August-18-2022

Personal property coverage in Texas homeowners insurance claims

Houston, TX – When your house is damaged by fire, wind, hail, vandalism, or another type of insured peril, one of the most difficult tasks is determining the value of your destroyed personal property. This refers to the stuff you own, including furniture, electronics, appliances, and clothing, as well as jewelry, art pieces, memorabilia, collections, etc. 

Types of personal belongings insurance coverage

Coverage for personal property is subject to the terms and limits outlined in your policy, so be sure to read the fine print before signing it. When you buy home insurance, you should consider carefully what sort of replacement value you want. You have two options:

  • Actual cash value – this means the insurance company will give you the money your personal belongings were worth at the time of the damage event. If you had an old TV set, bought when you first moved in 7 years ago, the insurance company would calculate depreciation for that period and give you something like $100 for it.
  • Replacement cost value – this term refers to how much money you’d need to replace the TV set, no matter how old it was. You cannot buy a decent TV for $100, so the company will give you the money to buy a model similar to the one you had.

The difference between these two types of insurance coverage is that policies with replacement cost value are more expensive than those that offer only actual cash value.

What is the coverage for personal property?

Under most types of homeowners insurance policies, the total value of your personal coverage will be somewhere around 40-50% of your dwelling coverage. This is another thing to consider when buying home insurance. If you’re the kind of person with an impressive collection of firearms, jewelry, antiques, or other valuables, the standard coverage may not be enough to compensate for the losses in a disaster. You may want to buy additional coverage.

How is sentimental value defined?

Most people have a lot of things in their houses that have mainly sentimental value to them and no real market value. For instance, your wedding pictures and your kid’s sports trophies are only valuable to you. Is the insurance company going to pay for such items? Texas uses a policy according to which personal property damages should not be determined by the “sentimental or fanciful” value of an object to the owner.  The law however allows for damages based on the property’s actual value to its owner. If the insurer disputes the value of this type of item it’s best to talk to an experienced Texas homeowners insurance claims lawyer. 

There is another category of personal property where an item has both market value and sentimental value. For instance, your grandmother’s gold necklace has some market value, but to you, it’s more precious than that because you remember the moment the old lady put it around your neck before your wedding.

How to prove the value of your personal property

When you file an insurance claim, you will be asked to provide a list of personal belongings destroyed or damaged by the insured event. You should add receipts for as many of the items on the list as possible. You can also send pictures or videos of your home to prove that you actually had those items and the condition they were in before the damage event. Also, don’t forget to take photos of your home after the damage event focusing on the destruction of your personal belongings.