When you buy home insurance, you get a lot of coverage, including private property insurance. Sometimes referred to as contents insurance or home insurance, personal property insurance protects your belongings and is a valuable part of your home insurance.
What is personal property insurance?
Personal property insurance is part of your standard homeowner’s, renter’s or apartment insurance and is known as Coverage C. It protects your possessions (aka the items in your home).
The amount of personal property insurance a policy offers can vary by insurer, but is generally a certain percentage of the amount of homeowner’s insurance you have. Home insurance, known as Coverage A, protects the physical structure of your home.
So if you have $250,000 worth of home insurance and your personal property is set at 50% of that amount, then you have $125,000 of protection.
What does personal liability insurance cover?
Personal liability insurance covers your belongings, including furniture, clothing, household appliances and the like. If your property is damaged or stolen as a result of an insured peril, the insurance company will pay to repair or replace those items up to the maximum amount specified in your policy for that coverage.
A deductible is usually included, i.e. the amount you pay for the damage before the insurance company pays.
Insurance cover also extends to items you keep in your car or take with you on holiday. Your policy may also cover items belonging to friends or family members in your home, such as: B. a borrowed musical instrument.
If it’s stolen during a burglary and your homeowner’s insurance doesn’t cover it, you may have coverage under your homeowner’s insurance policy to cover the loss, in addition to your own stolen or damaged items.
Claims for personal property are usually covered if the cause of the damage is a named peril, e.g. H. is listed in the policy. Some examples of named risks are:
- Fire
- Smoke
- lightning
- hail
- storms
- theft
- vandalism
- Some companies have an optional add-on that you can add that converts your personal property insurance to manifest perils or all perils coverage. This means that causation could be covered unless causation is excluded.
What does personal liability insurance not cover?
There are some things that private property insurance does not cover, including pets and cars. Under certain circumstances, such as B. Flood damage, private property insurance does not apply either. If you have roommates, roommates, or renters living in your home, their possessions are also not covered by your homeowners insurance. You should consider getting your own personal property insurance to cover your belongings in your home.
Valuables such as jewelry, firearms, cameras, and laptops may only be partially covered by your homeowners policy. For example, you may only have up to $1,500 in jewelry insurance for theft loss. There are other specific items that may also have special coverage restrictions. If you want additional coverage for such items, you must purchase additional protection known as Scheduled Personal Property Coverage.
It is important to review your policy carefully to understand what is and is not covered, as well as any limitations on coverage and claims.
How does personal liability insurance work?
When you file a personal property loss claim, the insurance company pays to repair or replace your affected items in one of two ways: actual cash value (ACV) or replacement value (RCV). Most companies use ACV by default, but give you the option to cover your personal property with RCV. Some automatically include handling personal property as an RCV.
What is Actual Present Value (ACV)?
Actual cash value will reimburse the cost of your personal property less depreciation and normal wear and tear. For example, let’s say you bought a couch for $1,000 four years ago. If you file an ACV claim for the damaged couch, the insurance company will deduct the depreciation and only give you the value of a four-year couch. If the depreciation value is 10% per year, you only get $600 to replace the couch. Your policy discount will further reduce the settlement amount.
What is the Replacement Value (RCV)?
With replacement value, your personal property is insured at its current value. For example, if you use the same $1,000 sofa that you bought four years ago, you will be reimbursed for the cost of replacing the sofa with a similar quality and type of sofa. There is no replacement value write-off, but you are still subject to the deductible, which reduces the total amount of the claim settlement received.
Does personal liability insurance cover valuables such as jewelry?
Yes, your personal property insurance will cover valuables such as jewellery, but there is usually a limit per claim called a sublimit. If someone breaks into your home and steals a lot of $5,000 worth of jewelry, and your home insurance has a $1,500 limit for such damages, your insurance company would pay a maximum of $1,500, minus your deductible.
If you have valuables such as jewelry, artwork, firearms, and certain collectibles, there may be a better solution. Many airlines offer what’s called scheduled personal property coverage, either as a supplement to your homeowners policy or as a separate policy. If you insure an item of value as part of your planned personal property, it is insured for its full value. Insurance companies usually require photos of the items and an appraisal or expert report per item to prove value. Depending on the carrier, you may get a discount for this coverage.
How much privacy protection do I need?
How much personal property insurance you need depends on the type of property you own, how much of it you have and the value of all your belongings. The best way to value all of your personal belongings is to take stock of your home.
Take detailed photos or videos of any room in your home. If you’re shooting a video, don’t forget to describe each item and its value as you see it.
Make a list of all your valuable possessions, such as furniture. Give each item a price and note identifying information such as serial numbers, product age or year of purchase, and make and model from
