Personal Property Insurance

What is personal property insurance?

Personal property insurance — also known as home contents insurance — is coverage that protects your personal belongings against damage and theft. While the details depend on your specific policy, this part of your homeowners insurance policy generally covers your personal belongings up to your coverage limits for damage or destruction due to a covered loss.

Let’s explore the ins and outs of personal property insurance to ensure the contents of your home are protected.

Personal property insurance — table of contents

1. What does personal property insurance cover?
2. Personal property insurance for jewelry and high-value items?
3. What hazards does personal property insurance protect against?
4. What is excluded from personal property insurance?
5. How much coverage should you have?
6. Actual cash value vs. replacement cost
7. Tips and additional resources

What is covered by personal property insurance?

Your home contents insurance applies to everything you own that resides within the walls of your home or apartment — your clothes, TV and other electronics, furniture, appliances, and so on. What circumstances they are covered against depends on the specifics of your policy.

Most property policies do not cover personal property separately. It’s unlikely you will find an insurance policy to cover just your personal belongings. Your renters, homeowners or condo insurance policy may cover for your liability insurance and your personal property (contents). If you want insurance coverage for your personal property alone, invest in a renters policy (or home or condo).

Does personal property insurance cover appliances?

Home appliances are considered personal property when it comes to insurance coverage designations. As long as your appliance was damaged or destroyed because of a covered peril listed on the policy, insurance will take care of its repair or replacement — the circumstances surrounding the damage sustained by your appliance matters to your insurance company, so it's best to be armed with proof of the peril that caused its state should your insurer inquire.

What appliances will be covered may vary from insurer to insurer, so confirm with the company providing your personal property insurance about which appliances are eligible for coverage. Things that plug-in to an outlet, like a refrigerator or washing machine, are examples of appliances that should be covered. However, appliances that are built-in to your home, like a hot water heater, could be covered by the dwelling portion of your homeowners insurance policy instead. 

Wear-and-tear and maintenance and operational issues related to the age of an appliance are never covered by insurance.

Does personal property insurance cover other home systems? 

Many other systems in your home — including HVAC systems and sump pumps — are not counted as personal possessions, nor are they covered under the dwelling portion of your homeowners coverage. Therefore, if you would like coverage for these oftentimes high-ticket items, you may need to see out equipment breakdown coverage. This add-on coverage is available from most insurers and typically offered a reasonable added premium. 

How personal property insurance handles items outside the home

You'll be glad to know that your personal property coverage follows you outside of your home. However, be aware that items kept outside of your residence are often subject to lower coverage limits than those kept at home. This means that such items — like those kept in a storage unit — are likely to be covered, though the limit may be capped at 10% of your dwelling value. Check your policy or contact an agent to see how your insurance company handles items away from home. 

Plants and personal property coverage: what to keep in mind

Plants, trees, and shrubs are covered under the home contents portion of your homeowners policy. Coverage for these items is typically capped at around $500 per item and does not cover natural deterioration or disease. 

Personal property insurance for jewelry and high-value items

For particularly valuable items, such as jewelry and fine art, most companies will restrict the total amount of compensation allowed. This amount is often referred to as a sub-limit, which varies depending on the type of property that you have. Below are the common sub-limits you can expect for a variety of valuables.

If you own an item that exceeds the limitations listed above, consider an endorsement to your personal property insurance. An endorsement exceeds the coverage limit in order to protect a specific kind of property. For example, a jewelry endorsement would raise your coverage limit for all your jewelry. If you have one piece of jewelry that is valuable, such as an engagement ring, you might want to consider a scheduled endorsement. This additional coverage would require an item-by-item appraisal, but is the best way to protect a valuable item.

Electronic device insurance

Protections for electronic devices is included in most homeowners and renters insurance policies. Insurance companies typically place a limit on the amount of coverage available for electronics at around $1,500, though this can vary by company. Some insurers allow you to add an endorsement to increase your coverage level for these items, but you'll want to check with your company. 

The following electronic devices are typically covered under most policies:

• Tablets  
• Cell phones
• Digital cameras
• E-readers
• Gaming systems (including hand-held gaming devices)
• Laptops or Chromebooks
• Electronic fitness monitoring devices (Apple Watch, Fitbit, etc...)
• Personal navigation or GPS devices

Under most policies, these items are covered against perils such as power surges, fire, theft, and any other peril listed in your policy documents. Accidental damage is sometimes covered, depending on the type of coverage that you have, but normal wear and tear is almost never covered.

