Personal property insurance: What is it and how much do I need?

Personal property coverage protects your belongings, including electronics, appliances, and anything else that you consider your “stuff.” This coverage pays to repair or replace your belongings after a covered loss.

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Personal property coverage is the portion of homeowners insurance that covers the stuff you own (laptops, TVs, cell phones, etc) from losses covered by your policy, including theft, fire, and hurricane damage. If your belongings are ever stolen from your home or damaged by a covered event, you can tap into this coverage to pay for repairs or replacement items.

Also known as Coverage C, personal property coverage covers your belongings outside of your home as well. That means if someone breaks into your hotel room and steals all of your stuff, homeowners insurance can help cover the costs of replacing it.

Key Takeaways

  • Personal property coverage is the section of homeowners insurance that compensates you if your belongings are damaged or stolen 

  • The amount your belongings are insured for will depend on limits in your policy and how the property is valued (actual cash value vs replacement cost)

  • In a base-level home insurance policy, certain expensive valuables, like jewelry, fine furs, and art, have lower coverage limits (usually $1,500 or $2,500) than other categories of personal property. For an additional policy cost, your insurance company will let you increase those coverage limits by adding blanket coverage or scheduling individual valuables

What is personal property coverage (Coverage C)?

In home and renters insurance, “personal property” is another name for the different things you own. Basically anything you moved into the home and anything you’d move out is considered personal property.

If your belongings are burglarized or damaged by a covered loss (also known as a covered peril), this coverage kicks in to cover the cost of repairs or replacement items. Your belongings are covered up to your personal property coverage’s limit of liability, or the maximum amount your insurer will pay out for a single loss. Your coverage limit for each section of your policy is located on your home insurance declarations page.

What does personal property insurance cover?

Personal property insurance covers your belongings both inside your home as well as anywhere else in the world. The types of losses and damages that are covered by your homeowners insurance will depend on your policy, of which there are two main types: named peril policies and open peril policies.

Named peril personal property coverage

Named peril policies cover your personal belongings against the 16 losses, or perils, listed on the policy. A standard HO-3 policy — the most common type of home insurance — covers personal property against named perils. If your personal possessions are damaged or incur a loss due to any of the following, your insurer can help cover the cost of repairs or new belongings.

Covered perilsCovered perils
Fire or lightningTheft
Windstorm or hailFalling objects
ExplosionWeight of snow, ice, or sleet
Riot or civil commotionAccidental discharge or overflow of water
AircraftSudden and accidental damage to water heater or HVAC
SmokePower surges
Vandalism and malicious mischiefVolcanic eruption

Open peril personal property coverage

Open peril or “all-risk” policies are the most comprehensive form of homeowners insurance, covering your home and personal belongings against every type of damage or loss except the specific perils listed on the policy. The advantage of open peril policies is, as the insured, you don’t have to prove if personal property damage or loss is covered by the policy when you file a claim — the onus is on the insurance company to prove that the loss isn’t covered. 

Here are the different causes of personal property loss not covered by homeowners insurance:

Excluded perilsExcluded perils
EarthquakesGeneral wear and tear
Flood damageCorrosion
MoldPests (insects, vermin, rodents, etc)
Foundation cracking from tree rootsIntentional damage
Faulty constructionNatural settling, cracking, shrinking, expanding of the foundation

How much personal property coverage do I need?

When finalizing your homeowners insurance policy, your personal property coverage limit will generally default to 50% of your policy’s dwelling coverage limit (the amount your house itself is insured for). That means if your home is insured for $300,000, your personal property coverage limit would be $150,000. Most insurance companies will give you the option of higher or lower limits of liability for your belongings, depending on your needs.

Finding out your personal property coverage needs depends on the type of property you own and how much it’s all worth. Your personal property coverage limit should be enough to replace everything in your home. 

You should also be aware of how your insurance company calculates the value of your personal property when you file a claim.   

Actual cash value vs. replacement cost value 

There are two distinct levels of coverage that determine how much you’re paid out for covered personal property losses or damages: actual cost value (ACV) and replacement cost value (RCV).

