Discussing how much personal property coverage you need can be, well, personal. It’s important to take an honest inventory of the items you own and how much it would cost to replace them. It also helps to know how this inventory impacts your premium.
How Much Personal Property Insurance Do I Need?
Some homeowners opt to only account for their “high impact” items: think TVs, furniture, computers, and so on. Others want to account for clothes, decorations, and the other things that would be lost in a total disaster. Often, the premium increase is negligible, so it’s worth the peace of mind to cover all of your belongings. For most Kin policies, an extra $25,000 in coverage adds only $30 to your annual premium.
Personal property coverage is often calculated as a percentage of your home’s replacement cost, which is defined by your dwelling coverage.
The minimum coverage allowed by most companies, including Kin, is 10 percent of your home’s replacement value. If your home would cost $200,000 to rebuild, this gives you a minimum of $20,000 in personal property coverage.
Replacement Cost, Replacement Cost, Replacement Cost!
In evaluating a policy, it’s important to read the fine print. As it pertains to personal property coverage, make sure that the policy covers your goods at replacement cost. This means that your TV will be covered at the amount to get a new, similar TV. The alternative, actual cash value, covers the TV for the amount it’d go for on eBay. This can be a big difference and is a very unwelcome surprise when it comes time to file a claim. All of Kin’s policies cover you at replacement cost.
Can I Opt Out of Personal Property Coverage?
With an exclusion form, most homeowners insurance companies will allow you to opt out. This protects the carrier from homeowners that might take legal action if, in the event of a total loss, they find that their personal property is not covered. If you want to lower your home insurance premium, there are certainly more advisable ways to do it.