If your residence burned to the ground and you lost all your
belongings, would your insurance policy provide you with enough
coverage to replace everything you own?
Many property policyholders are underinsured. When you apply for
a property insurance policy, you set your own policy limit for the
contents of your home based on what you estimate it would cost to
replace everything inside your residence. It is easy to save a few
dollars off your premium by reducing your coverage, but you could
end up taking an unnecessary hit to your personal pocket book.
Review your coverage
When you select your contents coverage,
take a moment to review your policy and ask these very important
questions to ensure you have adequate coverage.
- Look at the value you have listed as the
total worth of your belongings. Is that all the money you need to
replace every item you have inside your home?
- Make sure you are factoring the cost of
your belongings at today's prices, not what you paid for them when
you bought them.
- Have you considered the value of your
wardrobe, your kitchen utensils, your furniture? Even small
appliances like radios, clocks, blenders and hair dryers? Are these
included in your estimate? Your insurance does not just cover large
items of great value, but it covers almost every item in your
- Do you have items in your home that are
worth more because they are antiques or are one-of-a-kind
irreplaceable valuables? If so, you'll want to list them on your
policy with an appraisal certificate to make sure you are
compensated for their true market value.
- Does your policies place coverage limits
on certain items? Many providers have these limits set for
jewellery, furs, bicycles and computers. If the standard coverage
level is not enough for you, there are usually options you can add
to your policy to make sure you are adequately protected.
More coverage = more cost?
It only costs a few dollars a month to
increase the contents coverage levels on your property policy. Take
a look at these rates for contents coverage in a Toronto
condominium, for a 40-year-old with no prior claims:
|Named-perils contents coverage||$30,000||$35,000||$40,000|
When you're shopping for property insurance, make sure to ask
each company about their included coverage levels. There are a lot
of differences from policy to policy, and price is not always
indicative of the coverage offered.