Personal property coverage is insurance for the things inside of your home, including furniture, electronics, jewelry, clothing and much more. When you’re surrounded by them every day, you don’t really think about how much personal property you really have. Computers, TVs, furniture, pots and pans, curtains, bedding, clothing, and shoes – it all adds up over time. If you had to replace it all, it would take a lot more money than you might first think. With personal property insurance, you could replace it all if your personal property is ever damaged, stolen or lost in a covered loss.
Adding Up Personal Property Coverage
Property insurance is typically included as part of a regular homeowners insurance policy. It is often referred to as “Coverage C”. The maximum amount of coverage for personal property can vary depending on the insurance company and policy form used. Coverage amounts are usually calculated as a percentage of the value of your home, regardless of whether the dwelling is a single-family home, condo or other residential structure. The amount of coverage included is usually at least 50-percent of the dwelling’s value, although it is very common to see coverage as high as 80-percent of the value of your home as well.
Because coverage limits are calculated as a percentage of your home’s value, it’s important to pay attention to the value of your personal property in relation to the value of the dwelling itself. The more modest the home, the less personal property coverage you have included with your policy. For example, if you have a relatively inexpensive home with a value of $150,000, you may have as little as $75,000 of personal property coverage. If you have a rich taste, or an extensive wardrobe, you may not have enough coverage. If that is the case, additional insurance can be purchased.
If you rent an apartment, you don’t really have a “dwelling value”, therefore, you need to choose the amount of coverage you need. In order to know how much coverage you should buy, it is best to create a home inventory. Creating a home inventory consists of going room to room recording everything that you own. This would include clothes, furniture, electronics, etc. Having photos of expensive items, such as big screen TVs, computers and other media players, could be useful for tracking the value of your property in addition to keeping receipts.
Examples of Personal Property Coverage
You likely understand, and would expect coverage if you experienced a fire, tornado, burglary or other similar loss. However, you might not know that your coverage not only covers you at home, it also follows you wherever you go. If you’re on vacation and the airline losses your luggage, you’re likely covered, regardless if you’re on a short trip or half-way around the world. Additionally, in certain situations, it can extend to other people and their property. For example, let’s say you were thinking about taking up bicycling, but before buying a bike of your own, you borrowed a friends to see if you liked it. Let’s also say that you took it for a ride, then parked it for just a minute, while you ran into a convenience store to grab a bottle of water. When you come out, your friend’s $2,500 bike is gone. Luckily, personal property that is under your “care, custody, and control” is covered in most cases.
Property Coverage Limitations & Scheduling Property
The amount of coverage we talked about earlier isn’t the only limitation of Coverage C. Your policy may also outline restrictions on how much it will reimburse you for certain types of property, such as jewelry, fine art, firearms, cash and more. There could also be restrictions on how much you can be reimbursed based on how the property was damaged or lost. For example, if your expensive diamond ring was stolen, coverage would likely be limited to no more maybe $1,000 or $2,500, depending on your policy. If you have items such as those listed above, we suggest that you talk to your agent and buy additional coverage or place the property on a schedule.
Scheduled Personal Property
Scheduling special items such as jewelry, or your collection of art, stamps, coins, or whatever it is you collect, is the best way to ensure that they are covered. Though there will be an extra fee to insure scheduled property, the cost is worth it to know that your property is properly insured.
Personal Property Coverage is just one part of a homeowner’s or renter’s insurance policy. Though insurance is important for homeowners and renters alike, if you’re a renter, your personal property could be everything you own. Don’t take chances, check out your homeowners or renter’s policy today to make sure you have ample personal property coverage.
