Take a moment to picture all the belongings in your home. How much do you think they’re worth? How much would it cost to replace each item? If you’re like most Canadians, you’d likely be surprised at the total value of your possessions. It’s important to know what your belongings are worth when insuring them through your homeowners, condominium or tenant insurance policy so that you don’t end up being underinsured or paying a higher premium than necessary. Here are a few tips on how to calculate the worth of your home’s contents, and why it matters.
The little things add up
When you start adding up the total cost of all the items in your home, the sum might surprise you. For example, look at the items in your kitchen. You might immediately think of big appliances like your refrigerator and stove which are worth hundreds of dollars, but the small items add up too. A nice set of pots and pans could be worth up $350, and your smaller appliances, dishes, glassware, mugs, knives, and other kitchen utensils are likely worth a pretty penny as well. When all is said and done, you probably have around $4,500 worth of items in your kitchen alone!
The bedroom is another room that likely has quite a few items of value. A new mattress alone can cost $1,000, not to mention your bedframe, sheets, pillows, and bedspreads. Another area frequently underestimated is clothing; to replace your entire wardrobe full of shirts, shorts, dress shirts, dresses, suits, blazers, purses, shoes and more, it could cost thousands of dollars! Of course, the quantity of clothing and other items can vary widely from person to person, which is why it’s important to take inventory of your unique belongings.
Why do I need to know what my stuff is worth?
Knowing the value of the contents of your home is very important when choosing how much coverage you want to include in your condominium or tenant insurance policy. If you overestimate the value of your belongings, you’ll end up paying a higher premium than necessary, and if you underestimate their value, you won’t have enough coverage to replace your belongings if they’re damaged or destroyed.
Homeowner insurance is a bit different—instead of choosing your coverage amount, the content amount of a homeowner policy is calculated as a percentage of the dwelling/building amount which is usually adequate. A typical percentage, depending on your insurance company, is 70% or 80% of the dwelling/building. If there would be any concern regarding the content amount, speak with an OTIP broker.
For homeowner, condominium or tenant insurance, you should also make sure that you have coverage for more expensive items like bicycles, art, jewelry and business equipment. Your policy will have a single article limit, which is the maximum amount any article can be worth before you need to add it to your policy individually. The process of adding an item to your policy individually is known as "scheduling.” If you have items that exceed the single article limit, it’s recommended to schedule them separately so that you will be covered for the full amount of each item. If you’re not sure what your items such as jewelry or antiques are worth, it’s a good idea to get up-to-date estimates of their value by a qualified appraiser.
If an event such as a flood or a fire occurs in your home, your insurer will request a list of the damaged or destroyed items covered by your insurance policy. After such a stressful event, you may find it hard to list everything that was damaged and will likely miss some items or details; this means you won’t receive coverage for those items.
Having an inventory of all your belongings ahead of time will help greatly in the event of an insured loss. Instead of trying to remember everything you had in your home and how much each item is worth, you can simply refer to the list you’ve already made.
Creating records of your belongings
If going through every room of your home to catalogue your belongings seems overwhelming, you’re not alone! That’s why there are tools to help you create an inventory, such as the Insurance Bureau of Canada’s personal property inventory form. You don’t have to complete the entire inventory in one day—try spacing it out by doing one room a week, and you’ll have everything inventoried in just a few weeks without being overwhelmed.
These records should ideally include close-up and wide-shot photos of each item as well as the make, model, and date of purchase if you have them.
OTIP has a variety of condominium and tenant insurance options to suit your needs. To discuss coverage options or to make changes to your current condominium or tenant insurance policy, call an OTIP broker at 1-866-561-5559.