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Whether you own your home or you’re renting, personal property insurance provides crucial financial protection for all your most treasured possessions. But to be fully protected, you’ll want to keep an inventory of what you own and how much it’s worth.
What is personal property insurance?
Personal property insurance, also known as contents insurance, covers the cost of repairing or replacing your possessions when they are stolen or damaged due to an insured event. It’s usually included in your homeowners or renters insurance policy.
It covers everything from furniture and appliances to clothing, jewelry and your TV, offering financial protection if any of your items are damaged due to fire, storms, theft and a wide range of other risks.
There are two types of policies available:
- Actual cash value. Actual cash value policies only cover your possessions for their current market value, and most items depreciate in value each year. For example, while your 4K TV might have been worth $5,000 when you bought it a few years back, if it’s destroyed by an insured event and you make a claim, the benefit you receive will reflect its current value — which will be considerably less.
- Replacement cost. Replacement cost policies cover the cost of replacing stolen or damaged items with new equivalent items. For example, if your TV was destroyed, your insurer would pay you enough to buy a new one. This type of policy provides a higher level of protection and therefore tends to be more expensive.
What does personal property coverage include?
Personal property insurance is designed to cover damage to or loss of the contents of your home. This can include:
- Furniture
- Household goods and appliances
- Clothing and personal effects
- Bicycles
- Sporting equipment
- Computers
- Electronics
- Tools
- Artwork
- Jewelry
- Charges on a stolen credit card
- Belongings of guests in your home
- Personal belongings, like your phone or laptop, while not in your home
What’s not covered?
Exclusions will vary between insurers, so it’s a good idea to check your policy to find out exactly how you’re covered. Common home insurance exclusions include:
- Loss or damage above your policy’s limits
- Loss or damage due to construction or home renovations
- Loss or damage from non-covered events, like earthquakes and floods
- Claims that arise while breaking the law or acting recklessly or irresponsibly
- Damage due to mold, termites or bedbugs
- Damage or loss due to a deliberate action by you or another resident or guest
- Leaving your home unoccupied for an extended period of time
Compare home insurance policies with personal property coverage
Does contents insurance cover my personal valuables?
Yes, contents insurance can provide cover for your personal valuables, including items such as jewelry, smartphones, computers, cameras and more. However, it’s important to be aware of any limits that apply to coverage. For example, your laptop may be worth $3,000, but your insurer may only pay a maximum benefit of $1,500 for any one item.
Coverage for possessions outside of your home
Most policies will include off-premises coverage, which covers your belongings outside of the home — like if your phone is stolen from your car. But it may have a lower limit, and not all policies cover off-premises losses the same way, so it’s a good idea to check with your insurer.
Coverage for possessions in storage
If you need to put some or all of your contents into a storage facility for a few months or longer, the good news is that many policies will provide coverage for your possessions while in storage. This means you’ll be protected if your belongings suffer loss or damage due to any insured event.
But terms and conditions will likely apply. For example, your stuff may need to be stowed in a lockable and fully enclosed storage unit that is located in a commercial storage facility and accessible only by you.
If you need to put stuff into storage so you can renovate, downsize or just find some extra space at home, contact your insurer to find out whether they’ll cover you.
What should I look for in a personal property policy?
When comparing policies, keep an eye out for the following features:
- Coverage that’s right for you. Does the policy provide protection against all the risks that may cause damage to your contents? For example, if you live in a high-crime area, you’ll want to make sure theft is covered.
- Flexibility. Can you tailor the coverage to suit your unique needs? For example, can you exclude any coverage you don’t need or increase your deductible to get a lower premium?
- Coverage type. Check if the policy offers replacement value or actual cash value.
- Valuable personal property insurance. If you need to insure jewelry or other expensive items, you’ll want a policy that lets you add on valuable personal property insurance, which gives you higher limits for specific insured items.
- Efficient claims service. Check to see how quick and easy it is to make a claim with the insurer. Does the provider have a good reputation for paying out successful claims promptly and without any hassle?
How much personal property insurance do I need?
The right level of coverage depends on a few important factors:
- Your possessions. What contents to you want to insure? How much are they worth?
- Your budget. How much can you afford to pay for coverage?
- Your risk tolerance. Do you want comprehensive coverage that can replace everything in your home after a major disaster, or would you prefer a cheaper policy that offers lower limits?
Taking inventory
It’s a good idea to go inventory your possessions before purchasing a policy — and update your inventory regularly. It can help you work out exactly how much coverage you need, and will make things easier if you need to file a claim.
Go through your house one room at a time and take pictures of all the important belongings you need to insure, writing down how much each would cost to replace. For example, in a living room this list might include your furniture, TV, stereo, DVD player and gaming consoles, coffee table, lamps and artwork. You can also save any receipts or warranties with your inventory.
Home inventory apps like Sortly and Magic Home Inventory can help make the process run smoothly.
How to save on personal property coverage
To get the best deal on your insurance policy:
- Shop around. The simplest way to find affordable coverage is to compare a range of policies and quotes. Of course, remember that just because a policy offers the cheapest policy doesn’t mean it’s right for you, so check out the full policy details before choosing an insurer.
- Choose a higher deductible. If your insurer offers a flexible deductible, you may want to consider raising it in order to lower your premiums.
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Look out for discounts. Many insurers offer discounts that can help you enjoy significant savings on the cost of coverage. These include:
- Online discounts
- Multi-policy discounts
- Loyalty discounts
- Seniors discounts
- Minimize claims. Making numerous claims on your policy can increase the cost of coverage, so consider whether it’s really worth making a claim before notifying your insurer of any damage.
- Don’t buy coverage you don’t need. Before you start shopping for a policy, take some time to think about how much coverage you need and what risks you need to be protected against. You will then be able to choose a level of coverage that’s adequate for your requirements and can avoid adding unnecessary extra-cost options to your policy.
- Review your policy regularly. The contents of your home are always being changed, updated and upgraded, and so too are the policy options offered. With this in mind, it’s a good idea to regularly review your policy and work out whether you may be able to get a better deal somewhere else.
How do I make a personal property claim?
If you need to make a claim on your home insurance policy, you’ll generally need to:
- Contact your insurer. Contact your insurer as soon as possible after an insurable event occurs. This can be done either online or over the phone.
- Fill out a claim form. You’ll need to provide full details of the event that has occurred and the loss or damage to your contents as a result. This is usually done by completing a claim form, which is often available online.
- Provide supporting evidence. Your insurer may request evidence to support your claim, such as photographs of the damage and receipts, valuations and proof of ownership of the lost or damaged contents.
- Communicate. The last thing you need to do is communicate with the insurer throughout the claim. Be upfront and honest at all times and your claim will be processed as quickly as possible.
Bottom line
Personal property insurance can help make sure that you’re financially protected if your belongings are damaged or stolen, and it’s usually included in other insurance policies. If you’re ready to find a policy that fits your needs, compare homeowners insurance or renters insurance polices to find the right one.
Frequently asked questions about personal property insurance
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