Personal property coverage, also known as Coverage C or home contents insurance, is the section of a home insurance policy that covers your possessions against listed perils in your policy. What your home contents insurance covers depends mostly on the type of item involved and how it was damaged.

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What is personal property insurance?

Personal property insurance covers your belongings inside and outside your home from damage, destruction or theft from causes listed in your home insurance policy. Your personal property can be insured through homeowners, condo or renters insurance policies.

Belongings are covered up to your coverage limits. That means that if items like your furniture, clothes, electronics and other possessions are damaged by a covered threat, you'll be compensated for their repair or replacement ‒ up to your policy’s limits.

What does personal property insurance cover?

Personal property insurance covers a variety of your belongings both inside and outside of your house. You'll want to read your home insurance policy for details, but most home insurance policies usually cover:

  • Furniture
  • Clothing
  • Electronics
  • Appliances
  • Yard tools

Expensive items such as jewelry and art are usually covered to a certain limit. That limit is usually not enough to provide full coverage. To insure your valuables for their full value, you'll want to look into an endorsement, detailed below.

What threats your personal property insurance protects you against depends mostly on the type of policy you have. Specifically, whether your policy has named peril coverage or open peril coverage.

Named peril coverage

Named perils are threats explicitly listed in your home insurance policy. If it isn't written in your policy, named peril policies won’t cover the damages. HO-3 policies, the most common type of home insurance, provide named peril coverage for personal property. The most common damage sources included in a named peril policy are:

  • Wind and hail
  • Fire and lightning
  • Damage due to weight of snow, ice and sleet
  • Volcanic eruption
  • Falling objects
  • Water damage from plumbing or HVAC
  • Frozen pipes
  • Electrical damage
  • Explosions
  • Civil disturbance or riot
  • Vehicular or aircraft damage
  • Vandalism or theft

Open peril coverage

Open peril home insurance policies cover any source of damage in your home unless it is excluded in writing in your policy. This is obviously a much more comprehensive coverage policy than named peril provides. However, open peril coverage policies are often much more expensive as well. Open peril policies can exclude the following:

  • Floods
  • Earthquakes
  • Corrosion
  • Standard wear and tear
  • Mold

You can often buy coverage add-ons or separate insurance policies to cover some of these perils. As an example, flood insurance and earthquake insurance are available as separate policies.

How much personal property coverage should I have?

In order to judge how much personal property coverage you need, we recommend making an inventory list. List all of your belongings in the house along with their dollar values, serial numbers, and make and model details. We also recommend taking photos and videos of your personal property. You will want enough coverage to replace all your possessions in the event of a total loss.

Dollar limits for personal property insurance coverage may vary depending on the policy. Most policies set personal property coverage limits at 20% to 50% of the structure/dwelling coverage limit. So, if your insurance policy has $250,000 in dwelling coverage, your personal property limit will be between $50,000 (20%) and $125,000 (50%). Exact coverage limits are found in Section C of your home insurance policy.

Homeowners insurance riders

Certain valuables, like art and antiques, might have a lower limit amount on what your home insurance will pay out. For example, you may have $200,000 total personal property coverage, but the payout limit for a single statue may be $4,000.

To optimize your coverage of these personal items, consider getting a scheduled endorsement. A scheduled endorsement is an optional add-on that helps you insure your valuables for their full value instead of the limit set by your standard home insurance policy. Below are belongings that you may want to take extra care to protect.

  • Jewelry, watches and furs
  • Antiques and art
  • Firearms
  • Instruments
  • Water craft
  • Valuable rugs
  • Camera equipment
  • Stamp collections or rare coins

How do insurance companies pay out personal property damages?

When you file a personal property claim, the amount of money you’ll get depends on whether your policy has replacement cost or an actual cash value (ACV) payout. The payout difference between a replacement cost or ACV policy can vary greatly.

Replacement cost vs. ACV

Replacement cost is based on what you would have to pay if you bought the item today. Actual cash value takes into account the depreciation of the item's value due to age. Replacement cost coverage pays out your claim based on the current price of the item, even if it is higher than what you paid for it. Replacement cost is the better choice, but it also tends to be more expensive.

How to file a claim for personal property

If your personal property gets damaged by a covered peril, you can contact your insurance provider to submit a claim. We recommend taking photos and videos of the damage from different angles.

Your insurance company may send an adjuster to your home to inspect damages and to determine if your policy covers the damage.

When getting a settlement offer, if you are not happy with the offer, you can reach out to your insurance company and send additional documents or hire a public adjuster who can help dispute a claim.

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