While standard home insurance policies offer coverage for the valuable items inside your house, most coverage is subject to limitations. When it comes to home insurance in Calgary, it’s very important that your coverage accurately reflects the true value of your personal property.
All home insurance policies have coverage limits, which represent the maximum value of the claims you are eligible to file. If the valuables in your home are worth more than your policy’s coverage limit, you should update your home insurance. Otherwise, you’ll risk the possibility of having to cover the shortfall at your own expense.
What Is Covered by a Standard Policy?
Most home insurance policies cover valuables in one of two ways:
- Actual cash value. Insurers define “actual cash value” as the amount of money it would take to replace an item, minus any depreciation.
- Replacement cost. If you carry replacement cost coverage, the insurance company will pay you up front for damaged or stolen items, then make up any difference between that payment and the actual replacement cost. The actual replacement cost includes wear and tear on the item, plus depreciation, so a policy holder is taking a risk in this way. As well, with replacement cost insurance, for claims you must usually (a) provide proof of the amount you paid, and (b) have enough insurance to cover the item’s replacement cost.
Homeowners’ policies also contain restrictions on that which are known in the insurance industry as “special limits.” These special limits are tied to a dollar amount, which represents the maximum value you can claim for items that fall under the limitation clause. It is your responsibility to know which items fall under your policy’s special limits clause.
While specifics vary from policy to policy, the following items typically come with special limits:
- Cash, securities and negotiables
- Jewellery (including gems, watches and heirlooms)
- Collectibles (including banknotes, cards, coins, rare books and manuscripts, stamps, etc.)
- Electronics and computer equipment
- Expensive clothing (such as furs)
- Tools and mechanical equipment, components and spare parts
- Sporting goods (including bicycles, golf clubs, etc.)
- Musical instruments
To ensure you have enough coverage, you should review the special limits defined by your policy, then check to make sure that the total value of the aforementioned items does not exceed that threshold. If it does, you should add additional coverage known as an endorsement.
An endorsement allows you to increase the special limits coverage on one or more items, which you must specify. You also need to specify the actual value of those items when you add the endorsement to your policy.
If you work from home, or if you bring valuables home from work, It’s possible that your home insurance policy may not cover work-related items. It’s best for you to discuss your specific situation in detail at renewal time with an insurance adviser to make sure you’re carrying the right kind of coverage.
Home Insurance Calgary: Protect Your Valuables
You should review your home insurance policy annually, and take an inventory of all valuables in your home to ensure that you have adequate coverage. Recommended processes will make things easier for you if you ever have to file a claim:
- Make a list of all valuables, along with any identifying specifics (makes, models, years, sets, serial numbers, manufacturers).
- Take photographs of all items on your list.
- Research the current value/replacement cost of all valuables on your list.
- Place all photographs, receipts and inventory lists in a secure location outside your home, such as a safety deposit box.
Compare the total value of the items on your inventory list to the special limits defined by your coverage. If their value exceeds your coverage, speak to your insurance provider about adding endorsements for specific items.
It’s also important that you take proactive steps to protect your home if you’re going to be away on vacation. The summer months typically bring a spike in home break-ins, as many people are away on holidays for extended periods of time. Discourage intruders by following these important steps.
Home Insurance Calgary: Put Your Trust in Lane’s
Lane’s Insurance is a leading Alberta-baked brokerage. Our professionals work for you, not the insurance companies. We always work hard to protect your interests, providing insurance products for all your needs at competitive rates along with value-added service, complete resources, and comprehensive claims assistance.