What is personal property insurance?

Personal property insurance is the part of your homeowners, renters or condo policy that protects your belongings after a covered loss. It pays to repair or replace items such as furniture, clothing, televisions, and computers. On a standard homeowners policy, personal property is listed as Coverage C.

Personal property coverage is included with every home insurance policy. It's the primary coverage in a condo or renters insurance policy. It may also be referred to as contents coverage, and it covers anything you own that is not attached to the house, from your towels to your TV.

Does homeowners insurance cover personal property?

Yes, a standard homeowners insurance policy includes coverage for your personal property. Personal property insurance coverage is listed as Part C on your home insurance policy and is set at a percentage of the dwelling coverage, generally 50% to 70%. Dwelling coverage is based on the replacement cost value of your home.

What does personal property insurance cover?

Personal property insurance covers your belongings when they are damaged by a covered peril or stolen. On an HO-3 policy, personal property is covered on a named perils basis, meaning only for the causes of loss listed in the policy. Your coverage extends to belongings away from home, although lower limits apply.

Some examples of covered contents include:

Sporting goods and toys

Furniture
Clothing
Appliances
Stereos
Televisions
Computers
Artwork (with coverage limits)
Rugs, window treatments and other décor
Dishes
Wine and spirits (with limits)

EXPERT TIP: Personal property is covered worldwide, but with a lower limit. Generally, off-premises coverage is limited to 10% of your total coverage. The exception to this limit is any coverage provided under a scheduled personal property endorsement or floater.

Certain high-value items, or those that are difficult to put a price tag on, are probably not fully covered by standard home insurance personal property coverage. This includes things like fine art or jewelry. You can buy additional coverage for those items in the form of a floater.

Does personal property insurance cover appliances?

Yes, personal property insurance covers some appliances if a covered event damages or destroys them. Freestanding appliances that you can take with you when you move, such as a washer or dryer, are often treated as personal property. Permanently installed equipment instead falls under the dwelling section of your homeowners policy.

The distinction depends on how the appliance is installed and the wording of your policy.

For example:

A freestanding washing machine is considered personal property.
Built-in cabinets and permanently installed systems fall under dwelling coverage.
Your refrigerator is personal property, while built-in HVAC equipment is part of the home.

What is not covered by house contents insurance?

Personal property does not cover damage or loss caused by any peril the policy excludes. Standard homeowners insurance policies don’t cover floods and earthquakes, for example, so any loss of personal property due to either one won’t be covered. Make sure you know what’s excluded by your policy.

In addition to perils that aren’t covered, specific items are normally excluded. They include:

Pets
Business equipment, including computers
Cars and other motorized vehicles
Mysterious disappearance (except on a floater)

Note that mysterious disappearance refers to any situation in which you don't know what happened to the item; it includes something you misplaced or lost. Mysterious disappearance is, however, covered by most floaters (scheduled personal property coverage).

How do you insure high-value items?

To insure high-value items, you will need a scheduled personal property endorsement or a floater to cover them in full. This is also called a personal article floater or a personal articles policy. A floater insures a specific item, like a wedding ring, for its appraised value.

Contents insurance imposes special limits on certain high-value property. These include:

Jewelry, such as diamonds, gold, watches, and engagement rings
One-of-a-kind or expensive artwork
Fine wine
Musical instruments
Firearms
Other types of collectibles, such as a coin or baseball card collection

Most policies will only cover these items for between $1,000 and $2,500. You'll find these exclusions in your policy under Section I, Personal Property, Special Limits of Liability.

What are the advantages of a scheduled personal property floater?

Scheduled personal property coverage provides broader protection and higher limits than standard contents coverage for valuable items, insuring specific items separately and covering risks such as accidental or unexplained loss.

Scheduling personal property has several distinct advantages:

Scheduled property is covered for its full appraised value without limits.
The coverage includes "mysterious disappearance," which means it's covered even if you have no idea what happened to it (you lost it). That's not part of standard personal property coverage.
Coverage is based on a "value loss settlement." This means that unless the cause of the loss is specifically excluded in your coverage, the insurer pays the value loss settlement amount in full. For example, if a ring is insured for its $15,000 appraised value, the insurer pays $15,000 if it's stolen or lost -- with no depreciation deduction and no deductible.
It covers your possessions for perils beyond what’s included in a standard policy. For example, a rider will cover you for a lost item, even if you just misplaced it.

How much does a scheduled personal property endorsement cost?

