Over the years, we accumulate a lot of personal belongings which may be worth more than you think. Should they become lost, stolen, or damaged, you’ll want to make sure you have the right personal property insurance to help replace them.
However, it can be confusing to determine how your personal belongings are protected by insurance. We’ll discuss what personal property insurance is and how covered losses impact your coverage so you can choose the right insurance.
What is Personal Property Insurance?
Several coverage categories exist within the scope of homeowner’s insurance. Personal property insurance falls under “Coverage C,” which protects the items in your home – like furniture, clothing, electronics, and jewelry – from covered losses like theft or fire.
However, what is covered depends on your policy.
What are Covered Losses, and How Do They Affect Insurance?
Covered losses are the hazards your insurance policy states it will provide coverage for. An insurance company will not cover losses which are not listed in your policy. For example, if your policy states fire damages as a covered loss, your provider is responsible for covering any items damaged by a fire.
How your personal belongings are damaged or lost is the biggest deciding factor in whether your insurance will provide coverage. Knowing whether your policy is open or named before purchasing insurance can make the difference between receiving coverage or nothing at all.
Personal Property Insurance Policies: Open Peril and Named Peril
Personal property coverage is typically provided in the form of a named or open peril policy. What does this mean?
A named peril policy only covers damage to your items from something explicitly listed in your policy. For example, if your wedding ring is stolen during a burglary, you will likely receive coverage if burglary is listed in your policy as a covered loss. However, if you accidentally misplace your ring, it likely will not be covered if it’s not listed in your policy. For high-value items such as a wedding ring, you’d be better off purchasing insurance with an open peril policy.
An open peril policy is a better fit for those who find a named perils policy too restrictive. This type of policy has no restrictions on the type of loss covered by your personal property insurance unless specifically excluded. You can decide to add an open perils policy in the form of scheduled personal property insurance. For example, if you were to schedule your wedding ring it would be insured for all risks and receive full-value coverage.
Taking Action: Getting the Right Insurance
Creating a home inventory of your personal belongings is a critical step in ensuring you get the right type and amount of personal property coverage. By understanding what you own, you can decide how much coverage you need and whether your insurance policy should be open or named. An inventory will also help you keep track of lost or damaged belongings in the event you should need to file a claim.
To learn more about personal property insurance give us a call at (877) 229-2244 or get a quote.
