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Home Insurance

How Much Would it Cost to Replace Everything You Own?

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 home.
  • 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
Company A $14.08 $14.08 $17.50
Company B $15.08 $16.25 $17.42
Company C $15.08 $16.25 $17.58
Company D $15.08 $17.50 $18.92

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.