Calculating the Average Value of Personal Property for Insurance

A woman calculating the value of her personal property

Imagine that your home is destroyed in a fire. As you start the process to rebuild your life, a hard reality settles in: Your insurance coverage falls short of replacing your lost personal property. While this is an unfortunate situation, understanding how to calculate the average value of your possessions can help avoid such predicaments. Consulting a financial advisor can also help you understand how to value your personal property for insurance.

What Is Personal Property?

Personal property refers to any movable assets or belongings that you own. These can include furniture, electronics, clothing, jewelry and vehicles; which are different from real property like land and buildings.

As you can see from the examples above, personal property is commonly defined by its mobility. This is unlike real property, which is typically immobile and permanently affixed to a location. Personal property can be transported, bought, sold and transferred more easily.

Because of this movable characteristic, personal property can vary significantly in value, size and form, ranging from everyday household items to high-value assets like art collections.

You should also note that personal property can include intangible assets, like stocks, bonds, patents, trademarks and intellectual property.

How to Calculate the Value of Personal Property

The value of personal property can change over time. So it can be good practice to update your inventory and valuations periodically, especially for items that may appreciate in value or require specialized coverage. Here are eight common steps you can take to value your personal property:

Types of Insurance That May Cover Personal Property

A mother and daughter compiling an inventory to calculate the average value of personal property for insurance.

There are many different types of insurance that, if you file a claim, will need to decide how much your personal belongings are worth. Here are five of the most popular:

Deciding on the right coverage can be complicated, therefore you should consider the specific coverage limits and variable rates.

Bottom Line

A couple reviewing the value of their personal property with an insurance agent.

Peace of mind is priceless. But having an accurate value of your personal property can help protect you from loss, damage, or theft. As a best practice, keep an updated inventory of your personal property, get professional appraisals for high-value items, and review your insurance policies regularly. These actions will not guarantee an outcome but could significantly improve your chances of satisfactory results, in case of an unfortunate event.

Insurance Tips

Photo credit: ©iStock.com/VioletaStoimenova, ©iStock.com/Inside Creative House, ©iStock.com/inewsistock

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