5 tips for getting a fair insurance settlement for your possessions

Kathryn Hawkins

If you just bought an expensive electronic device, make sure you hold onto the receipt or list the device in your home inventory. Otherwise, if it’s stolen, you could be out of luck when it comes to filing a home insurance or renter’s insurance claim.

That’s what happened this year to Bobbi Jo James of Tampa, Fla. When thieves broke into her home and stole jewelry, electronics and a new $1,500 MacBook, she immediately filed an insurance claim for the damage to her home and the replacement value of her missing items.

But because she hadn’t held onto the receipt or packaging for the new laptop, she wasn’t able to convince her insurance company of the value of her lost computer or other possessions. She was offered only several hundred dollars for her missing valuables, which were worth thousands of dollars.

If you don’t want to lose out on an insurance claim in the event of theft or property damage, follow these five tips for keeping track of your valuables.

5 tips for getting a fair insurance settlement for your possessions
5 tips for getting a fair insurance settlement for your possessions

1. Save your receipts for expensive purchases.

If you’re buying something valuable, such as a TV or computer, always save your receipts, either in paper or digital form. You can use a mobile app such as Evernote to take pictures of your receipts, and take photos of the items to go along with them. If you order items online, you generally will receive digital invoices, so save them in a separate folder online. Store all of your paper receipts in a fireproof safe; that way, you’ll still be able to get to them in case of a house fire or other natural disaster.

2. Create a detailed home inventory.

All home insurance companies recommend creating a detailed summary of all of your valuables, which will make it easier when you have to file a home insurance claims. However, according to the National Association of Insurance Commissioners, only half of all homeowners take such measures. Your inventory should include details such as an item’s serial number, the year it was purchased and the price you paid. You can do this on a spreadsheet or a software program.  The Insurance Information Institute offers a “Know Your Stuff” app that can help you collect the data you need for a home inventory.

3. Make a walk-through video to show all of your possessions.

There’s a quicker way to take inventory of all of your possessions: Go on a video tour of your house, zooming in on all of your valuables. “I suggest to my customers that they do a walk through with a video camera, then save the file digitally and email the video to themselves or save it on a virtual drive so if there is a fire, there is also an electronic record of the personal property,” says John Couture, a State Farm Insurance agent in Maine.

Although it’s advisable to create a home inventory in addition to the video, filming your possessions will help jog your memory if you don’t have all of the details on paper.

4. Pay attention to what your homeowner’s policy covers.

Even if you do have a complete home inventory, you may not be able to recover the full value of your possessions if you need to make a claim. That’s because many homeowner’s policies put limits on the amount of coverage they’ll provide for possessions, particularly for valuables like jewelry and art.

Take a close look at your insurance policy to understand your coverage limits. Depending on your circumstances, you might consider buying endorsements on your existing policy, which will increase your coverage for specific categories such as jewelry. Alternatively, you could buy a specialized policy to provide extra coverage for the loss of your most valuable items.

Depending on your policy, you may be entitled to reimbursement for either “replacement cost” — the cost to buy a new item— or “actual cash value,” which is what the item would be worth in its current condition. If you filed a claim for a 2-year-old laptop on an “actual cash value” policy, the insurer might pay you only $500 or $600, even if the computer cost $1,000 when you bought it.

5. Take your time in settling a claim.

If you need to file a claim to replace the contents of your home after they’re damaged or stolen, your insurance company may quickly hand over a check to settle your claim. But be careful; taking money now may mean that you’re forfeiting your right to collect what you’re truly owed.

If you’ve sustained a significant loss, the consumer advocacy group United Policyholders advises carefully reading any checks and letters you receive, keep an eye out for language that suggests you’re accepting the settlement in full. Consider hiring an attorney or an independent claims adjuster to help you negotiate with your insurance company and determine a fair settlement.

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