YOU ASK:

How do I compare contents insurance?

WE ANSWER:

Contents insurance coverage has certain characteristics that need to be taken into account when comparing homeowners insurance quotes. Whether the policy evaluates loss on the basis of actual cash value or replacement cost, what is the personal property insurance amount, which items are not covered: you should ask all these questions and more when comparing contents insurance.

Contents Insurance Comparison: What to Look for

  • Estimate what your personal belongings are worth. Make an inventory of all your possessions and keep it at a safe place: you will need it at claim time.
  • When comparing the contents insurance coverage of home insurance policies, check if the amount allocated to indemnification for personal property is adequate to cover all your possessions. Contents insurance limits are usually equal to 50 to 70% of the coverage amount for the property premises. A policy with higher content insurance limits is always the better choice.
  • Check if the policies you are comparing determine the losses to personal property on the basis on actual cash value or replacement cost. It is of great importance to know the difference between the two since actual cash value pays the amount for replacing an item less depreciation which can lower the price some 10, 20, even 50 per cent depending on the item's age. Replacement cost, on the other hand, pays the current price of the item damaged or stolen, provided that you show proof that you have indeed replaced the item. You are strongly advised to choose a policy with a replacements cost provision or add it as an endorsement to the policy: it adds 10 percent to the premium amount but will pay off at claim time.
  • Exclusions are very important when comparing contents insurance - you need to know which of your belongings are covered and which are not. A number of articles are typically not covered by contents insurance, such as jewelry, furs, motor vehicles, property of tenants, credit cards, etc.
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