Personal Property Coverage has to do with the amount your home insurance policy will pay to replace your personal possessions. This includes assets such as clothing, furniture, and other property that may be damaged or destroyed by fire, lightning strikes and another covered peril. Personal Property Coverage is typically only afforded under homeowners insurance policies. Renter’s insurance and condo insurance cover the structure of the building itself, but these forms of insurance don’t cover your personal belongings that may be affected by whatever peril befalls your dwelling.
How Much Coverage Do You Have?
There are two types of coverage under Personal Property Coverage.
Replacement Cost: Replacement costs are factored by how much money it will take to replace the item or items that have been stolen or damaged.
Actual Cash Value: Actual Cash Value calculates the actual price of an item and reimburses you that amount (this uses depreciation to calculate the cost).
For Personal Property Coverage you set your own limits. When you calculate your limit, make sure to factor in the value of the items you have in your home and the cost of replacement if they were to be damaged. Note that your limit will affect how much you pay for coverage.
What About High Price Items?
If you own high-ticket items like expensive jewelry or furs, you should talk to your agent about purchasing additional coverage. Usually, home insurance policies have fixed limits on the amount they’re willing to pay for certain types of property. Purchasing addition coverage helps insure that you’re accurately compensated for your losses.
Other high priced items you may want to consider purchasing extra coverage for include:
- art collections
- book collections
- musical instruments
What Can’t Personal Property Coverage Not Cover?
Insurance companies will only cover losses that are lost under a specific peril. Most home insurance policies are covered for wind, fire, lightning, theft, and other such perils. However, volcano or flood damage may not be covered in a normal home insurance policy. That means items lost in a flood are not covered through your insurance.
If you have purchased additional coverage for those types of peril, your items would be covered through your policy.
If you live in a high-risk zone, where volcanic or flood damage may pose a real threat, it may be worth investing in addition coverage to secure the safety of your home and belongings.