Home Insurance Insights
What Is Personal Property Coverage?
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Home Insurance Insights
Whether you live in a single-family modern farmhouse, a brownstone condo, or a cozy loft apartment, you have probably filled it with lots of valuable items. In fact, if you were to take an inventory of all the things in each room of your home and add up the value of these items, you would likely end up with a long list and a substantial grand total.
If some of these belongings—or, in a worst-case scenario, everything you own—were damaged, destroyed, or stolen, it could require significant financial investment to replace the things you lost and make your place feel like home again. However, you usually do not have to shoulder all of this financial responsibility on your own. Standard homeowners and condo unit owners insurance policies, and even many renters insurance policies, typically provide Personal Property Coverage, which can help alleviate some of this burden after a covered loss.
Personal Property Coverage, also known as Coverage C or Contents Coverage, is designed to help with the cost of repairing or replacing a wide variety of belongings, up to the limits in your specific policy, including:
Personal Property Coverage also typically applies to your belongings even if they are not in your home at the time of a covered loss, including if items are stolen from your car or a hotel room.
There are two different methods insurance companies use to determine the reimbursement amount for damaged or stolen personal property—Actual Cash Value (ACV) or Replacement Cost Value (RCV). Using ACV, the insurer figures out how much the item would cost to replace with something of similar kind and quality at today’s prices, but then subtracts depreciation for age or wear and tear. On the other hand, if the insurer uses RCV, there is no deduction for depreciation. It is probably easy to see how having a home insurance policy with Replacement Cost on Contents typically results in a higher claim payout than one with Actual Cash Value on Contents.
Ideally, you will have enough Personal Property Coverage to replace all of your belongings if a catastrophe strikes.
If you are a homeowner, your coverage is typically calculated as a percentage of your home’s Dwelling Coverage. While the actual percentage used depends on your insurance company and the type of homeowners policy you have, usually it will be between 50% and 70% of the coverage limit on your dwelling.
How do you know if your coverage limit is adequate for the things you own and their total value? One way to double-check if your Personal Property Coverage limit is enough is by conducting a home inventory. A comprehensive inventory includes detailed descriptions of every item in your house and their purchase prices. If at all possible, you should also incorporate the purchase date and serial or model number for each item. If you are a condo unit owner or renter, it is even more important to compile an inventory because Dwelling Coverage is not a part of your insurance policy, so this is the best way to figure out how much your contents are worth and need to be insured for.
The more thorough your home inventory is, the easier it will be for you and your local insurance professional to determine whether you have the right amount of Personal Property Coverage or if you should select higher limits. In addition, having this detailed list of belongings at your fingertips may expedite the process should you ever need to file a claim for damaged or stolen belongings.
Another benefit of creating an inventory is that it will help uncover higher-priced items that may not be adequately protected by your home, condo, or renters policy. Personal Property Coverage often has sublimits for specific items or categories of items, like antiques and fine art; engagement rings and watches; rugs and tapestries; silverware and fine china; stamp, card, and coin collections; and more. These types of items may require a Scheduled Personal Property Endorsement to be insured up to their professionally appraised value and for events that are not typically included in a standard home insurance policy.
If you have more questions about Personal Property Coverage, it is time to contact one of the local independent agents in The Andover Companies network. They can review your home, condo unit owner, or renters insurance policy and its current limits, and, if needed, share some solutions that may help broaden the contents coverage protecting your belongings.
Dwelling Coverage is often considered the most critical component of home insurance. It is designed to cover the physical structure of your home, including permanent fixtures and any attached structures.
Since Dwelling Coverage and Other Structures Coverage typically help homeowners pay for repairs, replacements, or the cost to rebuild their property after a covered loss, having the right coverage amounts is crucial.
Whether you select a Named Perils or Open Perils insurance policy can affect which risks your home and its contents are protected against. It is important to know how they differ and what coverage you have.
Most properties are best insured by an HO-3 or HO-5 policy because both policies include six essential home insurance coverages. The key difference is in the coverage they provide for personal belongings.
“I feel comfortable having my insurance with The Andover Companies. I know that if something terrible happens, they will be there to support my family and guide us through the process. Insurance can be confusing, especially when you have multiple policies, but they have simplified the details so we can understand everything easily!”
“The Andover Companies service team is professional, personable, and extremely helpful. We’ve had our homeowners insurance with The Andover Companies for over six years and are happy to have recently added our secondary home with them in another New England state. I highly recommend insuring with them.”
“You can truly understand the value of your home insurance when you have a claim. My husband and I experienced firsthand how easy it was to work with The Andover Companies. A tree fell on our property, blocking the driveway. We submitted a claim with Andover and within days had a check in hand to reimburse us for the tree removal. The process was seamless.”
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