Renters insurance will pay your expenses when someone gets injured in your home and you’re liable for his or her medical expenses. It will also pay the additional living expenses you take on if a peril covered by the policy makes your home uninhabitable. But one of the most important coverages in renters insurance is personal property insurance.
The personal property insurance component of your renters insurance policy will pay you to replace most items lost or destroyed in a covered peril. That includes everything from basic belongings to expensive items like your TV and computer. You can also get reimbursed for just about any type of personal property, from furniture and watercraft to your coin or gun collections.
Renters insurance protects your belongings wherever they are in the world. That means property at someone else’s house, in a self-storage unit, or in the back of a moving van. Some property, especially items that are difficult to replace, may be subject to a limit of liability, meaning that the insurance company is only obligated to pay a certain amount for that type of item. Personal property insurance is also a part of homeowners insurance and condo insurance.
What types of personal property are covered?
Nearly everything you own is covered. Your desk, your bedframe, your rug, your coffee table: all covered. Your TV, your PlayStation, your games: also covered. Your laptop, PC, and your smartphone are all covered, as is any jewelry. Items you normally leave outside your home, like a bicycle or doghouse, are also covered, and so are any trees or shrubbery.
How certain items are covered differs from policy to policy, and your specific needs may vary from someone else’s. That means no personal property coverage is the same, especially if you need more coverage for an item than someone else. Because of riders and endorsements, it’s possible to customize a policy to fit your coverage needs.
An expert at Policygenius can help you find an affordable renters insurance policy that covers all your stuff and navigate the available riders that enhance your coverage further.
What types of personal property are not covered?
In fact, because personal property insurance protects so much of your stuff, it’s easier to state what it doesn’t cover. Most renters insurance companies will have more or less the same exclusions, which will be stated in your renters insurance policy.
This is not an all-inclusive list; be sure to look at your policy and talk to your renters insurance agent to confirm whether or not something is covered.
Your car
Damage to your car is covered by your car insurance policy. However, your renters insurance may cover belongings in the car, and it should also cover any radio or stereo equipment installed by the manufacturer.
Animals
Pets are not covered by your renters insurance policy, including any dogs, cats, or other animals, like birds or fish.
Aircraft
If you fly it, it’s not covered, and neither are any parts to repair it. Not excluded: that Royal Air Force Spitfire sitting on your bookshelf, as well as any other hobby aircraft you own.
Hovercraft
This exclusion applies to air-cushion vehicles and flarecraft and any of their parts.
Data
While the storage device is covered, the value of any business data stored on it may not be. That means you can get a new hard drive from the renters insurer, but not a reimbursement for any accounts or intellectual property stored on it.
If your renters insurance company covers data, it may impose a limit of liability on the dollar amount you can reclaim.
Your roommate’s stuff
The property of anyone living with you permanently is not covered unless he or she is related to you. (Relatives include both blood relations and adoptees.) That means any roommates or tenants need to purchase their own renters insurance policy. However, any temporary guest or an employee of your household is covered under your personal property insurance.
Is my personal property covered away from home?
Your personal property is covered anywhere in the world, with some important caveats.
Property located away from your home
Your property is covered whether it’s in a storage unit, a moving van, or your back pocket while you’re traveling through a seedy alleyway in Europe.
However, you may not be able to receive the off-premises property’s full value when filing a claim for its loss. Most renters insurance policies impose a limit on the claim amount for items located away from the dwelling, usually 10% of the carrier’s normal obligation or some dollar amount, whichever is greater.
Property rented out to others
If you rent out your property, it’s not covered at any value the moment it leaves your home. The item will be covered again when the person holding it returns it to your home.
If you simply left the property with someone else, it’s still covered, but at a potentially reduced amount of the insurer’s limit of liability.
Property in a home you rent out
If you regularly rent out one of your homes, property you store there is not covered. You may be able to get more coverage if you use a home-sharing service, like Airbnb, that offers its own insurance plan.
Additionally, ask your renters insurance company if they offer an endorsement for home rentals. It may cost extra to add to your policy, but such a rider could extend coverage to items in the home while it’s occupied by a renter.
