Personal property insurance, or Coverage C, is part of a standard homeowners insurance policy. It can help you replace or repair personal items in your home, such as clothing, appliances, and jewelry, if they are damaged or destroyed by a covered issue. This coverage can also help you recoup theft-related losses.
Understanding what personal property insurance covers and when can help you decide how much coverage you need and when to file a claim.
How does personal property insurance work?
Personal property insurance will reimburse you for repairing or replacing certain items if a covered event, or peril, damages them. Covered perils generally include:
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Accidental water damage from household systems or appliances
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Burst pipes due to frozen plumbing
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Damage caused by a vehicle or an aircraft
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Electrical currents
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Explosions, riots, or civil commotion
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Falling objects
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Fire, lightning, or smoke
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Theft
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Vandalism or malicious mischief
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Volcanic eruptions
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Windstorm and hail
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Weight of ice, snow, or sleet
Like other types of insurance, personal property coverage includes limits and deductibles.
Personal property insurance limits are typically calculated as a percentage of your dwelling coverage, such as 20% or 50%, though options vary by insurer, policy, and state.
For instance, if your dwelling coverage limit is $400,000 and you choose a personal property coverage that is 50% of your dwelling insurance, your limit would be $200,000. However, it’s important to note that personal property coverage usually includes sub-limits for specific categories like cash, gold, firearms, and precious jewelry.
Your deductible is the amount your insurer will subtract from a claim payment.
Say your kitchen recently caught fire, and you must replace your refrigerator, oven, and range hood. If the total cost to replace those is $5,000 and you have a $1,000 claim, your insurer will issue you a payout for $4,000, while you’ll pay the $1,000 out of pocket.
Like limits, available options vary by insurer, policy, and state, though they often range from $500 to $10,000.
Types of personal property coverage
There are two primary types of personal property insurance coverage: Actual cash value and replacement cost coverage.
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Actual cash value (ACV) accounts for depreciation when calculating your claim payout. As such, your claim payout likely won’t cover the full cost of replacing the item. For example, if a fire damages your five-year-old laptop, your insurer will reimburse you for its current value based on age, not the amount it takes to buy a new computer today.
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Replacement cost coverage reimburses you for the amount it would cost to buy the item in today's market, up to your policy limit.
A personal property policy with replacement cost coverage often costs more, but it could limit the out-of-pocket expenses you incur after a covered loss.
What does personal property insurance cover?
Most personal property insurance covers the following types of items:
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Appliances, including refrigerators, ovens, washers, and dryers
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Collectibles, such as stamps, trading cards, art, and coins.
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Clothing
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Electronics, such as televisions and computers
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Furniture and home decor
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Musical instruments, like guitars and pianos
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Personal items stolen from inside your vehicle
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Sports equipment
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Tools
Coverage can vary by insurer and policy, so always check with your insurer for the most accurate coverage details.
What does personal property insurance not cover?
Personal property insurance likely won’t cover the following:
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Vehicles. Vehicle damage is generally covered by auto insurance, though the type of auto insurance claim you make will depend on the nature of the loss.
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Damage caused by animals. Most policies don’t cover damage caused by pets or livestock on your property.
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Flooding-related damage. A standard home insurance policy does not provide coverage for flood damage.
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Intentional damage. If an intentional act committed by a family household member damages your personal property, your home insurance policy will not cover the cost to repair or replace the item(s).
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Business-related property. Reimbursement for property may be limited, and you won’t receive any compensation for disruption to a home-based business.
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Wear and tear. If an item in your home, such as an appliance, is damaged due to wear and tear, you can’t file a claim.
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Negligence. If a lack of proper care or maintenance leads to damaged property, your policy won’t reimburse you for the loss.
How much personal property insurance do I need?
You should have enough personal property insurance to cover the value of your assets after a total loss.
Completing a home inventory is a good way to determine your coverage needs. You can do this by walking from room to room and documenting your items via photo or video.
A thorough inventory should include all items you’d want covered, but you should always account for high-value items, such as furniture, electronics, computers, jewelry, appliances, etc.
What is scheduled personal property?
Scheduled personal property is an insurance rider, or policy modification, that enhances coverage for high-value items or items with a sub-limit under your standard personal property coverage. Items commonly scheduled include jewelry, art, musical instruments, collectibles, or firearms.
Your insurer may require a photo and appraisal of the item(s) before approving scheduled personal property.
Learn more: Scheduled personal property coverage.
Do I need personal property insurance?
Though not required by law, personal property insurance is generally recommended. If you suffer a loss, such as a fire, hurricane, or theft, personal property coverage can help you recoup.
Without this personal property insurance, you’ll have to pay out of pocket to replace the contents of your home. While minor damage may not lead to significant expenses, if a covered event destroys your home, replacing your possessions can cost thousands of dollars.