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The Cost of Replacing Everything You Own
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How to make sure you’re covered
If all of your possessions were destroyed in a fire overnight, do you know what it would cost to replace everything?
People often underestimate the contents of their home. And chances are, if you don’t have an up-to-date inventory of your belongings, you would have a hard time remembering details about what is missing in the aftermath of a loss.
The following simple guidelines can help ensure that you maintain an up-to-date list of your possessions and sufficient coverage to pay for the cost of replacing them.
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Take inventory
Keep a record of your belongings and their value, and make sure to update it. Here are some ideas:
- Take photos of your possessions: digital cameras make it simple.
- Use a video camera to make a room-by-room record of your possessions.
- Back these up with a written list, or audio recording, which can include more detail about makes, models, serial numbers or other useful information.
- Keep receipts for all major purchases.
- Revise your inventory whenever a big purchase is made, and update it at least once a year.
- Make sure to store your inventory in a secure place away from your home – a safety deposit box, for example.
Tip:
- Use your annual policy renewal date as a reminder that it’s time to update your inventory.
Review your coverage
The initial policy limit you choose for the contents of your home is based on what you estimate it would cost to replace your belongings.
- Over time the cost of replacing your belongings is bound to change.
- You get rid of some items, acquire new ones, or may have existing possessions, like antiques, that appreciate in value.
- To ensure you have adequate coverage for the contents of your home, you should review your policy at least once a year.
Here are some questions to ask:
- Does the total estimated value shown in your policy reflect what it would cost to replace everything in your home today?
- Have you factored in the cost of replacing your possessions at today’s prices?
- Have you accounted for the value of items like furniture, clothing, kitchen supplies, laptops and items like air purifiers, iPODs, MP3 players, games and electronics (Playstations, Wii consoles, etc.)?
- Are some items worth more because they are antiques or irreplaceable valuables? If so, they should be included in your policy with an appraisal certificate.
- Are there coverage limits in your policy on things like jewellery, bicycles and computers? If the limits are not sufficient, consider adding options to make sure you are well protected. See Beyond Basic Coverage in the “Home Insurance Basics” section for more information.
The idea of saving a few dollars on your premium by reducing coverage can be appealing in the short term. But in the event of loss, it could end up costing you a great deal. For a few extra dollars a month, you can ensure you have the coverage you need when it matters most.
Tips:
- Don’t under-insure or over-insure your belongings.
- When updating your inventory, don’t forget to include taxes.
- If you realize that the value of your possessions exceeds the value listed in your policy, don’t wait until something happens: make sure to amend your policy promptly.
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