If your residence burned to the ground and you lost all your belongings, would your home insurance policy provide you with enough coverage to replace everything you own?

Many property policyholders are underinsured. When you apply for a property insurance policy, you set your own policy limit for the contents of your home based on what you estimate it would cost to replace everything inside your residence. It is easy to save a few dollars off your premium by reducing your coverage, but you could end up taking an unnecessary hit to your personal pocket book.

Review your contents coverage

When you select your contents coverage, take a moment to review your home insurance policy and ask these very important questions to ensure you have adequate coverage.

  • Look at the value you have listed as the total worth of your belongings. Is that all the money you need to replace every item you have inside your home?

  • Are you factoring the cost of your belongings at today's prices, not what you paid for them when you bought them?

  • Have you considered the value of your wardrobe, your kitchen utensils, your furniture? Even small appliances like radios, clocks, blenders and hair dryers? Are these included in your estimate? Your insurance does not just cover large items of great value, but it covers almost every item in your home.

  • Do you have items in your home that are worth more because they are antiques or are one-of-a-kind irreplaceable valuables? If so, you'll want to list them on your policy with an appraisal certificate to make sure you are compensated for their true market value.

  • Does your insurance company place coverage limits on certain items? Many providers have these limits set for jewellery, furs, bicycles and computers. If the standard coverage level is not enough for you, there are usually options you can add to your policy to make sure you are adequately protected.

More contents coverage = more cost?

It only costs a few dollars a month to increase the contents coverage levels on your property policy. Take a look at these property insurance rates for a 40-year-old living in a Toronto condominium with no prior claims:

contents coverage
contents coverage
contents coverage
Lowest quote $110 per year $124 per year $136 per year
Quotes obtained online at Kanetix.ca in March, 2011.

Don't underestimate how much it would cost to replace everything you own. Compare home insurance quotes today.

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