The days of cinder blocks and wooden plank bookcases are gone. It’s been a long time since the reliable jut rug, CDs (or actual vinyl albums) were stored in milk crates. This is how it is with your first apartment, sometimes also your second and third apartments. This is what you could afford when you first started to own your home. It was kind of fun. Today is a new day and you have paid your dues. You are the king or queen in your castle. It is as luxurious as any model home. The castle has beautiful area rugs and antique furnishings.
Your home and the furnishings that make it up will be the most important investment you make. It is therefore crucial to protect it and any items that can enhance it. This can be done by ensuring that your home and furnishings are covered with adequate insurance.
What is the right amount of coverage?
It is important to determine the coverage required. It is crucial to determine the coverage required. What would you do if Great Aunt Hilda was to stop spinning in her grave, other than to frantically go at it on all fours with Baby Wipes and club soda?
First, if your mortgage is held by a bank on your home, you must maintain adequate coverage for the “dwelling”, the actual structure of your home, for the term of the loan. Lenders recognize the importance of their investment and will require that it is adequately insured. How does insurance coverage cover Great Aunt Hilda’s Persian rugs and other furnishings inside your castle/home/home?
A home insurance agent will likely give you a valuation of your contents if they write a policy. You may be asked by your insurance agent: “How much do your household contents cost?” You may be able to answer this question with another person, but it is possible that you will not feel competent. You may be encouraged by your agent to choose coverage that covers lost items. This will include repair, replacement or cash payment. As most household furniture (other than fine art and collectables) depreciates with time, so might your agent.
What about the two oriental rugs Aunt Hilda left you? You will be expected to value these rare oriental rugs. It’s not so simple. You can’t estimate the cost of a $129 CD player last year, but it’s quite another to estimate the worth of a pair rugs for $5000 each. You are only allowed $1000 per theft for these items when you claim under your Homeowners policy. Therefore, a $5000 estimate for each rug would provide $1000 worth coverage for items that you believe are worth more than $10,000. You may consider adding a Schedule to your Homeowner’s policy to cover such items, if they are worth more than $1,000.
- What is a Schedule? It is a list that lists items that may not be covered by your standard Homeowner’s insurance.
- A Schedule is for everyone. A Schedule could be a great addition to your policy if you have fine art, rare collectables or guns.
- Are Schedules able to cover losses other than those of standard peril? The Schedule covers more items than the standard Homeowner’s insurance. Items on the Schedule include coverage for unforeseeable and accidental occurrences, such as permanently stained rugs with Merlot.
- Is Schedule item included in the deductible? These Schedule items do not have to be deductible.
- How do you add a Schedule on your Homeowner’s insurance? You will need to prove the value of each item on the Schedule in order to include it in your homeowner’s insurance policy. These can be in the form sales receipts, certificates of authenticity or appraisals.
Your insurance agent should help you decide if your household items are worthy of being included in a Schedule. With a little more coverage, Aunt Hilda’s precious rugs might be able to be passed down to the next generation.