Personal Property Coverage

Are Your Personal Belongings Covered?

Personal property includes things you own, such as furniture, clothes, jewelry, electronics, sports equipment, etc. Personal property coverage is usually included in homeowner’s or renter’s insurance. This coverage is designated to protect your belongings in the event of a covered loss, for example, theft or fire. Personal property coverage sounds like a good part of your homeowner’s or renter’s policy, but there are some important things to consider when purchasing your coverage.

Homeowner’s and Renter’s Insurance Limitations

A lot of people have a misconception that homeowner’s insurance covers all their personal belongings. It is important to know that there are two types of coverages for personal items. One of them pays for the replacement cost of an item. This coverage pays the amount that is needed to buy a new piece at the time of a claim. The second type of coverage pays the amount based on the current cash value of an item. Generally, homeowner’s insurance provides coverage for dwelling and liability protection and personal belongings. Even though a homeowner’s insurance extends to personal belongings, there are some limitations. Amount paid for personal belongings is subject to the terms described in your policy. It is essential to consult with your agent to know what those limitations are.

Special Items Coverage

Personal belongings is a broad term that may seem to include valuable items as well, but it is not entirely true. Even though most of the times there is coverage for expensive items such as jewelry or collectibles, there are some significant limitations. That is the reason why some of your personal belongings may be underinsured. Most of the standard homeowner’s policies have $1000 limit for such personal items, and this amount is per occasion not per item. Often we do not even realize what is the value of some things we own before we think about it.

Valuables That May Need Additional Coverage:

  • Jewelry and watches
  • Fine Art
  • Antiques
  • Collections, such as comic books or coins
  • Professional Cameras
  • Laptops and Computers
  • Firearms
  • Fur Coats
  • Music Instruments
  • Sports equipment, such as archery, fishing, or skiing
  • Set of golf clubs
  • Bicycles

This list can go on and on because often we do not realize how much things we have. