Calculating Your Personal Property Value for Your Homeowner's Insurance Rate

Before you go online and use the Internet to receive a quote on your homeowner's insurance rate, you should be prepared with the information you will need for the insurance company to provide you with accurate information. The estimated value of your home and its contents is one of the first things that the home insurer will ask you to provide when you apply for home owners insurance.

For home insurance purposes, you need to understand that the value of your possessions can be covered in two different ways. You can choose protection of your valuables through the "actual cash value' or "replacement value' systems. Estimating the value of your personal property can be done through an appraisal or by totaling the purchase prices of everything you own.

If you choose the "actual cash value' system of home insurance, then if your personal property is destroyed or stolen, you will receive damages based on what the item(s) would be worth on the market today: you might only receive damages of $25 for a chair that you bought for $100 two years ago. The damages you would receive for this same chair using the "replacement value' might be $150 because that is the price of the chair today.

Needless to say, homeowners who use the replacement system and also have possessions of a high value, the homeowner's insurance rate you pay will be more. In addition, your personal property is classified in different categories that affect how they are insured; your clothing and your expensive jewelry will need two different levels of protection: so will your 10 year old couch and your 200 year old dresser. For your expensive personal property you will have to purchase additional homeowner's insurance to have adequate insurance to replace them in the event of a robbery or fire.

The amount of deductible you carry is another factor that will impact your homeowner's insurance rate. This is the amount of money you will pay if you have a claim before your insurance benefits take effect. The benefit of carrying a high claim deductible is that your insurance premiums will be lower. You can choose a deductible level from $100 to $2,000 or more. The other advantage to carrying a high deductible is that it can save you from filing unnecessary claims which can put you at risk for the insurance company to cancel your policy.