  • Actual cash value coverage pays you for the property loss, but your insurance check is only for the depreciated amount of the item. Depreciation is the decrease in an item’s value due to its age, condition, or other factors

  • Replacement cost coverage pays out the replacement value of your personal belongings without deducting for depreciation. If you have this level of coverage and you file a claim, the insurance company will typically pay out the ACV of the settlement amount, and then the remaining amount once you purchase replacement items

In a standard home insurance policy, personal property is valued at its ACV by default, but most insurers will give you the option to upgrade your coverage RCV to your policy for a slightly higher premium.

How to calculate the replacement cost of your personal property

To estimate the total value of your personal belongings, consider creating an inventory of everything you own. Be sure to include descriptions, prices, and the quantity of items that you’re insuring. Keeping an inventory will help you determine how much coverage you need for your personal possessions, and it’s also something you can point to when claiming a loss.

Personal property coverage for high-value items

Homeowners insurance includes coverage for jewelry and other types of expensive and rare valuables, but they’re typically subject to lower payout limits in a standard policy. Here’s a look at property limits for certain types of valuables: (the amount your house itself is insured for). That means if your home is insured for $300,000, your personal property coverage limit would be $150,000. Most insurance companies will give you the option of higher or lower limits of liability for your belongings, depending on your needs.

Items with special limitsMaximum sublimit
Money$200 (includes coins and medals)
Securities$1,500 (including stamps)
Jewelry$2,500 (when stolen)
Furs$2,500 (when stolen)
Silverware$2,500 (when stolen)
Guns$2,500 (when stolen)
Business property (on premises)$2,500
Business property (off premises)$250

The reason insurers put strict reimbursement limits on jewelry and other expensive property types is because thieves are more likely to target those items if they break into your home. If every jewelry theft claim was met with a payout of its replacement value, insurance costs would skyrocket.

If you own precious metals or expensive keepsakes that are difficult to replace, you have a couple of options to increase your coverage:

See if you can get an enhanced policy

Many insurance companies offer enhanced policy tiers for an additional cost. Our table above illustrates the special limits of liability for a standard homeowners insurance policy, but many insurers including MetLife, Safeco, and others offer premier plans with blanket coverage amounts of $5,000, $10,000 and $25,000 for rare and expensive valuables.  

Purchase a personal articles floater or scheduled property endorsement

This option allows for a little more customization. With a scheduled property endorsement, you indicate which valuables you’d like enhanced coverage for, specify the appraised value of the item, and you’re covered for that amount. The cost of this coverage add-on will depend on how expensive the scheduled item is, but it’s generally about $25 per $1,000 in coverage annually.

Frequently asked questions

What is considered personal property?

Indoor and outdoor furniture, clothing, AC units, TVs, kitchen appliances, bikes, rugs, lawn care equipment, trampolines, and any possessions that you own are all considered personal property. Cars or any other motorized vehicles, pets, and property owned by roommates or landlords are not covered by personal property coverage.

How much does personal property coverage cost?

Personal property coverage is included in every homeowners insurance policy, so you don’t need to pay anything extra to get this coverage. That being said, if you have expensive valuables with low limits of liability and decide to schedule items or add blanket coverage to your policy, that will increase your rates. Opting for replacement cost personal property coverage over actual cash value will also cause your insurance costs to go up.

Are plants covered by homeowners insurance?

Yes, trees, plants, shrubs, and foliage are also covered under a standard homeowners insurance policy — generally about $500 per item. However, trees and plants are not covered for disease or natural collapses.

Does personal coverage cover belongings outside of the home?

Yes, your personal property coverage also extends to personal property losses that occur away from your residence, but coverage limits on off-premises losses are typically limited. If your belongings are damaged or stolen away from your property, your insurer will generally let you use up to 10% of your personal property coverage limit to repair or replace your items. While that may seem like a small amount, if your personal property coverage is $200,000, that’s still $20,000 in coverage for off-premises losses.

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