Home Contents Insurance
Home contents insurance is one part of a home owners insurance, Condominium Insurance, or Renters Insurance policy.
Contents coverage in an insurance policy protects you in the event that your personal property is damaged, destroyed or stolen by a covered event. Whether it is covered or not depends on the type of Insurance Policy and what is covered in it (what are the named perils and what is excluded?)
Amount of Coverage:
With a condo or renters policy you choose your level of contents (also called personal property) insured. Under a Canada Home Insurance policy this is set automatically as a part of your policy. Limits can be increased if necessary but in most cases they are set high enough.
Inventory of your contents:
In order to determine if you have enough home contents insurance coverage you should take inventory of your possessions and add up the value. This could be surprising for you. Even a single person living in an apartment could easily have more than $50,000 in contents.
Taking an inventory is also a good idea as advance preparation in the event of a claim. When there is an insurance claim many insurers ask for a full accounting of what you own. In other words, just because you have $50,000 in personal property coverage doesn’t mean that you will get a cheque for $50,000! The insurance company needs to be reasonably certain that the amount paid out is legitimate.
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Home Contents Insurance coverage should be on a Replacement Cost valuation (RC). Not an Actual Cash Value valuation (ACV). ACV takes depreciation into account where Replacement Cost replaces the old item lost with a brand new item.
Special Limits of Coverage:
Watch out for the special limits of coverage. There are limits in the policies for certain personal property insured. Common limits are for jewellery, collections (i.e. coins, comic books, and stamps), antiques, fine china, silverware, works of art, money, stock certificates, firearms, tools used for work, sporting equipment, and so on.
It is important to review this part of your policy to ensure that you have enough coverage for these valuable items. If you don’t it is possible to schedule them on the policy to an appropriate limit. It just requires proof of their value (a recent appraisal and or a recent invoice) and an extra premium. Often a lower deductible will apply to a scheduled item than to the rest of the policy.
Personal property is a valuable possession and you should take care that it is properly insured.
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