Personal property coverage accounts for your belongings, and it’s usually included in your standard homeowners’ insurance.
Most people are familiar with the fact that their home insurance policy covers the damage caused to their home. But what about the items that are inside (think: furniture, electronic devices, appliances)? They are as vulnerable as other parts of your home – and perhaps even the most vulnerable when it comes to theft.
That’s why you need your renters or homeowners insurance to include personal property coverage to secure them. Below, you’ll find all the useful information – including what belongings it entails, how to get it, and which insurance company to trust.
Stay tuned!
What Is Personal Property Insurance?
Personal property insurance (or coverage) is part of your standard homeowners insurance policy that accounts for your belongings.
Therefore, your renters or home insurance will help pay the cost for your personal items that get damaged or destroyed in the event of a covered loss.
“Covered loss,” in property insurance terms, refers to perils that can affect your belongings and home. They are also sometimes called “risks.”
You can opt for an ALL PERIL policy that will protect you against any perils that could cause a loss except those that are specifically listed as omitted.
On the other hand, NAMED PERIL insurance policies provide coverage only against named perils (i.e., those that are stated in your policy).
In case you need help determining your named perils or determining which type of policy and personal property coverage you need, a Geek insurance agent can assist you.
The most common perils that can affect your personal property are:
- Theft
- Fire
- Vandalism
- Indoor flooding
But your insurance policy will also protect you against additional ones, such as hail, wind, etc.
Also, take note that a homeowners insurance (or renters insurance, if you’re a renter) policy will not cover the loss for misplaced or lost belongings.
Personal Belongings
Now that it is established what one’s personal property coverage is, another question arises:
Which personal belongings are covered?
Not all items you own will be covered by your policy, but luckily, most of them that are of the highest value will be.
So, what do they include?
- Furniture. Of course, what is meant by personal property coverage on furniture is the damage caused to it by a peril stated in your insurance policy. The usual wear-and-tear (such as you ripped the arm of your sofa because you bought it years ago) is not covered.
- Appliances. All of your household appliances are also included under your personal property insurance. This is an umbrella term for both kitchen appliances and electronics in your home.
- Clothing. Even if you don’t own expensive items of clothing, it’s good to know that your personal property coverage can pay the cost if it’s damaged or destroyed in a fire or a similar accident covered by your insurance.
- Dishes. These items are also vulnerable to damage from the abovementioned perils, and insurance policies protect them.
- Sporting goods. In the situation of a covered loss, the items of your sporting equipment can also be insured.
High-Value Items
Even though your personal property insurance will cover most of your belongings, the value of some may exceed your coverage limits.
That’s why some insurance companies enable you to add high-value items coverage to your homeowners or renters insurance policy and ensure that you have enough protection for all of your most valuable items, such as jewelry or expensive artwork.
For instance, our insurance company carrier Nationwide offers an additional amount of coverage with theirValuables Plus policy that covers jewelry, watches, and antiques.
Similarly, Safeco offers adding an endorsem*nt to your insurance policy in order to protect the most valuable items. They call this type of coverage “Valuable Articles Coverage.”
Jewelry theft is one of the most frequent types of crimes that are committed against home property. And the value of a gift from your loved one or a ring that has been handed down through generations in your family is priceless. So, it’s a good idea to discuss the value of your personal items with your agent and determine how much coverage you’ll need in order not to exceed the coverage limits.
Breakdown Coverage
Safeco, a reputable insurance company that’s one of our carriers here at Insurance Geek, also offers “Equipment Breakdown Coverage.” This is an add-on to your regular renters or homeowners insurance policy that includes mechanical and electrical breakdowns that can happen in your home.
When you think about it – this stuff happens to your personal property probably more frequently than damage from perils, so it would come in handy to have insurance that would cover the cost of repairment and keep the critical household equipment up.
Note that these insurance policies include protection if an unexpected breakdown happens and not if it occurs as a result of corrosion or standard wear and tear.
How Much Personal Property Coverage Do I Need?
And now to the million-dollar question:
How much personal property coverage do you need?
The answer may not be as straightforward as you’d like, but we’ll get to it.
The amount and replacement costs quickly add up – from furniture to electronics and your valuable items – the personal property amount can get quite high.
On the other side, maybe the stuff inside your home is cheap, and you want your policy to concentrate on the value of the home structure.
How much personal property coverage you’ll need will largely depend on the replacement cost value of your belongings. So, let’s dig right into it.
Actual Cash Value Vs. Replacement Cost Value
There are two kinds of “value” that are ascribed to your personal property from the point of view of an insurance company: ACV (Actual Cash Value) and RCV (Replacement Cost Value).
Actual Cash Value refers to the market value of an item if you sell it, meaning the dollar amount it would cost in the present state.
Does it mean that you can just look up the item or go to a store and check out its Actual Cash Value? No.
The thing is that the Actual Cash Value insurance policy also takes into account the depreciation, subtracting it from the purchase price of that item.
To put it in practice: Say that you bought a new TV four years ago. With wear and tear that inevitably happens over time, it will not carry the same price tag anymore – even though technically it’d still cost you a similar amount to what you had paid earlier to get a new one.
Therefore, it is advisable to go for Replacement Cost coverage and add this endorsem*nt to your home insurance policy.
The main difference is stated in the name itself. This type of insurance provides you with the amount that is equivalent to the replacement cost coverage of your belongings. Back to the TV example – a Replacement Cost policy does not pay a dollar amount you’d get for a TV that has been used for four years, but the total coverage you would need to replace it and get a new one.
Coverage Limit
When determining the personal property coverage amount, you should take into account the coverage limits.
It will be stated in your policy, and it shows how much personal property coverage you can get, i.e., which is the highest amount that you can receive and have available for your claims.
What Else Does Your Homeowners Insurance Cover?
Parts of Homeowners Policy
In addition to personal property coverage (also known as Coverage C), your standard homeowners policies will include the following types of coverage:
- Coverage A – Dwelling Coverage. This type of coverage is probably your first association when it comes to home insurance. It refers to the actual physical structure of your home, including the flooring, roof, walls, and so on.
- Coverage B – Separate Structures. Everything that is sort of “detached” from the actual structure of your home is included in separate structures coverage – objects like sheds, garages, gazebos, swimming pools, etc.
- Coverage D – Loss of Use. In the case that you cannot stay in your home for a certain period, your policy can cover the cost of the accommodation and transportation during that time.
- Coverage E – Personal Liability Insurance. If you are legally responsible for injuries or damage caused by an accident to another person, this portion of your policy can reimburse the expenses for your defense.
- Coverage E – Medical Payment. This part of your policy pays for medical expenses if an individual has been injured in your home.
Water Insurance Coverage
No home insurance will include Flood Insurance coverage, but you can protect yourself from water damage by adding separate policies with an insurance company that offers them.
For instance, Safeco and Nationwide provide coverage for sewer and drain backup, burst pipes, and similar emergencies.
Auto Insurance
Often overlooked, our vehicles need protection, too. Just because they are parked next to your house does not mean they are covered by your home insurance policy.
Therefore, if you obtain car insurance, you can rest assured that it will be protected against damage.
Plus, bundling equals discounts and cheaper premiums!
Get a Quote Today
Are you looking to get a quote for your insurance policy and get personal property coverage (amongst all the other benefits)? We can help you with that:
Just give us your basic data – such as ZIP code and address – and we will generate the most favorable deals for you.
The whole process is straightforward and won’t take more than two minutes. When you provide us with information, we won’t bother you with spam. It’s up to you to decide on further steps.
Insurance companies that we trust for personal property coverage and homeowners insurance are Nationwide and Safeco.
Regardless of your ZIP code and where you at, your Geek Insurance agent is available for any assistance you may need further on!
We can use our calculator to help you determine the personal property coverage you need for your belongings and make sure that you get a full replacement for them in case of a loss.
Personal Property Insurance: FAQ
Q: How is personal property coverage calculated?
A: In short, when determining personal property coverage, agents will look at the market data to establish the approximate worth of your personal property items. It is important to find a company that will provide honest and up-to-date calculations. At Insurance Geek, we can determine the total value of your personal property by using ACV (Actual Cash Value) and RCV (Replacement Cost Value) calculators. The result is that you will not have to worry about whether you’ll be able to fully replace your personal property pieces.
Q: What is the difference between personal property and contents?
A: Actually, there is no difference between contents coverage and personal property coverage. The term personal property is most commonly used by professionals, but you won’t have any trouble if you use the term contents instead. Both refer to valuables belonging to you that can be found in your home.
In Summary
Personal property coverage (Coverage C) is a part of standard homeowners’ insurance.
Your personal property is just as important -and vulnerable to damage – as your actual home structure!
That’s why it is paramount to make sure that you get adequate personal property coverage as a part of your renters or homeowners policy.
Tell us about your personal items that you want to insure, and a Geek Insurance agent will gladly assist you and come up with a tailored scenario for your needs – including a trusted insurance company and beneficial quotes.
