FRIDAY, DECEMBER 1, 2023
When insuring possessions on homeowners insurance, you have a lot of leeway to choose the limits you want. Yet, the thing about possessions insurance is that your coverage might restrict how much it will pay for items of value, like your electronics. When thinking about the value of these items, take a few extra steps to choose the right policy limits.
What Electronics Do You Own?
Some electronics you want to make sure you insure. The best way to not forget an important item is to make a list. Go from room to room of your home and make note of:
- Computer equipment (including printers and scanners)
- Tablet computers
- Mobile phones
- Televisions & DVD players
- Stereo systems
- High-end security systems
- Cameras
- Smart-Home devices
Once you know what you have, you can begin to gather information on the items’ values. You can also decide which items to insure and which to skip.
Determining Value
When determining an electronic item's value, checking the receipt is a good place to start. If you don't have the receipt, you might check the current market value of the item or have it appraised.
Most electronics have two values. First, there is their sticker price, which is the cost of the item when you bought it. Second, there is the item’s cash value. As you use items, they age or newer models enter the market, the cash value will drop below the new-item value.
Getting the Right Coverage
There are some restrictions that your homeowners policy might apply to possessions coverage:
- The policy will only pay up to its limit for all possessions claims. So, if you have $100,000 in possessions coverage, then you will only recover a maximum of $100,000. That’s why it is important for you to accurately estimate the value of all belongings.
- Most policies will only pay you the cash value of a damaged item at the time of the loss. Therefore, you might not recover the full cost of a new item. When appraising electronics damage, this might make a big difference in settlement costs.
- Some policies place a sub-limit on items like electronics. Though you might have $100,000 in total coverage, you might only be able to recover $10,000 for electronics. Deductibles will also apply. Always check your policy to see if these limits exist.
To get adequate coverage for important electronics, you might be able to request full replacement cost coverage instead of cash value coverage. Additionally, you might also be able to schedule a particular item on your home's coverage. By scheduling an electronic, you can apply a direct limit specifically to that item. You’ll receive guaranteed compensation for the loss as long as the damage was not excluded by the policy.
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