Personal property insurance provides coverage for the items in your home, such as electronics, furniture, jewelry, clothing and more. You tend to gather these items slowly over time and as you live with them every day, you really start forgetting their value. If you update technology often, or have kids getting older who need their own gadgets, the value of your items could really add up. Personal property insurance is the coverage you have to replace all if your “stuff” should you they ever damaged, stolen or lost in a covered incident. If there are items in your home that belong to other people, insurance may also reimburse the owner of that property should something happen to it while it’s under your care, custody, or control.
How Personal Property Coverage is Calculated
Homeowners insurance and renters insurance policies have some level of personal property insurance included as part of the basic coverage, this is referred to as “Coverage C”. While the maximum amount of coverage is different from company to company and policy to policy, it is usually calculated as a percentage of the value of the dwelling, regardless of whether it is a singe-family home, town house, condo or other residential structure. Most frequently, the minimum amount of coverage is 50 percent of the home’s value, but can be as high as 75 percent to 80 percent.
The greater the value of your home, the more coverage you have for your personal property. This is a simple matter of arithmetic, as 50 percent of $500,000 is $250,000 of coverage, while 50% of $100,000 is $50,000. Additional coverage can be bought if you have a lot of personal property or a number of big-ticket items. As with all insurance, eligibility and amount of coverage depends on each personal situation and the policies that are available through the agency.
Examples of Personal Property Coverage
You most likely would expect that you’re covered for a loss in the event of a fire, tornado, or other covered natural disaster. If someone stole from you, you’d expect coverage as well. But what about if the airline losses your luggage or your laptop was stolen from your hotel room? For the most part, Coverage C is with you wherever you go. Even if you’re in another country, you have coverage on the personal belongings you bring with you on vacation.
Additionally, some business property may be covered if it is damaged in your home when a disaster happens, but it will be limited if you have any coverage whatsoever. If you have business property you should talk to your agent about commercial insurance.
Calculating The Value Of Belongings
Your independent insurance agent can help you calculate the value of your belongings and suggest the type and amount of personal property coverage you should have. It would be particularly helpful to make an inventory of all the items in your home. Snapping photos of pricey property, like big screen TVs, surround sounds and computers, as well as keeping receipts, could be useful for keeping track of the value of your property.
Property Coverage Limitations
Like all insurance, Coverage C has its limitations. Beyond the maximum cap of the coverage amount itself, there will very likely be sub-limits for how much you could be reimbursed for specific types of valuable items, such as jewelry, gold, silver, fine art, firearms, even cash. There could also be limits for how much will be reimbursed depending on what happened to the property. For example, you could be compensated more if your firearms were lost in a fire than if they were stolen from your home. If you have many items like these, your agent could suggest that you purchase additional coverage or schedule this property.
Scheduling Personal Property
If you find that you own a lot of property that falls outside the limits of your coverage, scheduled personal property could be the way to get the items covered. This is an optional protection package that can be purchased in addition to the existing homeowners policy to insure high-value items. There will be an additional cost to insure scheduled property, but the relatively small price could be worth the piece of mind knowing that they’re covered.
Purchasing Personal Property Insurance
Heinen Insurance can assist you with purchasing homeowners insurance or a renter’s policy that includes personal property coverage. They will help you calculate the value of your property and make suggestions for how much and what types of coverage would best fit your situation.