What valuable belongings you should protect and other home insurance tips – No one is prepared for their home to be robbed or burned down, but your insurance should be. Find out if your policy includes the replacement of the most valuable items.
Bicycles, engagement rings, computers, great-grandmother’s silver cutlery… When taking out home insurance, many people forget to do a proper analysis of jewelry and other objects of special value, giving up the possibility of having their costs reimbursed appropriately. against theft or fire. An oversight that especially concerns tenants, whose belongings are not covered by the insurance contracted by the owner of the property.
And the risk exists. According to data from Unespa, the insurance employer, a total of 225,000 home burglary claims were covered between August 1, 2020, and July 31, 2021, out of total data of 15 million homes insured by 28 companies. If we look at the fact that the owners received an average compensation of 1,000+ dollars, barely the price of a laptop, the question is to what extent they compensated the real value of the belongings that they passed on to other people’s friends.
Also according to data from Unespa, around 75% of families have taken out home insurance on their home, the question is whether these policies really fit their needs, especially in the case of loss of those objects of special value. of fire or water.
“We do not have data for the sector as a whole, but in our case, 15% of clients have added coverage for valuables over 2,000 dollars to their home insurance,” explains Juan García, co-founder of Tuio. This insurer with a 100% digital model was born in 2021 and expects to close 2022 with 10,000 clients, insuring 550 million dollars of the continent and objects worth 150 million.
What valuable belongings should be insured?
Among these assets insured by Tuio are rings valued at 12,000 dollars or emerald earrings worth 8,000 dollars, as well as watches worth between 4,000 and 6,500 dollars.
But it is not always easy to know what valuables we have at home. To make a quick approximation, a Tuio study carried out to identify the most valuable belongings can serve as a guide:
- 37% declared jewelry. Of these, 39% were men’s watches, 32% were earrings, and 29% were engagement rings.
- 29% declared electronic devices. In this case, the most numerous were computers (60%), and the rest were others such as televisions or speakers.
- 23% works of art. In nine out of 10 cases, paintings.
- 11% sporting goods. 90% high-end bicycles.
How can you estimate the value of objects?
Juan García responds: “Normally, all insurers propose values for continent and content coverage that are based on years of experience. However, we usually propose a simple formula to the insured who ask us and who want to be sure that the coverage they contract is sufficient.”
In summary, the method consists of four steps:
- Take photos or a video of all the objects in the home.
- Make a list of the most valuable ones that have been identified, and calculate their cost individually.
- For less valuable items, such as clothing or kitchen utensils, estimate a joint figure.
- Add everything up and round to the nearest 10,000 dollars, to better calculate the value of content coverage. For example, if you estimate that you have things worth $17,000, choose content coverage of $20,000.
What solutions does the market offer for objects of special value?
When it comes to insuring valuables, the main insurers operate with one of these three models, as Tuio explains to us.
- Insurance that pre-establishes a unit value of the maximum amount that is covered, the range can be very different, from 2,000 to 6,000 dollars.
- Insurance where, in addition to having a value limitation per object, any other object of higher value can be insured by declaring it individually.
- Insurance that does not offer coverage for certain valuables. Jewelry and electronic and mobile objects, “which due to their special characteristics tend to have a higher accident rate and insurance companies offer individual policies; This is the case of a complementary policy.”
What does standard home insurance cover?
This policy has to protect the container, contents and assets of a person, safeguarding their civil liability.
You have to look at the values of the container (the home) and the content (the belongings). The objective is to ensure that the established value would cover the replacement in the event of an accident. But García insists that “the ideal is neither to pay more, nor to pay less, but just enough,” and makes two recommendations:
- That the value should not be above the real value to avoid paying a premium on the insurance.
- That the value is not significantly lower. Faced with a situation of underinsurance, the insurer can apply the law of proportionality: “If it considers that your policy is only covering three-quarters of your belongings, it will only pay three-quarters of what the claim is.”
The most common thing is that the interested party has to choose between three types of insurance:
- Modular. They offer very tight basic coverage, allowing others to be added according to needs. “There is a danger that not everyone is necessarily an insurance expert and knows what type of coverage to include.” Therefore, the user tends to cover little more than civil liability, which can represent a clear problem in the event of an accident.
- Closed. A more standard policy is offered, meeting the most common needs. It is the one offered by Tuio, to “avoid unnecessary coverage that increases the price.”
- Extensive. They offer a great list of coverage, the advice is that the client checks if they are interested in including services such as school assistance or technological assistance.
What coverage should home insurance have?
Most important are damage from water, fire (including smoke and explosions), atmospheric phenomena, theft inside the home and potentially outside the home, and vandalism.
Civil liability coverage is also basic. It is activated when an accident in the home for which you are responsible, for example, a fire, causes damage to third parties.
Coverage related to accidents such as glass and ceramic hob coverage or coverage that protects marble, granite, and sanitary ware is also recommended.
Equally interesting is that of aesthetic damage. If there is no replacement of the same material after a water incident that has damaged part of the flooring, it will be used to change the flooring of the entire room. On this point, García warns that when checking this type of coverage, you not only have to worry about the amount they offer in the event of an accident, but also what it covers, taking into account the exceptions that the policy text requires.
Another trend in home insurance is “servicilization.” It allows the intervention of maintenance professionals, handymen, or locksmiths who come to fix small defects in the house or DIY actions. According to data from Unespa, water damage represents four out of ten of the damages attended to by these professionals. Next in importance are glass breakage (16.9%) and electrical damage (11.3%).
Apart from those indicated, the client may find that other types of coverage are included in their insurance as optional or mandatory. Examples are accidental ones, which go beyond the standard coverage: hospitalization and accident insurance, travel coverage, and coverage related to pets…
What about rental homes?
“He is another of the great unknowns in the insurance sector in the USA,” says Garcia: A landlord’s home insurance will only cover the continent, the civil liability of the home, for example, if pipes burst, and the landlord’s objects… “Anything that belongs to the tenant will not be covered by home insurance.”
As explained, this is a peculiarity in some specific markets, “in other countries, this figure of home insurance for tenants, which covers the civil liability of the tenant and their belongings, is much more widespread. Even in France or some parts of Belgium, it is mandatory.”
But for now, the only possibility that a tenant in the USA has to insure their belongings against a home accident is to take out an individual policy.
