Building and maintaining an up-to-date inventory of your valuables and personal possessions is a great way to ensure your Calgary home insurance will protect you from the unexpected. Without one, you risk suffering from coverage gaps that may come into play if a theft, extreme weather event, flood, accident or other unforeseen disaster results in the loss or destruction of your belongings.
Every insurance company recommends keeping a current list of all valuable items you would want to claim if they were ever lost or damaged as the result of a covered peril. At minimum, this itemized list should include:
- The value of each item on the list
- A current photograph or video of the item that clearly shows its nature and condition
- Original purchase receipts, whenever possible
Once you’ve compiled this list, you can submit a copy to your insurance company for inclusion in your personal file. Your insurance representative will then have immediate access to reliable, verified documentation that will speed up the processing of your claim and ensure you get maximum value for the items you’ve lost.
Determining the Value of Your Valuables
When you’re listing the value of your itemized possessions, it’s important to understand the difference between “actual cash value” and “replacement value.” These terms are used by insurance companies to determine the degree of compensation you will be entitled to if any of the items included on your home inventory needs to be replaced.
- Actual cash value (ACV) represents the current market value of the item, as calculated by comparing the item’s original purchase price against any subsequent depreciation (loss in value) or appreciation (rise in value). For example, if you purchased a new sofa for $2,000 and it has since depreciated by 50%, it’s actual cash value would be considered $1,000 for insurance purposes.
- Replacement value (RV) looks at the amount of money you would have to spend to replace the item if it were lost or destroyed. Thus, that new $2,000 would cost $2,000 to replace with a new sofa; depreciation does not enter into the equation, though appreciation would apply if the item’s value had increased since you purchased it. In other words, an antique purchased for $1,000 that went on to increase in value to $3,000 would be pegged at $3,000 for replacement value, since that is how much you would have to pay to replace it, given current market conditions.
Generally speaking, ACV is more affordable. It typically costs 10 percent to 20 percent less than a policy that covers replacement value. However, replacement value offers more comprehensive protection, and it’s recommended if you’re insuring items that have the potential to increase in value, or have already increased in value.
Tips for Compiling Your Inventory List
When compiling your home inventory chart, you should begin by making a comprehensive list of all the valuable items you want to cover. Go room by room, adding anything that would be difficult to replace out-of-pocket to the list. Which means that most everything you own that you love should go on the list.
Once you’ve created your list, you should photograph or take videos of each item. Or both. Be sure that the images or videos clearly show the item’s current condition. From there, determine the current value or replacement cost of each item; use ACV coverage if you’re going that route on your policy, or use RV coverage if you’d rather have more complete protection.
If receipts, service records or any other forms of documentation that support the claimed value of each item are available, include them in your package as well.
Finally, make three copies of your list and all accompanying documentation, including photos and/or video footage. Keep one copy in your home; keep another copy at a secure location outside your home, and file the third copy with your insurance company.
Great Rates and Outstanding Service from Lane’s Insurance
As a leading Alberta-based brokerage, Lane’s Insurance offers the lowest available rates on home insurance in Calgary along with the industry’s best claims support and friendly, accessible customer service. Lane’s Insurance is here to help, so if you’re looking for a great price on a home insurance quote or want to save big with an insurance bundle, please visit us online today!
