What is Personal Property Insurance?

personal property insurance

So, what is personal property insurance? Do you own a home, or rent, and are trying to figure out how this coverage works? No matter your living situation, understanding what is covered under personal property insurance can save you from huge financial loss in case of disaster. Personal property insurance covers items in the event they are damaged or destroyed by common events like fire, theft, vandalism or storms. In this article, we’ll break down essential information about personal property coverage to help make sure all your assets stay safe.

Definition of Personal Property Insurance

Personal property insurance is a type of coverage on your homeowners, condo or renters policy for your personal belongings. This includes items such as your furniture, electronics, clothes, and other personal items that you may have in your home.

Personal property insurance is important because it can protect you financially in the event of theft, damage, or loss of your personal property. Without this type of insurance, you may have to pay out of pocket to replace these items, which can be expensive.

With personal property insurance, you can have peace of mind knowing that your belongings are protected and that you won’t have to worry about the financial burden of replacing them.

Overview of What is Covered by Personal Property Insurance

This type of insurance covers your personal property, including furniture, electronics, jewelry, and more, from damage or loss caused by theft, fire, storms or other covered events known as perils.

Covered perils can vary from policy to policy so you’ll need to check yours to be sure. Flood is not covered with homeowners insurance. Flood coverage is purchased with a separate policy.

High value items typically have to be separately listed or “Scheduled” on your policy. This is because the blanket limit for these items tends to be too low. These are valuables like jewelry, art, antiques or firearms.

Personal Property Coverage Limit

For a homeowners insurance policy, your personal property limit is typically a set percent of your dwelling coverage. Dwelling coverage is for everything else that is not personal property.

The default can vary between insurance companies but most will allow you adjust the limit. Some companies will use 50% of the dwelling coverage and some are higher around 75%.


Dwelling coverage: $400,000

Personal Property: $200,000 (50% of $400,000)

For a renters policy, there are no defaults so you’ll simply choose the persona property limit you feel comfortable with.

Replacement Cost vs Actual Cash Value

There are two types of loss settlements for personal property.

  1. Replacement Cost – Pays to purchase items that are comparable.
  2. Actual Cash Value – Pays the value of the items minus depreciation.

We always recommend choosing Replacement Cost coverage. There isn’t a big price difference and it won’t leave you with a gap in coverage.

For example, if your $1,500 TV is 8 years old, you may only get $300 if you choose Actual Cash Value. Compounding this gap in coverage is inflation. That same TV now costs $2,000. You would be $1,700 out-of-pocket.

Items Not Covered by Personal Property Insurance

High Value Items: As we mentioned, your high value items or collectibles probably won’t have adequate coverage. You’ll likely need to “Schedule” them on the policy separately.

Permanently attached items: These are things like cabinetry, range hoods and wall-to-wall carpet.

Pets: Animals, birds or fish.

Tenants property: Personal property of a tenant paying you rent. They would need to purchase a renters policy and add personal property coverage.

It’s essential to review your insurance policy carefully. These are general guidelines and your policy may differ.

How to Determine the Value of Your Personal Property

Determining the value of your personal property may seem like a daunting task, but it’s actually quite simple. One method is to take inventory of your belongings and research similar items online to see how much they are selling for.

You can simply use an Excel spreadsheet but there are some great apps out there to assist you as well. Just search home inventory apps in your smartphone’s app store.

For high value, special items or collectibles it may be wise to get an appraisal. For your homeowners insurance an appraisal less than 3 years old may be required anyway.

Can I Change the Coverage on My Existing Policy?

You sure can. Just contact your agent for assistance. There are limits on how high and how low you can go. However, it’s a very wide range so you’ll be able to get the coverage that fits you best.

Final Thoughts

Without adequate personal property insurance coverage, you could find yourself facing significant financial losses. Choosing the right coverage ensures that if the worst does happen, you won’t be left empty-handed. Don’t go cheap on this coverage. It’s not worth it.

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