Your renters or homeowners insurance policy may not be the only protection that these items have. Many newer items are still covered by the manufacturer warranty or an extended protection plan offered by many retailers. This often includes mechanical failures and, in some cases, things like broken screens. Getting an extended warranty can go a long way in protecting your goods, but remember that your homeowners or renters insurance can also be useful in certain situations.

Some insurance companies may offer special coverage options for electronics. Progressive, for instance, partners with Worth Ave. Group to provide coverage on electronic devices such as laptops, mobile phones, cameras, and more. This coverage is relatively affordable and typically covers more perils than a standard warranty, including drops, submersion in water, and theft. Unlike warranites, this type of coverage doesn't typically have to be purchased at the same time as your device and can even be added to older devices. 

Bear in mind that your deductible will apply, meaning that smaller claims — like a cracked screen on an iPhone — may be worth covering out of pocket. 

What hazards does personal property insurance protect against?

Your personal property coverage protects against the same perils as your homeowners coverage. As such, if you have more robust coverage, your belongings will be protected against more hazards. While you may need to consult your policy documents for more specific information, the following are general guidelines that can help give you an idea of what sort of perils you will be protected against. 

Named peril

If you have a named peril policy for your personal property, you will have coverage against the following perils:

1. Lightning or fire
2. Hail or windstorm
3. Damage caused by aircraft
4. Explosions
5. Riots or civil disturbances
6. Smoke damage
7. Damage caused by vehicles
8. Theft
9. Vandalism
10. Falling objects
11. Volcanic eruption
12. Damage from the weight of snow, ice, or sleet
13. Water damage from plumbing, heating, or air conditioning overflow
14. Water heater cracking, tearing, and burning
15. Damage from electrical current
16. Pipe freezing

If your property is damaged by any of the hazards listed above, you would have coverage up to your policy limits. It is called a named-peril policy because all the perils (causes of loss) are specifically listed on your policy.

Open peril

Another type of coverage for personal property is known as an open peril policy. Here, all the perils that won’t be covered are specifically listed. This coverage is more robust: you only need to prove the excluded perils did not cause the damage.

In an open peril policy, the following hazards are excluded from coverage:

1. Freezing pipes and systems in vacant dwellings
2. Damage to foundations or pavements from ice and water weight
3. Theft from a dwelling under construction
4. Vandalism to vacant dwellings
5. Latent defects, corrosion, industrial smoke, pollution
6. Settling, wear and tear
7. Pets, other animals and pests
8. Weather conditions that aggravate other excluded causes of loss
9. Government and association actions
10. Defective construction, design, and maintenance

What is not covered by a personal property insurance policy?

Certain perils will never be covered by insurance companies — regardless if it’s a named or open peril policy. If your contents are damaged or destroyed by the following perils, you will not have insurance coverage:

1. Flood*
2. Hurricane
3. Mold**
4. Vandalism to vacant dwellings
5. Wear and tear
6. Property damage caused by pets
7. Earthquakes
8. Enforcement of building codes and similar laws
9. Intentional acts
10. Neglect
11. Government acts

*You can add flood/hurricane coverage back to your contents by purchasing a flood insurance policy through FEMA and the National Flood Insurance Policy. This will cover your personal property contents up to $100,000. If the value of your contents exceeds this, consider purchasing another private flood insurance policy.

**You can add limited coverage for mold on many standard property insurance policies.

How much home contents insurance coverage should you have?

While it can vary from one homeowners insurance policy to another, your property personal coverage is usually set to a percentage of dwelling coverage — usually between 50 and 70% of your dwelling amount. If your dwelling amount is $250,000, your personal property coverage may range from $125,000 to $187,500. Typical renters policies will default to $10,000 to $25,000 in personal property coverage. If you are sharing your renter’s policy with a roommate, you might elect to increase this coverage amount.

How to create a home inventory for insurance

You generally have some flexibility for your personal property coverage limit. One way to determine how much coverage you need is to create and maintain a home inventory. This inventory of your possessions can help you keep track of your personal belongings and give you a more accurate picture of how much it will take to replace them. 

