Whether you are a homeowner, renter or business owner, it is likely that you have an insurance policy that lists a limit for what is often referred to as contents. You may have heard me refer to “the items that would fall out if you turned your building upside down.” So, by inference, anything that is affixed to a building is typically part of the building coverage, and if it is not, it is often considered personal property from an insurance standpoint. So, when you look at that amount on your policy, you should be asking whether it is really enough to replace all of your items at today’s costs? A few large purchases can skew the limit and may require you to review it. It’s easier than you think to overlook this value and consider its adequacy.

For individuals and families, you might underestimate the value of all of your clothing and shoes, or the sports equipment in the garage. For business owners, you might not consider the laptops, samples and other equipment that is at your employees’ homes. These are common oversights as we them over years and the total value can add up over time. So, once you gut check the overall value, are contents created equal in policies or are there items that are not completely covered within the limits? In all policies, the answer is that all contents are not equally covered! Do you know what those limits are?

Examples where there are sub-limits in policies that limit the value of some items range from jewelry, collections of coins, silverware, and in some policies, items considered fine arts. Contents at other locations are also limited on individual policies; so, you can’t dip into your contents coverage at one home for another without limitations. In business policies, the type and location of items is sometimes limited. Who owns items can also determine the extent of coverage – for example, items owned by a dependent child at college are typically covered, but items of an adult child residing elsewhere are usually not protected unless insured separately. Business property in your home may have some coverage under your home insurance, or it may be included in your firm’s policy.

Taking the location further, knowing the scope of coverage if traveling is important. Do you have worldwide coverage or is it limited? If you lose an item is it covered or does it have to be stolen? What happens if luggage is lost? Like transit coverage, there are significant limits from the airlines or freight handlers so you typically cannot rely on them to make you whole for the replacement cost of items.

Another important factor is understanding what are the likely types of loss that can happen to your personal property and reviewing if the outcomes are covered.

Some examples:

• A piece of jewelry with precious stones can have a stone fall out, but the setting still being on your finger. That coverage may be different than if the item is stolen.
• An oil painting may be damaged if the hanger breaks and it falls to the floor. Or the value could be diminished if someone cleans the item incorrectly and causes damage. The intrinsic value protection or restoration can be different than some physical losses.
• Laptops and other equipment stolen from a parked car are typically not covered by auto insurance, but subject to the coverage and deductible for the personal property, if there is any.

As the replacement value of items has increased recently, it is a good time to take stock of what you have, estimate the value, and review and understand your coverage limits. The Magis Team is here to assist you. As always, questions are welcome, and we would be happy to discuss your particulars and explore the best way to provide the finest combination of coverage and cost.

Understanding the components of your insurance program is always important, perhaps now more than ever.