How much personal property insurance do you really need?

If you look in just one room of your home and estimate how much each item in it costs, you might be surprised how high the value jumps - and how quickly. For most of us, our personal property is the accumulation of years of living, not something we paid for all at once on a shopping spree. Imagine if something happened to your home and your belongings - would you be able to replace everything you need at once? Chances are, it would be difficult to do.

One way to protect yourself from the high cost of having to replace expensive and valuable items is to consider personal property insurance coverage. If you insure items that you have spent a lot of money on, or which have appreciated in value, you could be in a better position if your items are damaged or stolen.

But how do you know how much personal property insurance coverage you need?

Start by taking an inventory of your home. If you were to lose your home or possessions, it would be incredibly difficult to mentally reconstruct a list of everything you had. If you have any items of particularly high value, you might consider having them professionally appraised, which could help in determining how much coverage you need.

Other items to inventory include:

* Keeping sales receipts and attaching them to your inventory list

* Videotaping or photographing items

* Recording any serial numbers on your inventory list

* Storing your inventory in a safe place outside of your home, such as a safety deposit box.

Once you've created a comprehensive inventory list, discuss with your insurance agent what kind of and how much property coverage is right for you. Actual cash value and replacement cost coverage options refer to different ways your belongings may be replaced in the event of a covered loss. Many of your belongings may decrease in value over time, so it's important to consider this when you purchase coverage for protecting your personal property.

Taking the right steps in advance could help make the process of filing property insurance claims easier in the future, if the unfortunate happens to you. While your valuables can't be replaced, at least you'll have peace of mind that your property will be properly accounted for.