Understanding Personal Property Limits For Home Owner’s or Renter’s Insurance

If you are a day trader, you probably have a few computers and other tech gadgets and software in your home. If you work at home or run your trading business from your home, the number of technology items will go up exponentially. Before something happens it is important to look at your home owner’s policy with an eye to the personal property limits. Then compare how your personal property insurance limits stack up to the reality of the technology and other higher ticket items in your home.

What is Personal Property Insurance?

Your homeowner’s insurance policy covers several insured areas. Some of those areas include:

·         Structural Insurance that covers damage to the home’s structure,

·         Liability Insurance for accidents that happen on your property,

·         Personal Property Insurance that covers the items filling your home.

Personal Property Insurance covers your possessions. This is for things that belong to the homeowner or to others that live in the home. Your homeowner’s policy will list your Personal Property overall payout value. This is the amount that you would be paid if you lost everything inside the home if there was a fire, or robbery and everything was cleaned out. If only some specific items are taken or damaged, like for instance your computers, there are specific limits to what the policy will pay.

Personal Property Limits

Do you even know what the limits are on the personal property coverage for your home insurance policy? Take a minute to look through your policy, and then do a quick tour of your house. If you have a video camera, use it to capture everything that is visible. Then download a copy to your offsite data storage. This would be handy if you ever have to file a claim. As you look around, make a list of the TVs, and their type, the Wii, the computers, digital cameras, printers, Blackberry’s, and IPods, etc.

Home Office

If some of these things are for your home office, write those on a separate sheet of paper. Make sure you add in office furniture, and supplies, as well as items like paper shredders, flash drives, and even the extra printer ink you keep on hand.

Now ask yourself these questions:

·         What would fire or water do to your business files?

·         If something happens to all that stuff…can you work?

·         How long would it take to get up and running again?

·         Could you replace everything with the standard home office personal property insurance policy that covers up to $1000 for a home office?

I’m betting the answer is no to the $1000. But that is the average amount of standard coverage for the items that are used as part of your home office if there is a loss. There are riders that can add to this amount. But you will need to talk to your agent, take an inventory of the items you utilize for your office and don’t forget the furniture and supplies. These small items can add up quickly if you keep large quantities of items like printer cartridges and reams of paper.

If your home office is heavy on technology, you made need a computer rider, as these items are restricted on the payoff value. It’s important to talk to your agent and figure out what you have, and what you might need, just to cover the home office.

Other Needs

Remember the Personal Property amount is supposed to cover all the pots and pans, appliances, clothes, furniture, and everything that isn’t part of your structure. Don’t forget to think about jewelry, art, antiques, all of the things that you own that you would have to replace with the dollar limit on your policy.

Replacement VS Actual Cash Value

As you read your insurance policy to see what your personal property coverage limits are, pay close attention and figure out if your personal possessions are covered with the replacement, or actual cash value. This can make a big difference in actually being able to afford replacing everything. For example, the actual cash value might be less than a $100 on that three year old computer, but it could cost you over $700 to replace it. Make sure you know what your insurance policy provides, and how it would cover all of your personal property, especially the property that allows you to make a living.