Specialized jewelry insurance costs about 1% to 2% of the jewelry's value per year, although a homeowners endorsement can be priced differently, according to GEICO. Costs for other types of valuables vary. The cost of extra coverage for valuables depends on the item's value, what you are insuring, your location, and the insurer. Jewelry provides a useful benchmark: GEICO says specialized jewelry insurance costs about 1% to 2% of the jewelry's value per year, although a homeowners endorsement can be priced differently.

Based on GEICO’s benchmark for jewelry:

$5,000 of jewelry could cost about $50 to $100 a year.
$10,000 of jewelry could cost about $100 to $200 a year.

Get a quote before adding coverage because rates and policy terms vary.

Scheduling personal property: Expert advice

We asked David Marlett, Ph.D., Managing Director of the Brantley Risk & Insurance Center at Appalachian State University to comment on under- or over-insuring important scheduled items.

Expert Advice

David Marlett, Ph.D, CPCU

Managing Director of the Brantley Risk & Insurance Center at Appalachian State University, Boone, NC

To protect against under-insuring, some policies include an 'inflation guard' that automatically projects a specified increase in contents value every year.

Q. What are some common reasons people might under-insure scheduled personal property, such as jewelry, artwork, or other collectibles?

A. Contents insurance is typically set as a percentage of a home’s value. But under-insuring can happen unintentionally when homeowners add a scheduled item such as jewelry or high-value artwork. If the item was appraised years ago and has since appreciated in value, it may not be possible to replace it in kind in the event of a loss.

Sometimes people are willing to accept a degree of underinsurance to save money on their premiums. Since rates are typically based on every $100 in value, insurance costs can be expected to increase the higher an item’s appraised value. A homeowner could accept that an originally agreed-upon value for certain scheduled items is acceptable, even if it means that they couldn’t replace it at the same quality level should a loss occur.

Insurance companies typically prefer that people insure to full value in order to avoid arguments when a claim is made and to secure higher premiums. To protect against under-insuring, some policies include an “inflation guard” that automatically projects a specified increase in contents value every year. States have different rules about this type of coverage, so an inflation guard may not be available in all locations.

Q. What is/are the main disadvantage(s) associated with over-insuring personal property?

A. Over-insuring personal property is not a common problem. Even in the event of a separation or divorce, home insurance policies specify a time period to notify the insurer that the named insured or spouse is no longer residing at a given location.

How much personal property coverage do I need?

You need enough personal property coverage to replace everything in your home if it is completely destroyed. While people often think of expensive items like electronics and furniture, consider what it would cost to replace everything: towels, dishes, clothes, cosmetics - everything you own.

Homeowners policies provide personal property coverage equal to 50% to 70% of dwelling coverage, but that amount might be too high or too low for your household.

A home inventory is the best place to start.

Record:

The item
Purchase price when available
Estimated replacement cost
Brand and model
Serial number
Purchase date
Photos or videos
Receipts for expensive items

Update your inventory after making major purchases.

How do you calculate personal property coverage?

Calculate personal property coverage by estimating what it would cost to replace everything you own. Homeowners insurance starts with a Coverage C limit that is tied to dwelling coverage, while renters and condo policies require you to choose a personal property amount. A detailed home inventory provides the most accurate estimate.

Personal property coverage is calculated in one of a few ways:

For homeowners insurance: A percentage of your dwelling coverage, which can be adjusted based on a home inventory
For renters insurance: A home inventory
For condo insurance: A home inventory

To calculate personal property coverage based on a home inventory, follow these steps:

Go through your home or rental and create an inventory of all your items. Most insurance companies offer one.
You may want to photograph or video your belongings and keep a copy in a safe place. It may come in handy if you have to make a claim.
Do a rough tally of the value of your items to check and see if they fall within your homeowners or renters insurance personal property coverage limits. You may need to increase your coverage.
Get any high-value items appraised and add floaters as needed.

What's the difference between HO-3 and HO-5 personal property coverage?

Standard homeowners insurance, called HO-3, covers personal property on a named perils basis, which means your belongings are only covered for listed perils. The HO-5 offers increased protection, eliminating many of the limitations of the HO-3 and expanding coverage to include higher limits for jewelry and business personal property.

It's important to note that HO-5 underwriting guidelines can be more restrictive and limited to relatively new and/or well-maintained homes in good fire protection districts.

Many items that would require a scheduled property endorsement on the HO-3 are automatically included in the HO-5. For example, replacement cost on home and contents insurance. This coverage is more expensive than HO-3 coverage but is the best choice if you have a lot of high-value personal property.

How does personal property insurance work for condos?

Condo insurance protects belongings inside your unit through the personal property section of your HO-6 policy. Unlike homeowners insurance, the personal property limit is not based on a percentage of the dwelling limit. You choose a limit based on the value of your belongings and the level of protection you need.

