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How Much Personal Property Coverage Do You Really Need?

The personal property coverage under your homeowners or renters insurance can help protect your belongings. How much personal property do you need?

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Personal property coverage, also referred to as “contents coverage,” protects the possessions you own in your home. If you turned your home upside down and shook it, personal property covers all the stuff that would “fall out,” like furniture, appliances, and personal items. Your stuff is important and if your home were to face a loss, you’d likely have many things you’d want to replace. In order to for your home or renters insurance coverage to help replace your items, you need to know: how much personal property coverage do you really need?

We take a look!

What is personal property coverage?

Personal property coverage can help replace your belongings from covered perils, like damage or theft. It typically applies to possessions both inside and outside the home, up to your policy’s limits. So, if your computer is covered under your personal property coverage and it’s stolen from your car, your homeowners insurance will likely still pay for a replacement.

Policy types

There are two types of personal property insurance policies: named perils and open perils.

Named perils: This means you are only covered by the perils explicitly listed on your coverage. This typically includes common perils like theft, vandalism, falling objects, explosion, fire, hail, windstorm, lightning, water damage, and more. It doesn’t cover any situations that aren’t directly laid out in the policy.

Open perils: An open peril policy means it protects against all perils except those that are listed. Exclusions usually include earthquakes, floods, faulty construction, mold, corrosion, infestations, and natural wear and tear.

Named perils means your goods are covered for the scenarios that are listed, while open perils means your stuff is covered in all scenarios except those that are listed.

Value of goods

When shopping around for homeowners or renters insurance, there are two “value” types you can put on your possessions with personal property coverage: actual cash value and replacement cost value.

The actual cash value (ACV) pays you what your items are worth today including depreciation. Let’s say you purchased a $3,000 couch 5 years ago. With depreciation, today it’s worth $2,300. With an actual cash value plan, the insurance company would pay you out how much that couch is worth today (so the $2,300).

The replacement cost value (RCV) is the exact amount it would cost to replace the lost item. Typically this is the same number as what you bought it for. So you would get paid $3,000 for a comparable couch to the one you purchased 5 years ago.

Since you’re paid out more in the case of the claim, replacement cost value usually has a slightly higher premium cost than actual cash value. 

Personal property deductible

Most personal property coverage does not include a deductible separate from your homeowners or renters policy deductible. If there is an additional deductible for your contents coverage, it’s usually small and only applicable to high-ticket items.

Learn more here – Understanding Homeowners Insurance: Contents Coverage.

How much personal property coverage do I have?

Personal property coverage is usually included under most homeowners, renters, and condo policies. The coverage is usually a percentage of your total homeowners’ policy. The percentage can range from about 20-50% of your total coverage limits.

For example, your homeowners home structure coverage is $500,000. If your personal property coverage is 40% of that, you would have $200,000 in coverage for your personal property.

When comparing homeowners or renters coverage, the agent will usually tell you the percentage or minimum amount they offer for personal property coverage basic plans. But this may not always be enough coverage to completely cover all of your belongings. So you’ll want to look more in depth at the coverage you actually need for full coverage.

How much personal property coverage do I need?

In general, your personal property coverage is dependent upon your total homeowners’ or renters’ coverage. However, you can customize your coverage based on the value of your possessions. Creating a home inventory and determining the value of your belongings is the best way to determine how much coverage you need.

We recommend going through your home with a fine-tooth comb while doing your homeowners’ insurance. Take note of anything and everything that cost you money and that you would have to replace in the case of a loss. If a fire were to completely destroy your house, how much would you have to spend to replace everything inside? That’s how much coverage you want.

Itemize each belonging with its associated value. Tally up the costs of all your items, and that is usually the value you would need to cover. Some insurance companies look more so at the quantity of items than the value, especially if you have an “actual cash value” policy, so be as specific as possible.

What categories of items should you consider when you take inventory of your home?

  • Furniture
  • Appliances
  • Home decorations
  • Cookware + dishes
  • Silverware
  • Linens
  • Clothing
  • Computers
  • Electronics
  • CDs/DVDs/vinyls
  • Photography equipment
  • Sports equipment
  • Outdoor equipment
  • Power tools
  • Guns
  • Jewelry/watches
  • Furs
  • Cash

High-value items

Some of the above categories may have limits on your basic contents coverage policy. These tend to be high value or specialty items such as jewelry, fine art, guns, musical instruments, certain electronics, collectors’ items, and cash.

You’ll want to consult your insurance agent to learn if your valuables or collector items are covered by your existing insurance policy. A standard homeowners or renters policy may only cover up to a certain amount for high-value items. If the total value of your goods is more than that, you’ll want to consider supplemental insurance, like adding on a rider. Talking with your insurance agent to learn more about insuring high-value items. We recommend having an insurance appraiser tell you the value of the item, so you can ensure that you have the correct value listed on your policy.

Get more information on insuring your valuables here.

How much personal property coverage do you need?

Are all of your belongings completely covered? Have you accounted for the value of all of your possessions under your homeowners or renters insurance coverage? If you haven’t taken a home inventory and discussed your options for insuring high-value items with your insurance agent, you could be under- (or over-) insured.


Not sure you have the right personal property coverage in place? Speak with one of our expert insurance advisors at (844) 824-2887 to review your coverage and questions.

Not by the phone? Schedule an appointment or request a home insurance quote online here:

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Categories: Home, Renters