What Is Personal Property Coverage?
Personal property coverage, also known as Coverage C, is a key part of most home insurance policies. It provides coverage for your belongings if they’re stolen, damaged or destroyed in a covered event. It’s also included in condo insurance and renters insurance, where it’s often the primary coverage for your belongings. And it doesn’t just apply to contents inside of your home – it can also cover the personal property you keep in your car, in a storage facility or take with you on vacation.
What does personal property coverage cover?
Commonly covered belongings
Personal property coverage includes items that are not attached or built in to the main structure of your home. Basically, if you were to turn your home upside down and shake it, most of what falls out would be covered under Coverage C. Common examples of personal property include:
- Furniture, clothing, electronics and appliances
- Kitchenware, books and tools
- Jewelry, art and collectibles (subject to sub-limits)
Covered events
Your personal property is generally covered for damage caused by specific events, also called perils in your policy, such as:
Fire, smoke or lightning: If your items are damaged by a lightning strike, fire or smoke, your policy may help cover the cost to repair or replace them.
Vandalism and theft: If someone intentionally damages, or breaks in and steals your belongings, this coverage may help you recover the value.
Wind and hail: If a storm damages your personal items, like outdoor furniture, you’re likely covered.
Water damage from burst pipes: If a pipe bursts in your basement and damages your belongings, you’re typically covered for their repair or replacement.
Covered perils away from home: If your luggage is stolen while you’re traveling, coverage is afforded to replace what was lost.
Remember, coverage can depend on your specific policy and location. Some situations may require an endorsement or additional coverage to be fully protected.
Understanding sub-limits and scheduled personal property
Some personal belongings have coverage sub-limits – meaning there’s a cap on how much your insurer will reimburse you, even if the loss is from a covered event. These sub-limits can vary based on your insurance company, state or specific policy type. Here are some items that often come with sub-limits:
- Jewelry and watches
- Firearms
- Furs and precious or semi-precious stones
- Silverware and goldware
- Cash or gold bullion
- Property used primarily for business
- Watercraft and trailers
If you own high-value items, you may want to consider scheduled personal property coverage. Scheduled items usually require documentation or an appraisal to set higher coverage limits. They’re protected for a broader range of risks than what’s in your policy, like accidental loss or mysterious disappearance.
It’s smart to review the coverage and documentation for your valuables regularly. That way, you can make sure your appraisals are current, and your coverage still fits your needs.
What is not covered under personal property coverage?
Personal property coverage helps protect against many unexpected events, but there are a few exclusions to be aware of:
Maintenance-related damage: Damage to your items from everyday use, aging or lack of maintenance is excluded.
Business property: Business equipment or supplies stored on or off your property may have limited or no coverage. It’s best to discuss with your insurer if you have business equipment or supplies.
Natural disasters: Coverage is excluded for damage caused by certain natural disasters like an earthquake or flood. For protection against these events, you would have to purchase flood insurance or add on an earthquake endorsement.
Personal property coverage limits and valuation options
Most policies set your personal property coverage limit at a percentage of your dwelling coverage limit. For example, if your home is insured for $500,000 and your Coverage C is set at 75%, you’d have $375,000 in personal property coverage. You can usually increase this limit if needed.
When it comes to insuring your belongings, you may be able to choose between actual cash value (ACV) and replacement cost value (RCV), depending on your insurer. ACV pays what your items are worth today, factoring in depreciation, while RCV pays to replace your items at today’s prices without depreciation. Most insurance policies default to ACV for personal property, but for an additional cost, you can opt for replacement cost coverage.
Here’s an example of how both ACV and RCV work: You bought a kitchen table 10 years ago for $1,000. Over time, normal wear and tear has reduced its value to $500.
ACV payout: You’d receive the current value of the table – $500, less your deductible.
RCV payout: If a similar table now costs $2,000, that’s the amount you’d receive, less your deductible.
Quick tip: Keeping a detailed home inventory, including receipts, photos and estimated values, can help ensure your coverage is sufficient and help streamline the claims process.
Get the right home insurance coverage for your needs
Personal property coverage is just one part of a standard homeowners policy. To fully protect your home and everything in it, it’s important to understand all the coverage options available to you:
Dwelling coverage: Protects the physical structure of your home against damage from covered perils in your policy.
Other structures coverage: Covers buildings that aren’t attached to your home, like a detached garage, shed or fence.
Loss of use coverage: Helps pay for temporary living expenses, like hotel stays or meals, when a covered loss makes your home unfit to live in.
Personal liability coverage: Provides coverage if you accidentally cause damage or injury to another person or their property.
Medical payments coverage: Helps provide coverage for injuries to others if they’re accidentally hurt on your property, regardless of fault.
Regular policy reviews matter. As your home and belongings change over time, so should your insurance. We recommend reviewing your homeowners policy regularly to make sure your coverage still fits your needs.
Your Policy, Policy Declarations or Amended Declarations in effect on the date of loss is the primary source of reference for your coverage, coverage limits and deductible amounts.
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