Know what you own with a home inventory
If you had to make a home insurance claim, would you be able to list all of your possessions, down to the make, model number and value? A home inventory is an easy, inexpensive way to help you keep things in balance – it simplifies a claims experience and helps ensure you have the right amount of coverage for your contents.
Walk through each room in your home, including your garage and/or patio, and make a detailed list of your valuables. If you choose to make a list on your computer, remember to store a version somewhere else in case it’s lost or stolen. For example, create a folder on a cloud drive like OneDrive or Google Drive.
Take pictures of each item. Include pictures of serial and model numbers that can be hard to reach, like the back of your TV. You could also use your phone to record a video walk-through of your home, verbally describing items as you go.
Keep copies of important documents, including receipts, appraisals, warranties, proofs of purchase and serial numbers with your inventory. Ideally, store everything in a safety deposit box or other secure place away from the house.
What are you actually covered for?
When you buy a Home insurance policy, you may be given the choice of insuring your property at replacement cost or actual cash value. These two different calculation methods are used to determine how much money you would receive to cover an item if it’s lost or damaged.
Let’s look at an example: your 10-year-old TV gets stolen. If you have a replacement cost policy, your claim payment is based on the cost of buying the same TV, of similar kind or quality, brand new. There’s no deduction for depreciation.
If you have an actual cash value policy, your claim payment is based on the cost of buying another 10-year-old TV in similar condition to yours at the time of loss. Depreciation is factored into your payment.
What about my home’s market value?
Replacement cost is different from the market value of your home. If you were to lose your home in a fire, a claim based on replacement cost would cover the actual cost of the materials and labour needed to rebuild your home. Your lot is not covered, just the structures.
Remember to review your Home insurance policy with The Co-operators each year to make sure you’re covered for the full value of your home and its contents.