Personal property insurance is the part of your homeowners insurance that covers your belongings (appliances, laptops, TVs, etc.) against covered losses, like fire or theft. Also referred to as Coverage C, personal property insurance covers your personal items both inside your house and anywhere else in the world.
However, certain types of personal property — such as expensive valuables and business equipment — typically have a lower coverage limit than other types of valuables and may require additional coverage. Read on to learn more about how personal property insurance works and how to increase coverage on specific items.
What is personal property?
In homeowners and renters insurance, personal property refers to the stuff you own. Basically anything you moved into your home and anything you’re capable of moving out is considered personal property.
Here’s a look at property that’s covered and not covered under most standard homeowners insurance policies.
Animals, birds, or fish
Business data, credit cards, and electronic fund transfer cards
Property of roomers, boarders, and other tenants
Property in a room or apartment that’s typically rented out
Property that’s rented
Water or steam
What does personal property insurance cover?
Personal property coverage helps pay to repair or replace your personal belongings after a covered loss, such as a break-in or physical damage after a disaster.
Your belongings are covered up to your personal property coverage’s limit of liability, which is the maximum amount your insurer will pay out for a single loss. Your Coverage C limit of liability is located on your home insurance declarations page.
A standard policy protects your personal belongings against the 16 named perils listed on the policy. That means if any of the following cause damage or loss to your personal property, your insurer can help cover the cost of replacement or repairs.
1. Fire or lightning
2. Windstorm and hail
4. Riot or civil commotion
5. Damage caused by aircraft
6. Damage caused by vehicles
8. Volcanic eruption
9. Vandalism and malicious mischief
11. Falling objects
12. Weight of snow, ice, or sleet
13. Accidental discharge/overflow of water
14. Sudden tearing/cracking of appliances
16. Power surges
If you file a personal property claim after a loss, the burden of proof will be on you to prove the loss was caused by one of these perils.
What is not covered under personal property insurance?
Your personal property is only covered against the 16 perils listed on your policy. So if your property is damaged in an earthquake or flood, your belongings won’t be covered unless you have a separate flood or earthquake insurance policy.
Damage caused by wild animals or pests, and appliance breakdown due to internal failure or normal wear and tear is also not covered under a standard policy. However, many insurance companies offer equipment breakdown coverage — a policy add-on that covers appliance breakdown due to electrical or mechanical failure. So if your fridge breaks down because of a broken compressor or your computer’s motherboard fries after a short circuit, equipment breakdown coverage can cover the cost of replacement or repairs.
How much personal property coverage do I need?
Your personal property coverage limit generally defaults to 50% of your policy’s dwelling coverage limit, but most insurance companies will give you the option of higher or lower limits depending on how much stuff you own. Your personal property coverage limit should be enough to replace everything in your home.
How to calculate personal property coverage
The best way to estimate the total value of everything you own is by putting together a home inventory. A home inventory with item descriptions and values not only makes it easier to calculate your personal property coverage, but it can also help expedite claims.
Along with taking stock of everything you own, you should also be aware of how your insurance company calculates the value of your personal property when you file a claim. There are two distinct levels of coverage that determine how much you’re paid out for covered personal property losses or damages: actual cash value and replacement cost value.
Actual cash value coverage reimburses you for the depreciated value of an item. Depreciation refers to the decrease in property value due to its age or condition.
Replacement cost coverage pays you the 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 actual cash value of the settlement amount first, and then the remaining amount once you purchase the replacement items.
Consider upgrading to replacement cost personal property coverage
Personal property is generally valued at its actual cash value in a standard homeowners insurance policy, but most insurers will give you the option of upgrading your coverage to replacement cost for a higher premium.
What are special limits of liability?
Personal property insurance includes coverage for jewelry and other types of expensive valuables, but they’re generally only covered up to a capped amount. Here’s a look at property limits for certain types of valuables:
|Items with special limits||Maximum 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|
If you own expensive belongings with special limits of liability, consider a personal articles floater or scheduled personal property coverage endorsement to increase coverage limits on high-value items.
Frequently asked questions
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 and decide to schedule these items via an endorsement, that will likely increase your rates. Upgrading your personal property coverage to replacement cost can also increase your home insurance rates.
Are plants covered by homeowners insurance?
Yes. Trees, plants, shrubs, and foliage come with a limited amount of coverage in homeowners insurance policies — generally about 5% of your policy’s dwelling coverage limit, and a maximum of $500 per tree or plant.
Does personal coverage cover belongings outside of the home?
Yes. Your personal property coverage extends to personal property losses that occur away from your residence, but coverage limits on off-premises losses are limited. Your insurer will generally let you use up to 10% of your personal property coverage limit to repair or replace your items if they’re damaged or stolen away from your house. 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.
Does homeowners insurance cover cannabis loss?
Homeowner insurance covers trees and indoor or outdoor plants on your property, but whether or not that coverage extends to cannabis plants or buds likely depends on if marijuana is legal in your state. If cannabis possession or home cultivation is legal in your state and your buds or plants are stolen or damaged by a covered peril, your insurance company may reimburse you for the loss. However, some insurance companies are hesitant to cover marijuana since it’s still illegal on the federal level, so be sure to talk to your insurance company and ask about how you’re covered.