What is Personal Property Coverage?

Personal property home insurance covers your possessions -- such as furniture, appliances, clothing, and electronics -- in the event that they are damaged by a covered peril.

Covered perils can include fires, weather damage, accidents, falling objects, theft, vandalism, riots, power surges and more, but what is included varies by policy. Depending on if you live in a high-risk zone, you may need to purchase separate policies to get coverage for hazards such as wildfires, floods, or earthquakes.

What Items are Covered?

Typical belongings that are protected by personal property coverage include:

• Appliances
• Furniture
• Electronics such as cell phones, TVs, computers, and entertainment systems
• Rugs, curtains, and other textiles
• Clothing
• Toys
• Foodstuffs
• Kitchenware

Depending on the policy, coverage can extend to your personal property outside of your home, such as those in your offsite storage unit.

Additional Coverage Available

To cover jewelry, art, collectibles, music and sports equipment, and other higher value items, you often need to “schedule” or declare these items separately. You do this by “adding a rider,” which means purchasing specific coverage on top of your home insurance policy.

Adding a rider for jewelry and other expensive items is a great way to get your high-value possessions protection. Adding coverage on top of home insurance is usually affordable, as the deductibles tend to be low. You can also enjoy peace of mind with coverage in case you accidentally misplace an item (like losing your engagement ring at the beach).

What is Not Covered?

The following items are not typically covered by standard personal property coverage:

• Vehicles (motor or aircraft)
• Animals of any kind
• Business data or credit cards
• Property of tenants
• Property that you are renting

Keep in mind that anything that isn’t actually owned by the policyholder or their family members cannot be covered under this type of policy.

Though vehicles are not included in personal property coverage, as a homeowner you can qualify for a bundling discount of up to 25% by combining your home and car insurance on the same policy.

Actual Cash Value vs Replacement Cost

When comparing home insurance, be sure to pay attention if your personal property coverage is calculated based off actual cash value or the replacement cost. Here is the difference:

1. Actual Cash Value:  If your possessions are damaged in a covered peril, the cost to replace them will be calculated off the depreciated value. In other words, your payout will equal the current value of your possessions. For example, if your computer cost $1,000 when you purchased it brand new three years ago, it may only be worth $400 today due to its age. In this case, the payout would only be $400.
2. Replacement Cost Coverage:  With replacement cost coverage, your payout is based on how much you originally spent on an item, not the depreciated value. So long as the amount is still below your max coverage limit, you will be paid the full cost of your possessions. Using the example above, you would be reimbursed $1,000 instead of $400 for your computer.

Opting for replacement cost coverage is generally recommended. Your rate may be a little higher, but the added peace of mind can be well worth it. If you are ever in the unfortunate event of needing to replace all your possessions, you could receive a substantially higher payout with replacement cost coverage, which will go in long way in helping you purchase your lost possessions with brand new ones.

Now that you’ve compared the different types of personal property coverage, start shopping quotes from top companies with Compare-Home-Insurance.com!