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What is personal property insurance?

Fact-checked with HomeInsurance.com

No matter where you live or whether you rent or own, you want a way to protect your belongings. All of the personal property you own — your electronics, furniture, clothes and more — are worth money. Fortunately, when you buy homeowners insurance, you get protection for what you own.

Your home or renters insurance policy has a section in it specifically detailing your personal property insurance, or the protection for all of the belongings you store in your home. The Coverage C section of your policy outlines your personal property coverage. Your policy might also call it contents insurance. In fact, the easiest personal property insurance definition is insurance coverage for the contents you keep in your home.

If you haven’t made adjustments to your policy, you probably have Coverage C protection totaling between 50–70 percent of your Coverage A, or the dwelling coverage in your policy. So, if you’ve insured your house for $400,000 of dwelling coverage and your Coverage C gives you 50 percent, you have $200,000 of protection if you need to replace your personal property after a covered peril like a fire or theft. If you need more protection, you can customize your Coverage C amount to ensure you have enough.

What does home insurance cover?

On top of the structure of your house and the things you store in it, your home insurance policy also protects you against additional living expenses (ALE) if you get displaced from your house by a covered peril and covers your personal liability. 

When will your policy step in to cover costs? Even the most basic home insurance policies (HO-1 home insurance) cover:

  • Fires
  • Explosions
  • Hail
  • Theft
  • Windstorms
  • Vandalism
  • Damage caused by aircraft and vehicles
  • Smoke
  • Civil unrest/riots
  • Volcanic eruptions

You can get broader coverage by opting for HO-2 or HO-3 policies. If you do, your policy will most likely protect you against:

  • Falling objects like tree limbs
  • Freezing household systems
  • Damage caused by the weight of ice, snow or sleet
  • Accidental damage to plumbing and sprinkler systems
  • Accidental water overflow or steam
  • Damage from sudden power surges

Read your policy for the specifics of what is covered and what isn’t so you can get supplemental coverage if you need it. For example, most home insurance policies don’t protect against floods or earth movements like earthquakes. You’ll need separate flood and earthquake policies to defend against those disasters.

Remember the basics

Your home insurance policy pays for repairs to the structure of your house and the cost of replacing your personal property after a covered peril. Know which perils are covered and the maximum amount your insurer will pay out.

How much personal property insurance do I need?

Once you know which perils your home insurance policy protects you against, make sure you have the right level of personal property coverage. In other words, check the policy limit in the Coverage C section of your policy and make sure it’s high enough.

Most people think about protecting their high-value or luxury items, but don’t forget about all of the things in your house that you wouldn’t want to pay out-of-pocket to replace. Some of those pricier items include:

  • Rugs
  • Furniture
  • Clothing
  • Jewelry
  • Kitchen appliances
  • Art
  • Electronics

The best way to make sure you have enough personal property coverage is to create a home inventory. This comprehensive list outlines everything you store in your house. Create your list, looking up or estimating the value of items. When you’re done, total that amount. That’s how much personal property insurance you need.

As you’re making your inventory, take pictures and include receipts and serial numbers whenever possible. Then, if you do need to file a home insurance claim, you’ll have your home inventory ready to support the claim and streamline the process.

Creating a home inventory takes time, but it’s the best way to make sure you have enough coverage and to have proof of your home’s contents when you need to file a home insurance claim. 

Actual cost value vs. replacement cost value

Once you know the worth of all of your home’s contents, you need to make a decision about how you want to protect that worth. Specifically, you’ll need to choose between actual cash value (ACV) and replacement cost value (RCV). 

  • Actual cost value: Over time, the value of your items depreciates. For example, a couch will cost more when it’s new in a store than it does when it is sold online five years later. ACV takes that into consideration, reimbursing you for the amount of the item with depreciation factored in. 
  • Replacement cost value: If you want enough coverage to buy a brand-new couch, you should choose RCV. As the name implies, replacement cost value values the item at the cost to replace it in a new condition. 

If RCV gives you more protection, why doesn’t everyone choose it? It’s more expensive. If you want to keep your policy as affordable as possible and you think you can live with some second-hand or lower-quality items, ACV is for you. 

How much of my high-value items does personal property cover?

You also need to consider protection for your high-value items. As you review Coverage C in your policy, you’ll probably see that there’s a limit (usually about $1,500) for single items. This limit protects your insurance provider from having to pay out a huge sum to replace your great-great-grandmother’s giant diamond ring.

If you have high-value items, consider an enhanced policy to fully protect them. 

What is an enhanced policy?

Ask your agent about enhancing your personal property coverage with a rider. Also called an endorsement or a floater, this is an addendum to your policy that specifically calls out the high-value item and offers protection for it. 

With an endorsement, you can fully protect your expensive items, but be advised that you’ll pay more for this increased protection. Still, though, an enhanced policy usually costs less (and requires less headache) than having to carry both a home insurance policy and a separate policy for your high-value item. 

Who should consider this?

You might want to consider this option if you have expensive items like jewelry, art, rugs, vintage furniture, guns, wine collections or antiques.

How much does personal property coverage cost?

The short answer is: it depends. The amount you pay for your personal property coverage depends on how much coverage you choose, if you pick ACV or RCV and the amount you choose for your deductible. 

What’s more, you pay for personal property coverage as part of your home insurance policy as a whole. Those premiums are based on factors like where you live, the age of your house and the cost to rebuild it.

All told, the only way to know how much you’ll pay for home insurance — and the included personal property insurance — is to get quotes from insurance providers based on your situation. To simplify the process, you can get quotes online or work with an independent insurance agent who can gather quotes from multiple carriers for you to compare.

The takeaway

Your home insurance policy includes protection for all of the personal property you store in your home. To be sure you have the right amount of personal property coverage, make a home inventory, weigh ACV vs. RCV and make sure you have sufficient protection for any high-value items.

Kacie Goff

Kacie Goff is an insurance writer for Coverage.com. She loves taking complex concepts and distilling them down to make it easier for people to understand their coverage options. Over the last five years, she’s written about personal and commercial coverage for Bankrate, Freshome, The Simple Dollar, local insurance providers and more.

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