What Is Personal Property Insurance (and How Much Do You Need?)

The things inside your home are valuable to you. Personal property insurance exists to make sure items in your home are covered in case you ever need to replace them.

You may be wondering if this type of insurance is necessary. Personal property insurance can give you peace of mind if replacing the possessions inside your home would cost more than you could reasonably manage in a scenario where they are lost or damaged.

personal property insurance

Have you ever worried that your engagement ring could be taken during a robbery? Does losing thousands of dollars in electronic devices in the event of a fire worry you? Then it may be worth paying a few extra dollars every month for coverage. This is especially true f you keep valuable possessions like jewelry, art, or pricey electronics inside your home.

What Does Personal Property Insurance Cover?

Personal property insurance covers items in your home that have value.

This type of coverage may sound like something that only people who keep flashy jewels or expensive paintings in their homes would need. However, it is actually designed to protect everyday people from having to cover the costs of damaged or stolen items.

Not sure what you’ll need to cover? The insurance company will usually ask you to make a list of the items you own when you sign up for a policy. This ensures the policy has the coverage you need.

What are some of the items in your home you might need to replace in the event of a disaster? Here’s a look at some of the basic items that most policies cover:

  • Furniture
  • Appliances
  • Dishes
  • Silverware
  • Cookware
  • Linens
  • Computers
  • Electronics
  • Tools
  • Clothing
  • Furs
  • Fitness equipment
  • Guns
  • Cash

It’s important to remember that specific policies vary when it comes to what is covered. What can you do if you own items that you don’t see featured on any basic coverage lists as you shop around for quotes? You may be able to purchase extended policies to cover specialty items that aren’t covered under a basic policy.

What About Homeowner’s or Renter’s Insurance?

Wait a minute, you might be thinking, I already have homeowner’s or renter’s insurance. Won’t that cover my personal property?

Yes and no.

Renter’s insurance basically is a form of personal property insurance. It’s not insuring a building, just the things you keep inside of it. And nearly all homeowner’s insurance policies also have some coverage for personal property. This is often in the form of a set amount of general coverage. So if you lost everything in a fire, your insurance company would pay out up to the maximum coverage for your personal goods.

Even if you have this coverage, though, there are a few reasons you might want to check out personal property insurance, as well:

You have especially valuable items

If you have particularly valuable items in your home, like antiques or collectibles or even expensive electronics, you may need a personal property policy. In fact, some homeowner’s insurance policies specifically prohibit coverage for especially valuable items.

In this case, you have a couple of options. You can either add a rider to your homeowner’s insurance policy to cover these items separately. Or you can purchase a separate personal property insurance policy. Either way, the additional coverage is likely to be quite affordable.

You’re Concerned About Deductibles

If the deductible on your homeowner’s insurance policy is average, it may be $1,000 or more. So if your $3,000 DSLR camera gets stolen, you’re stuck paying $1,000 of it to get the insurance coverage. That could be prohibitive for some of your items that are valuable but not worth paying a large deductible.

Most personal property insurance policies don’t have a deductible at all, or have a minimal deductible. They can get by without one since they’re insuring items of lower value than your home. In fact, you might save money by increasing your homeowner’s insurance policy deductible and then adding personal property coverage as additional insurance!

Types of Personal Property Insurance

For the most part, insurance companies will package general personal property insurance with renter’s insurance or homeowner’s insurance policies. So this is where you’ll want to start when shopping around for these policies.

You can typically customize your personal property coverage when you take out or change your insurance coverage. With your homeowner’s insurance, the property portion of the coverage may be called “contents coverage” because it covers the contents of your home.

However, if you need specific coverage for particular pieces of valuable property, you can purchase this coverage separately. Some companies also allow for you to purchase this type of policy as a rider on your existing insurance policy.

When you’re shopping around for broad property insurance, start with your current insurance company. Increasing your coverage may be more affordable than you’d think! But you can look at any of the insurers below for coverage for specific valuable items.

The Companies With the Best Rates

Personal property insurance can be purchased from companies that offer regular homeowner’s insurance. You’re not always comparing apples to apples when looking at policies from different companies, though.

Rate differences are common because policies vary so widely when it comes to the types of items they cover. Your exact location will also be a big factor regarding the rate you get.

However, some companies are known for consistently offering very affordable and reasonable policy rates. The property claims satisfaction scores for 2017, released by J.D. Power, are a great place to start your search.

Here’s a look at the top five companies last year, ranked in order based on both customer satisfaction and price:

  • Amica
  • The Hanover
  • USAA
  • Nationwide
  • Encompass

Amica ran circles around the competition when it came to receiving high scores for satisfying customers in all categories. The Hanover, USAA, and Nationwide also came in leaps and bounds ahead of their competitors in the very crowded marketplace of property insurance.

It’s worth getting a quote from at least a few of these highly-rated companies to see if just paying a few extra dollars per month could help you have peace of mind. Or, again, you can call your existing renter’s or homeowner’s insurance company to get a quote for additional coverage.

The Bottom Line on Private Property Insurance

You should never acquire personal property insurance just as a formality. Your personal property insurance policy should be, well, extremely personal.

The truth is that signing up for a policy that doesn’t cover the things you’ll actually need to replace is just a waste of money. However, working with an agent to find a policy — and potentially customize your coverage to make sure you have the level of protection you need is important. The best piece of advice to follow when purchasing personal property insurance is to never assume that something is covered without seeing it in writing.

It may also be necessary to purchase coverage that goes above and beyond what a standard policy offers if you have rare or unusual items in your home that hold high monetary values. This is why it’s so important to scrutinize any policy before signing on the dotted line. The best strategy is to work directly with an agent to find or create a policy that covers exactly what you need.

Topics: Insurance

One Response to “What Is Personal Property Insurance (and How Much Do You Need?)”

  1. This is great advice. I learned first hand how important insurance is while my apartment got broken into in grad school. This was after my first apartment flooded soon after college.

    Even if you don’t think you need insurance, you probably do.

Leave a Reply