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An Introduction to Contents Insurance

By Edited Jun 22, 2015 0 0

What sorts of material things do you have? You may own high value real estate property or perhaps costly automobiles, but what if you have other sorts of expensive property and you wish to make sure you are financially protected if those items are lost? This is where contents insurance coverage shows its value.

Contents insurance is sometimes offered as a component of a larger "package deal" insurance plan that affords coverage for homes, possessions, added costs and liability protection. In those policies, the contents protection is frequently viewed as an afterthought and is just given a dollar value according to a percentage of some other coverage line. For example, within a home and contents insurance policy, the contents protection is usually 75% or 80% of the amount of coverage on the building.

In other instances, the contents section is among the more necessary elements of insurance coverage, such as in a tenant's policy. In other cases, the contents detailed in the protection plan are the only limits that apply.

For Homeowners

In a homeowner's protection plan, the contents coverage is commonly described as Coverage C, since it generally follows Coverage A - Building, and Coverage B - Other Structures. Under Coverage C the limit amount is usually a portion of Coverage A. You should think of the type of losses which are addressed under Coverage C. Normally, this section of the plan will pay for losses attributable to specific, named perils, no matter how the building may be covered. An improved coverage plan for contents would be regarded as an "all risk" protection plan, or one that covers all causes of damage or loss unless they are omitted. In one case, only the listed causes of loss are covered, while in the wider form everything is covered in the policy first, and then an evaluation must be done of the exclusions to determine if a claim will be paid. These policies are usually available at extra expense.

For Building Owners

An enterprise operator would likely consider building insurance on a commercial property policy, or business owner's policy (BOP). This section of coverage is called Business Personal Property (BPP) and the limitations for this insurance coverage will often be established by assessing the value of all of the tangible property owned by the company, with the exception of real estate or vehicles.

For Tenants

If you're renting a home or apartment, you will want to consider a tenants insurance policy which usually looks a lot like a homeowner's insurance plan except it lacks Coverage A or Coverage B. These insurance policies are generally written on a named-perils basis as described above. Deciding on the degree of coverage must be a careful judgement for a renter's plan, as it is sometimes challenging to precisely establish the value of all of your personal possessions with an educated guess. Many people that undertake a home inventory with values allocated are surprised at the amount it might cost to replace all of the possessions if they were lost in a disaster.

For Landlords

Landlords owning rental property can also obtain a landlord insurance policy for things they may own and keep within their rental property. This can include fixtures and appliances, or it may just provide coverage for things that are stored on the premises.

Contents insurance is an important insurance purchase. Particular items can be costly to replace when you consider that a lot of your possessions are acquired over a lengthy period and by different means. If it was all destroyed at once and had to be replaced suddenly, the economic burden could be overwhelming.



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