Michelle Lambright Black is a credit expert, freelance writer, and founder of CreditWriter.com. She has over 20 years of experience writing and speaking about credit and money, and focuses on helping families and small business owners make smart, informed decisions about their credit, money, and financial products (including insurance). Michelle's work has appeared in publications such as Yahoo! Finance, Reader's Digest, Parents, FICO, Forbes, Bankrate, The Seattle Times, MarketWatch, BuySide from Wall Street Journal, USA Today, and more. She's also a three-time finalist for the best personal finance freelancer award from the Plutus Foundation. When she isn't writing or speaking about credit and money, Michelle loves to travel with her family or read a good book. You can connect with Michelle on Instagram or Twitter.
7+ years in business and financial services content
Chris is a seasoned writer/editor with past experience across myriad industries, including insurance, SAS, finance, Medicare, logistics, marketing/advertising, and many more.
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Personal property insurance coverage provides financial protection for the belongings you keep inside and outside your home. As a homeowner, it’s important to understand the coverage that personal property insurance provides in the event of a covered loss.
It’s also wise to know the limits of your insurance policy.
Here’s what you need to know about personal property insurance and how it may cover your personal items. You’ll also find details about additional coverage options along with tips for maximizing any personal property coverage you already have in place.
What is personal property coverage?
Personal property coverage, also known as the contents coverage portion of your homeowners insurance policy or renters insurance policy, provides financial protection for personal belongings inside and outside your home.
If you experience a covered loss, such as a fire, natural disaster, theft, or burglary, personal property insurance should help pay for the repair or replacement of your personal items — up to the limits your insurance policy allows.
Replacement cost vs. actual cost value
It’s important to read the terms of your insurance policy and understand whether your personal property coverage provides for replacement cost or actual cash value coverage in the event of a loss. Here’s a quick look at the difference between the two types of coverage.
Replacement cost coverage: With this coverage, your policy will reimburse you for the full cost of repairing or replacing your belongings after damage from a covered peril. So, if you lose your furniture in a house fire, you can rest easy knowing that your insurance company will give you the money you need to purchase new furniture (and other belongings you lost) at the current market price.
Actual cash value coverage: With actual cash value policies, your insurance company will reimburse you for only the depreciated value of your belongings if you experience a covered loss. For example, if you lose your furniture in a fire, your insurer will likely reimburse you for the value of your furniture at the time of the loss instead of paying you the amount you paid for the furniture or giving you enough money for new replacements.
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What does personal property coverage insure?
Personal property coverage can give you peace of mind if a covered peril damages or destroys your belongings. Still, the financial protection personal property insurance provides has limits.
Below are some examples of the types of personal property your insurance policy may cover.
Furniture: Personal property coverage can cover everything from your kitchen table to your living room couch to the bedrooms throughout your house. This can save you from spending your own money to replace or repair these items following a covered peril.
Appliances: Personal property insurance may also protect the appliances inside your home, including your refrigerator, dishwasher, freezer, and more.
Electronics and gadgets: If you want to protect the electronics and gadgets inside and outside your home, including your computers, televisions, and tablets, it’s important to make sure you have enough personal property protection in place.
Clothing and jewelry: The personal items in your closet should also have coverage under your personal property insurance policy. But keep in mind that jewelry coverage may come with limits depending on the terms of your insurance policy.
Home decor: Personal property insurance typically covers damaged or stolen home decor items, as long as the loss results from a covered peril.
Common exclusions and limitations
Personal property insurance covers the loss of many types of personal belongings inside and outside the home. But there are exclusions and limitations you should understand.
For example, if you ’re the victim of certain types of natural disasters (like floods), your insurance policy may not protect you. Additionally, if you lose personal items due to negligence (like leaving a laptop behind in a hotel room), traditional personal property insurance likely won’t cover you.
But you may be able to purchase add-on protection for specific items, depending on your insurance policy.
Your insurer may also set limits (called sublimits) on your personal property coverage for certain high-value items. It’s wise to review your individual policy so you’re familiar with the protection it provides.
It’s important to understand that your insurance policy features limits, both overall and within the personal property section of your coverage itself. Read the terms of your individual insurance policy to understand exactly how much coverage you have to protect your personal possessions.
If you’re not sure how much homeowners insurance you need, you can use a home insurance calculator to estimate the right coverage amounts for your situation. The optimal amount of personal property insurance should give you enough coverage to replace your full home inventory in the event of a disaster. If you find that your personal property insurance limits aren’t high enough to protect your belongings, you may want to consider increasing them or switching insurance companies.
Types of personal property insurance policies
Personal property insurance comes in several different shapes and sizes. The amount of coverage you need may differ based on the type of property insurance you purchase. Below are some of the most popular options.