While it may seem tedious, putting a home inventory together for insurance purposes is crucial if you must file an insurance claim. To do a household inventory, the more thorough you are, the better off you'll be. The last thing you'll want to do if you face after a devastating loss is to try and rehash all of the possessions that you lost. On top of making the claims process much smoother, a comprehensive list can also help you avoid getting a payout that doesn't cover all of your belongings. Follow these guidelines when creating your home inventory list:

• Start with recent purchases or higher-value items.
• Create a detailed list of all of your possessions. Be as detailed as possible.
• Make a separate category for items that may need special coverage (jewelry, art, musical instruments, etc.)
• List items by group (i.e., specific clothing items or small kitchen appliances)
• Don't forget about important documents like birth certificates and passports. Make copies and, if possible, store the originals in a fireproof safe.
• Along with an online copy of your home inventory, store a copy in a safety deposit box or a fireproof safe.

What's the best way to inventory your property? 5 easy tips for recording your items

While simply listing your items is important, the more detailed that you can be the better. Consider the following when listing your items: 

• Make note of the condition of items.
• Take pictures of your possessions to help or make video recordings. 
• List model numbers or serial numbers.
• Keep any sales receipts or other forms of proof of ownership (especially for higher-value items or collectibles). 
• Update your home inventory as you add new purchases.

Home inventory checklist by room

Getting started on your home inventory list can seem overwhelming. One method is to document your personal belongings room by room. Below you'll find an outline of common items found in each room to help get you started.

• Living room/family room: couches, chairs, bookcases (with individual books if possible), artwork, television, rugs, etc.
• Bathroom: hairdryers, bath products, electric trimmers, etc.
• Kitchen/dining room: Glassware, silverware, china cabinets, small appliances, kitchen gadgets, kitchen tables and chairs
• Home office: computers, monitors, desks, printers, filing cabinets, desk chairs, plants, documents
• Laundry room: Along with your washer and dryer, make note of any other appliances like a clothes iron, ironing board etc.
• Bedroom: Bed, linens, dressers, clothing (be as specific as possible with your clothing items, recalling what you paid for each item). 
• Miscellaneous: Items like sports equipment, lawnmowers, and workbenches should also be included. Don't forget about items that may not be stored at your home, including loaned items or items kept in storage.

4 of the best home inventory apps for iOS and Android

Compiling a home inventory can be an overwhelming task. Luckily, a collection of mobile apps exist to help you through the process. 

• Sortly — Cited by The Balance as the best-in-class home inventory app, Sortly allows you to organize and categorize your belongings in granular detail, down to the serial number. Sortly is available on iOS and Android devices.
• MyStuff2 Pro — This iOS-only application offers a paid version and a lightweight free option for smaller home inventory projects. 
• Encircle — Encircle is a user-friendly, design-forward app for iOS and Android. The free option allows you to document your home's contents with photos and access your entries via mobile or desktop. 
• Inventory Manager — This application is specifically geared toward home insurance inventory-taking, allowing you to easily tally the value of your home's contents. Inventory Manager is available on iOS. 

The Zebra's recommendations are unbiased; we do not receive a commission from any of the above home inventory apps.

If you're looking for a lower-tech way to keep track of your belongings, give the NAIC's Home Inventory Checklist a try. 

Actual cash value vs. replacement cost coverage

Standard personal property insurance coverage will reimburse you for your belongings on an actual cash value basis. Actual cash value, or ACV, means you are reimbursed for what your belongings are currently worth — not what you originally paid for. Replacement cost, on the other hand, will reimburse you based on what it would cost to replace your belongings at the original market value.

If you’re able to, we recommend insuring your personal property contents on a replacement cost basis. While it does increase your premium, you are better compensated for your damaged items.

Tips and additional resources

If you want your contents covered, we recommend you look for renters, homeowners, or a condo insurance policy. This will not only protect your belongings, but also includes liability, the structure of your home, additional living expenses, and other options alongside your contents coverage. For more information on these policies and the amount of coverage that you need, see below.

• Renters insurance
• Home insurance
• Condo insurance

As you decide on your personal property coverage levels, keep the following tips in mind:

• Take an inventory of all your belongings, paying special attention to anything that would fall under the sub-limit category.
• Insure your contents on a replacement cost basis
• Get insurance quotes from as many companies as possible for the cheapest rate.

Sources:

• Insurance Information Institute: Home Inventory
• Insurance Information Institute: What's covered