When evaluating how well your personal possessions are covered by your homeowner's insurance, pay attention to whether your losses will be paid on an "actual cash value" basis or a "replacement cost" basis. The former will cover just the depreciated value of the property at the time of loss. The latter is preferable, covering what it will cost you to replace the property at a current price. You typically will have to cough up extra to get replacement cost coverage.
Ask how your insurance company will calculate the total value of your personal property. Usually it's an estimate based on the size of your home and where you live. But it may be out of whack with the actual value of your possessions -- you might live in a modest abode, but have very expensive tastes in clothing, furniture, and accessories. Or you may have just purchased a sprawling estate, but it's basically empty because you need to save up for furniture.
Walk through your home and mentally (or in a notebook) add up the cost of your worldly possessions. Then make sure your insurer's estimate is in the right ballpark. If it's not, ask to have the amount adjusted to reflect your own estimate. This will increase or decrease your premium, but you won't be faced with a horrible surprise if you have a loss, and you won't be paying for insurance you don't need. Review this every year or so, to make sure your insurance keeps up with you.
As with renter's insurance, make sure you understand exactly what's covered and what isn't, and to what extent. There are often limits on how much you can claim in various categories (such as jewelry, art, or cash). If this is the case, and you own a lot of expensive jewelry, you should purchase additional coverage. And make sure you document your possessions so you can prove your loss.
Learn more about insurance in our Insurance Center. You may not have thought about some kinds of insurance, such as disability or long-term care insurance, but they're vital for many people. Take a little time to learn more and you may be very happy you did, if some calamity occurs in the future. You can also discuss insurance matters on our Insurance discussion board -- or just pop in to see what others are saying.
