What is personal property insurance?

Personal property insurance coverage is the part of a home insurance policy that covers the contents of your home, It will pay to replace your personal belongings if they're stolen or damaged by a covered peril.

Personal property coverage is included with every home insurance policy. It's the primary coverage in a condo or renters insurance policy, which don't cover the entire structure of the home.

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. It's generally set at 50% to 70% of your dwelling coverage, which in turn is based on the replacement cost value of your home.

What does personal property insurance cover?

Personal property insurance will cover anything considered the contents of your home; these are the things you would take with you if you moved. Some examples of covered contents include:

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

Your belongings are even covered if they're damaged or stolen outside of the home, such as in your car, at work, or in a hotel room.

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 anything covered by a scheduled personal property endorsement or floater.

Certain items with a high value or one that's 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, in most cases, appliances are covered by personal property insurance. However, in some cases, built-in appliances may be considered part of the dwelling; this usually applies to air conditioning and other HVAC units.

If you would take it with you when you move, it's considered personal property.

What is not covered by house contents insurance?

Personal property does not cover damage or loss due to any peril that 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.

How do you insure high-value items?

To insure high-value items, you will need a scheduled personal property endorsement or floater to cover those items 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 places special limits on specific types of 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?

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?

As noted above, the cost of an endorsement is based on the value of the insured item. It also depends on the company, where you live, and other factors.

A piece of jewelry, according to GEICO, costs about 1-2% per $100 in value to insure on a floater. So, at the low end, it would cost about $100 a year to insure a $10,000 ring.

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 in kind, in the event of a loss.

Sometimes people are willing to accept a degree of under-insurance 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.

Determining how much personal property coverage you need takes some homework. Homeowners often have more difficulty determining how much personal property insurance to get than with other types of home insurance.

Personal property coverage is typically set at 50% to 70% of your dwelling coverage amount. So, a policy that has $400,000 in dwelling coverage would have $160,000 in personal property coverage if the amount was set at 40%. But you may need much more than that.

How do you calculate personal property coverage?

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 list out all your items as an inventory. 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 a higher limit for jewelry items 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?

Personal property coverage is the primary and largest coverage on a condo insurance policy.

Unlike home insurance, personal property coverage on a condo policy is not a percentage of the dwelling limit, so you need to calculate a coverage amount. Unless you choose to add replacement cost coverage, condo insurance covers contents for actual cash value with depreciation.

Your H0-6 policy covers loss or damage to your possessions up to the limit you purchase. It also covers personal liability and medical payments. 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 policy doesn't cover items belonging to your roommate. A common misunderstanding among renters is that one policy covers everyone who lives in the space. A renters insurance policy only provides home and contents insurance for you and your family living in the unit.

If you have roommates, they'll need their own renters insurance policy to protect their belongings, or you'll all have to agree to purchase one together, with everyone named on the policy.

How to save on personal property insurance

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 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

Take steps to become lower-risk to insure, and you'll save money on your premiums. 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 comparison shop 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?

Personal property insurance claims are just like any other type of homeowners insurance claim.

Contact your home insurance company about the claim. The insurer may ask you to take photos if there’s damage. Share any receipts for the items.

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 brand new 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

Since you don't buy personal property insurance as a standalone policy, you need to shop for it as part of a home insurance package policy. Our best home insurance companies ranking is a good place to start.

As you compare policies, look for companies that offer higher limits or replacement cost coverage at a lower cost. Remember that personal property coverage is only part of the policy and be sure to review all of the coverage to ensure the entire policy meets your needs.

Helpful home insurance tools and calculators