over the years; it is important to make sure that you are properly insured for these items on your policy. Homeowners Insurance and Condo Insurance address the limit of coverage for contents or personal property under Coverage C of the policy. Insurance carriers often default the value of the personal property coverage as a percentage of the total value of the home, so it is recommended to review the value of your personal property and discuss this coverage amount with your agent when acquiring your home insurance policy.
Replacement Cost vs Actual Cash Value
A less conspicuous component of the contents coverage on your insurance policy is the valuation type that is provided. Generally, personal property or contents coverage includes a default valuation called Actual Cash Value or ACV. This ACV coverage type usually reimburses you the cash value of your insured contents when they are damaged by a covered peril, however the claim amount factors in depreciation of these items.
Actual Cash Value coverage can considerably decrease the amount of coverage you have for your older items. For example, if your $1000 laptop was damaged in a fire and it has reached half of its useful life, then you will only be awarded $500 towards the purchase of a new laptop of similar likeness.
The better alternative to include on your insurance policy is Replacement Cost coverage for your personal property and contents. Replacement cost coverage helps reimburse you for the full cost of the damaged item so that it can be replaced with one of similar type and quality.
Review with an Agent
It is always important to take an inventory of your personal belongings and discuss the values with your insurance agent. In addition, it is always recommended to include replacement cost coverage for your contents to make sure that you are fully indemnified in the event of a claim. Reach out to a qualified Moore Resources Insurance Agent for more information on contents coverage or to discuss the personal property coverage that is right for you!
Moore Resources is an Independent Insurance Agency located in St. Petersburg, FL and offering Homeowners Insurance, Auto Insurance, Personal Insurance and Business Insurance. Our reach extends beyond the Tampa Bay area to the entire state of Florida. Moore Resources has regionally been dedicated to serving the local residents of Pinellas, Hillsborough, Polk, Pasco, Manatee and Sarasota counties; including St. Pete, Tampa, Clearwater, Bradenton, Brandon, Dunedin, Gulfport, Lakeland, Largo, Lutz, Palm Harbor, Pinellas Park, Riverview, Ruskin, Seffner, Seminole, Temple Terrace, Tierra Verde, Town n Country, and the Gulf Coast Beaches.
The purpose of this blog is to present general information only. It does not interpret specific policies or coverage. In order to obtain detailed information regarding your insurance, contact a licensed insurance agent.
