Many homeowners simply assume that their valuables are protected from loss or theft by standard clauses in their home insurance policies. In reality, things aren’t always so straightfoward. Consider this story about a Markam, Ontario couple who were the victims of a Christmastime house fire in 2013 as a cautionary tale of what can happen if you aren’t proactive about maintaining the proper levels of protection. As a general bit of advice, you should always do your due diligence and make any necessary changes to your coverage leading up to your annual policy renewal.
The Importance of Reporting Valuables to Your Insurance Company
First, you should always report major new purchases or acquisitions to your home insurance provider. A good general rule of thumb is this: if you’ve added something of significant value to your home since you last reported its contents to your insurer, be sure to tell your provider. If you’ve never submitted a comprehensive list of your valuables, you should do this as soon as possible.
There’s no telling when a theft or accident might take place, and if you have not declared certain valuables, they may not be covered. All Alberta home insurance policies offer a minimum level of coverage for items of value contained within your home, but if the actual value of those items exceeds the limits of your policy, you won’t be protected for the balance. If these items are stolen, damaged, or destroyed, you may be forced to shoulder the gap between your coverage limit and their replacement costs out of pocket.
ACV vs. Replacement Cost
When purchasing or updating coverage for the valuables in your home, you’ll encounter two key terms: actual cash value (ACV) and replacement cost. It’s vital to understand the difference between the two, as they may affect the type of coverage you choose under certain circumstances.
Actual cash value refers to the market value of the items in your home. It is calcuated by taking the original purchase price, then adjusting for appreciation or depreciation. In other words, it provides for the reimbursement of the item’s value, calculated at the moment at which it was lost.
Replacement cost is slightly different, offering a more inclusive type of protection. It looks at the amount of money you would have to spend to replace an item, accounting for appreciation but not depreciation.
How to Inventory Your Valuables
To prepare a list of valuables for submission to your insurance company, it’s important to create a visual record of your belongings in addition to a summary of their values. Start by going through your home room by room, making a list of all the valuables contained in each space. Consider the following types of assets:
- Furniture
- Clothing
- Electronics
- Computers and computer equipment
- China and silverware
- Antiques and heirlooms
- Jewellery
- Tools and construction/maintenance equipment
- Appliances
- Collectibles
For each item on your list, record the purchase date, purchase price, current date and current value of the item on an index card. Then, use a digital camera to photograph the item, and include the index card in the shot. Make sure that the details contained on the index card are legible in the photograph. As an alternative, print out hard copies of the photos you take and record the item information on the reverse side of the picture.
Here are some other helpful inventory tips to keep in mind:
- Place family members in photographs to support your ownership claims
- Use dark cloths to serve as the background in the photos
- Take several photos of particularly valuable items, documenting any pertinent details which substantiate its value
When you’re finished, prepare an itemized list of all the items in your home to submit to your insurance company, along with a running total for their cumulative value. Make secure copies of your photos and the information contained on them, then submit one set of photos along with your itemized list to your insurance company. Always retain identical copies of everything you submit.
Home Insurance Alberta: Trust Lane’s for All Your Coverage Needs
Lane’s Insurance is a leading provider of home insurance in Alberta. Our brokers work for you, not for the insurance companies, so you can be sure we’re always working to protect your best interests and provide you with the best available coverage at the lowest possible rates.
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