Property in a home under construction
Your renters insurance policy will contain coverage for theft and vandalism, but the coverage will not apply if the theft or vandalism occurs in a home that’s under construction and unoccupied.
Property in transit
Most renters insurance policies fully cover your belongings when they’re moved somewhere else, up to the renters insurance company’s limit of liability, as long they’re being moved for two main reasons:
Your home is uninhabitable because it’s being repaired or renovated
Your property has been relocated to a new dwelling before you’ve had time to buy renters insurance for it, up to a certain number of days
Coverage amounts
When you purchase renters insurance, you’re purchasing a maximum amount of personal property insurance (in addition to amounts for the other coverages). The more coverage you need, the higher your premiums will be.
Before you get quotes, make a home inventory of everything you own, and make sure your personal property coverage can reimburse you for all of it. Some covered perils, like fire, can completely destroy everything you own.
Limits of liability
Although most types of property are covered, some are only covered up to a maximum amount, which is called the limit of liability. The limit of liability is baked into the overall maximum coverage amount of your personal property insurance.
Limits of liability work like this: say you have $2,000 worth of jewelry, but your policy limits your coverage to only $1,000 for jewelry, even if your policy offers $10,000 in total coverage. If a covered peril, like a windstorm or an explosion, destroys $10,000 worth your stuff, you’ll get up to $1,000 for the jewelry, and up to $9,000 for the remaining losses.
Items that have a limit of liability are usually high-value items that are difficult to replace, such as:
Trailers
Coins
Silverware
How much are my items worth?
Renters insurance companies generally use two different ways to determine how much your personal property is worth before paying out a claim.
Actual cash value
An item’s actual cash value (ACV) is the price it costs to replace the item minus depreciation. If you paid $1,000 for your double-edged broadsword 700 years ago, the renters insurance company will calculate the value of the sword after you’ve been using it to defend the realm all this time. A policy using ACV may be easier to afford, but it may not offer the coverage you need.
Replacement-cost value
Replacement-cost value, or RCV, is the amount it costs to replace the item as new. In the case of the $1,000 broadsword, because smelting technology has improved so much since the High Middle Ages, it may only cost $500 to buy new. Using the RCV method after a loss, the renters insurance company will pay you $500 minus any deductible that applies, which you can use to buy a new sword or distribute to your serfs. Because RCV may return more value for your stuff, you may have to pay for an endorsement (or rider) to add it to your policy.
Deductible for personal property insurance
Many types of insurance have a deductible, which is the amount you have to pay out of pocket on a claim before collecting on the amount owed to you by the insurer. If a loss does not exceed the deductible, then you won’t receive anything.
For personal property insurance, a deductible works like this: an aircraft lands on your house and destroys most of your things. (Yes, aircraft are a covered peril, as are spacecraft and drones.) You have $50,000 in personal property coverage and a $400 deductible. You suffer $40,000 in damage and file a claim, which is approved in its entirety by the renters insurance company. Limits of liability on individual items notwithstanding, the insurer owes you $39,600.
Say the aircraft just barely clips the side of your building, knocking your $300 smartphone into oblivion but somehow missing everything else. Although your smartphone is covered by your renters insurance policy, it doesn’t exceed the deductible, so you’ll have to pay to replace it out of pocket.
Additional coverage for high-value and collectible items
When high-value items are capped by a limit of liability, they may not be covered to the amount you need. You may have to purchase an endorsement (or rider) to extend full coverage to those belongings, which is also called scheduling. Adding an endorsement will likely raise your premiums.
Scheduled personal property can be anything that isn’t covered by your policy or for which the limit of liability is too low for your needs. Commonly scheduled items include:
Jewelry
Watches
Furs
Precious metals and stones
Gold, silver, or platinum
For example, say you have a prized antique tea set worth $5,000, but your renters insurance company sets a $2,500 limit of liability for it. You may be able to purchase an endorsement pertaining specifically to the tea set to extend coverage to the full $5,000.