Coverage C - Personal Property
Personal property coverage provides reimbursement for personal property that is damaged in an insured loss. This would include items like: furniture, televisions, computers and jewelry. As with detached structures, the personal property limits are usually set a percentage of Coverage A (40%-60% is common, depending on the carrier).
There are two significant considerations when evaluating your personal property coverage:
1) Replacement Cost - Generally, a homeowner's policy will only pay for the "actual cash value" of your personal property at the time of loss. The "actual cash value" calculation uses depreciation (loss in value over time) to reduce the money you receive to replace the item. For example:
You buy a home in Orland Park, Illinois and purchase a television in 2012 for $400 for your new living room.
In 2014, lightning strikes your home, causes a power surge and destroys the television.
Your insurance claims that the television depreciated $200 over the two years you owned/used it and only pay you $200 for the loss.
This problem can be remedied with a "Replacement Cost Endorsement", which will pay the amount needed to replace the destroyed property.
2) Specific Limits - Generally, a homeowner's policy will have limits for specific types of property (i.e. jewelry, furs, guns, computers, collectibles, cash). Here's an example:
Your New Lenox, Illinois home contains 15 pieces of jewelry worth $100 a piece. ($1,500 of total value)
Your home has a fire and all of your jewelry is destroyed
The personal property portion of your homeowners' insurance policy limits jewelry damages to $1,000.
You would would only received $1,000 towards the loss of your jewelry collection.
Make sure to inform your insurance agent of these type of high-value items to ensure they are covered under your policy.
In some cases, you may want to insure a specific item through a Personal Articles or "Floater" policy, give us a call to discuss.