December 26, 2023
Do you know if your personal belongings are insured?
Having personal property coverage can give you some added protection for the things you own. And if you already have a home, condo, or renters insurance policy, you likely already have personal property coverage in place. Still, it's worth understanding exactly how it works and what it does and doesn’t cover.
Personal property coverage covers items in your home or rental in the event that they’re stolen, damaged, or destroyed. This type of coverage, also commonly referred to as "Coverage C," can help pay to replace such items as furniture, electronics, clothing, jewelry, and even artwork in your residence if they’re affected by a peril your policy covers, such as:
Personal property coverage generally isn’t purchased as a standalone policy. Instead, it’s usually part of a home, condo, or renters insurance policy.
If you already have one of these policies, you probably already have personal property coverage. If not, you can add it to your existing policy by reaching out to your insurance agent.
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You will typically need to meet your policy deductible before your coverage will kick in. This means that if you have damages in the amount of $2,000 and your deductible is $500, you’ll need to pay $500 out of your own pocket before your insurance will kick in to cover the remaining $1,500.
You’ll choose a deductible when buying your policy, so keep in mind that the higher your deductible, the less your policy will cost, but the more you’ll pay out of pocket if you have a covered loss.
How much you'll be reimbursed for items like electronics depends on whether they're insured for their replacement cost or their actual cash value.
There are 2 different types of personal property coverage: replacement cost and actual cash value.
Personal property coverage also has limits on how much it will pay out, and these limits are defined in your policy. With a home insurance policy, personal property limits typically are a percentage of your total dwelling coverage, such as 50%. In this example, if your policy limit is $500,000, then you'll have $250,000 in personal property coverage. Depending on your needs, you may be able to increase or decrease this percentage.
With a condo or renters insurance policy, personal property coverage limits are usually a set dollar amount. Options can range anywhere from a few thousand dollars to $500,000 or more, so you can choose the amount of coverage that is right for you.
Exactly what's covered and excluded by personal property insurance will vary from one policy and insurance carrier to the next, which is why it’s important to review your policy paperwork for exclusions, covered perils, and other details.
Typically, personal property insurance does cover most belongings that you keep in your home, condo, or rental. Some common examples include:
Depending on your policy, these items may even be covered if you keep them in your vehicle.
Appliances that can be unplugged and moved, such as refrigerators and microwave ovens, are typically covered by personal property coverage. Appliances that are fixed in place, such as built-in counter stovetops, are usually covered by dwelling coverage instead.
Some personal property insurance policies do not include coverage for items in your home that you use exclusively for business-related purposes. This means if you bring a laptop home from work and it’s stolen, your insurance probably won’t pay to replace it. Instead, your employer would likely need to file a claim through their commercial property insurance.
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Personal property coverage may have sub-limits for items like jewelry.
Personal property coverage may include sub-limits, which are reimbursement limits on specific types of property. Sub-limits are common for valuables and collectibles, such as cash, gold, and jewelry. For example, even if your policy has $100,000 in coverage for overall personal belongings, it may have a sub-limit of $20,000 for jewelry.
If you have any high-value items that exceed these sub-limits, such as an expensive engagement ring or an extensive comic book collection, many carriers offer endorsements or “riders” that can be placed on your policy to raise the coverage sub-limit. This generally will raise your premium as well.
Policies also vary on which sources of damage or loss they cover. These are referred to as “perils,” and a home, condo, or renters policy will either be for “covered perils” or “open perils.” These perils apply to the whole policy, not just the personal property coverage.
Like the rest of a home, condo, or renters policy, personal property coverage typically doesn’t cover losses from flooding or earthquakes. If you want your belongings covered in those scenarios, a flood or earthquake insurance policy can include personal property coverage.
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