Your HO-6 policy covers loss or damage to your possessions up to the limit you purchase. If necessary, you can buy special coverage (a rider) for certain valuables, such as jewelry. This insurance typically covers loss of use after a fire or storm makes your unit uninhabitable.

How does personal property insurance work for renters?

Personal property coverage is the main purpose of renters insurance. Your landlord's insurance does not cover your property. Like condo insurance, renters insurance doesn't use a percentage of dwelling coverage for personal property (there's no dwelling coverage on a renter's policy), so you must calculate how much you need.

Renters insurance reimburses you if your belongings are stolen, damaged or destroyed while in your home and even away from home, with more limited coverage.

Renters insurance personal property coverage is also actual cash value - meaning it's the depreciated amount unless you opt to purchase replacement cost coverage.

Does renters insurance cover your roommate's personal property?

No, your renters insurance does not automatically cover an unrelated roommate's belongings. A roommate needs a separate policy unless your insurer allows both of you to be named on the same renters policy. Rules and insurer practices differ, so confirm who is insured before assuming one policy protects everyone.

How to save on personal property insurance

You can lower the cost of protecting your belongings by comparing insurers, choosing coverage carefully, and reducing risks to your home. Because personal property coverage is part of a homeowners, renters, or condo policy, savings come from lowering the overall policy cost without reducing needed protection.

Several factors determine your rate for home and contents insurance:

The amount of coverage
The quality of coverage (replacement cost on contents insurance versus actual cash value, the inclusion of inflation protection, etc.)
Your history of filing claims
Your credit rating
Your deductible
Your location

If you own or rent in an area subject to expensive hazards, such as crime, catastrophic weather, or fire danger, your rates are likely to be higher. If your neighbors file frequent claims (even if you don't), your rates may be higher. You may pay more if your home is not well-maintained or is very old, or is in poor condition. To save on home contents insurance, consider the following three tips:

1. Improve your property

While you can't change your home's location easily, you can maintain or upgrade it. Make improvements that could make your home safer and lower your premiums, such as:

Add storm shutters
Reinforce your roof
Modernize your heating, plumbing, and electrical systems
Add a home security system and/or safe
Install fire sprinkler systems

2. Reduce your personal risk profile

You can help manage your insurance costs by avoiding unnecessary claims, selecting the highest deductible you can comfortably afford, and ensuring the information used to rate your policy is accurate.

Some ways to improve your insurability include:

Improve your credit score, and when it increases, ask your insurer for a premium reduction.
Keep claims to a minimum. If you filed one in the last 3 to 5 years, your rate may be higher.
Be selective of who you invite to your home to reduce the chances of injury or damage claims against you if someone slips and falls or your dog bites a guest.

3. Compare to save on personal belongings insurance

It's smart to shop around and review your homeowners coverage each year. There are many items to consider when buying homeowners insurance, and your current insurance carrier may not be offering the best price.

Ask about discounts for:

Switching insurers
Staying with your current insurer
Bundling your policies
Increasing your deductible
Retirement
Your profession (teachers, doctors, and more).

How do personal property insurance claims work?

A personal property claim starts when you report stolen, damaged, or destroyed belongings to your insurer after a covered loss. The insurer will ask for information about what happened and what you lost. Your home inventory, photos, receipts, and appraisals can help document the items and support the value of your claim.

If the insurance company approves the claim, the insurer will estimate the cost to repair or replace the item or items. The estimated amount will vary depending on whether you have actual cash value or replacement cost coverage.

Here are the differences between actual cash value and replacement cost value:

Actual cash value. The insurer pays you for the depreciated value of the item. This is calculated as a percentage of the purchase price for every year since it was new.
Replacement cost. The insurance company reimburses you for the cost of replacing the item with a brand-new one at current prices.

As with all claims, you can appeal the valuation of your items if you don’t agree.

How to find the best personal property insurance

The best personal property insurance gives you enough coverage to replace your belongings, protects the risks that matter to you and fits your budget. Because contents coverage is part of homeowners, renters or condo insurance, compare the entire policy rather than choosing an insurer based only on its personal property limit.

Before buying, create a home inventory and estimate the cost to replace your belongings.

If you own expensive jewelry, artwork, collectibles, or other valuables, ask how much the standard policy covers and what it would cost to schedule those items separately.

FAQ: Personal property coverage

How do I know if I have enough personal property coverage?

Compare your policy limit to a full home inventory. If replacing everything at today’s prices would cost more than your coverage limit, you are likely underinsured.

What is the fastest way to estimate personal property value?

Go room by room and estimate replacement cost for everything you own, including small items like clothing, kitchenware and décor, not just big-ticket items.