They won't just send you a check!

Now that Christmas is over, many of your new household items are gifts. You won't have receipts, so how will you prove ownership if you have a loss from burglary, fire, or a natural disaster?


One of the most common misunderstandings about personal property (contents) insurance is about how claims are paid. People often tell me they believe that if they have a disaster, they’ll just get a check in the mail for the amount of their coverage.

This is not the case. Most insurance companies won’t just cut you a check without a list of the items you are seeking to have replaced. You’ll be asked to provide a detailed list of your loss, which needs to include each item, price and when it was purchased. Usually, you’ll also be asked to state the manufacturer, model number and serial number or other description of electronics and appliances.

It’s not unusual to also be required to prove ownership to receive full replacement. For example, a stolen 42” television brought a theft victim only $400 because he couldn’t prove it was a big screen TV. Instead of receiving the true value of the stolen television, he received the amount his insurance company pays out for a ‘standard’ model (in his case, it was a 27”).

Consider this – let’s say you have $100,000 in coverage. If your belongings are worth only $60,000, you will not receive $100,000. And, further, you won’t just receive a check for $60,000, either. You’ll be required to complete the list mentioned above before they’ll settle your claim. This proves how important it is to have an inventory of your belongings prepared before you need to file a claim. The investment in a personal property inventory is minimal compared to your potential loss.

Of course, there are always exceptions because every policy is different. Talk to your agent now so you can fully understand the details of your policy. Then, when you have to file an insurance claim, you won't be surprised when they say that they can't just send you a check.