Homeowners insurance
Most homeowners insurance policies include personal property coverage. For example, it’s common for a homeowners policy to include at least 50%–70% of your dwelling coverage limit for personal property. But it could be wise to increase your limit if you feel you need additional financial coverage for your possessions.[1]
Renters insurance
As a renter, your landlord’s insurance won’t cover your personal belongings. But if you take out a renters insurance policy, it should include personal property coverage to protect your possessions in the event of a covered peril. The best news is this type of insurance tends to be inexpensive — often only $15–$30 per month.
Condo insurance
Condo insurance is a special type of homeowners insurance. Like homeowners insurance, condo insurance includes personal property coverage to protect your personal possessions. So it’s important to make sure you have the right amount of protection based on your specific needs.
Mobile home insurance
If you own a mobile or manufactured home, it’s important to purchase a mobile home insurance policy to protect your home and belongings. Your insurance policy should include personal property coverage. So be sure to review your policy limits and confirm that you’re comfortable with the protection that’s in place.
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Additional coverage options
If you own expensive personal items, your insurance policy might not cover them in the event of damage, theft, or loss. But you could consider taking out a separate endorsement or rider on your insurance policy if you want to protect specific big-ticket items.
An endorsement typically increases the cost of your insurance policy (though often not by much depending on the cost of the item you’re insuring). Yet not only can this type of add-on protect specific items like jewelry, artwork, musical instruments, collectibles, and other high-value belongings, but it may also provide you with coverage for your possessions even when they’re away from your home.[2][3]
Tips for maximizing your personal property coverage
As a homeowner or renter, you hope you’ll never need to make use of your personal property coverage. Yet it’s better to be well prepared in case you ever need to file a claim.
Here are some tips that can help you make the most of your personal property coverage if you need to use it.
Create a home inventory. Walk through your home and create a home inventory with videos and pictures of your personal belongings. Be sure to pay close attention to high-value items. It’s also a good idea to update your home inventory from time to time as you make new purchases.
Keep records and receipts. You should also keep receipts, appraisals, bank statements, and credit card statements when it comes to the items you purchase. These documents could be helpful if you ever need to prove how much you paid for the belongings in your home.
Periodically review and update your policy. You should make sure that the personal property insurance you have is enough to cover the belongings inside and outside your home. It’s also important to review your coverage amounts on a regular basis in case you need to increase your coverage over time.
Filing a claim
The process of filing a personal property claim can differ from one insurance company to another. Here are the basic steps you may need to complete:
Gather your documents. If possible, take pictures, make a video, or make a list of all your damaged personal belongings. You should also gather receipts of the items you purchased or any other proof of ownership you might have available. In the event of theft or vandalism, you may also need to file a police report.
Contact your insurance company. It’s important to report the loss to your insurer as soon as possible. Depending on the insurance company, you may be able to start this process online, through your mobile app, or on the phone.
Work with a claims adjuster. A claims adjuster from your insurance company will likely contact you to assess the damage to or loss of your possessions. The adjuster will determine if you’re eligible for coverage and, if so, will also calculate the total amount you’re likely to receive from your insurer.
Check out the additional information below about personal property coverage.
What do you do if your claim is denied?
If an insurance adjuster denies your home insurance claim and you believe the decision is unfair, you might be able to file a dispute.
How do you upgrade your coverage?
If you want more protection for your belongings, you can talk to your insurance company about increasing your overall personal property coverage limits. Another option is to take out individual endorsements on specific high-ticket items.
Are discounts available for personal property coverage?
As a homeowner, you have personal property coverage as part of your overall home insurance policy. If you’re interested in lowering your costs, searching for home insurance discounts could be a great way to save. And while it may be difficult to find personal property coverage discounts on their own, many other discounts are available, including discounts for seniors, military members, auto-pay discounts, bundling, and more.
What types of items does personal property insurance typically cover?
Personal property insurance traditionally covers many of the items inside and outside of your home. This type of insurance may protect items such as your furniture, clothing, electronics, kitchen items, appliances, home decor, and more.
How does your insurer determine the value of personal property for coverage purposes?
Your insurance company determines the value of personal property according to the terms of your policy. If your policy includes replacement cost coverage, your insurer will reimburse you for the amount needed to purchase new replacement items after a loss. But if your policy provides for actual cash value coverage, your insurer will reimburse you only for the depreciated value of your belongings after a covered loss.
Michelle Lambright Black is a credit expert, freelance writer, and founder of CreditWriter.com. She has over 20 years of experience writing and speaking about credit and money, and focuses on helping families and small business owners make smart, informed decisions about their credit, money, and financial products (including insurance). Michelle's work has appeared in publications such as Yahoo! Finance, Reader's Digest, Parents, FICO, Forbes, Bankrate, The Seattle Times, MarketWatch, BuySide from Wall Street Journal, USA Today, and more. She's also a three-time finalist for the best personal finance freelancer award from the Plutus Foundation. When she isn't writing or speaking about credit and money, Michelle loves to travel with her family or read a good book. You can connect with Michelle on Instagram or Twitter.
7+ years in business and financial services content
Chris is a seasoned writer/editor with past experience across myriad industries, including insurance, SAS, finance, Medicare, logistics, marketing/advertising, and many more.
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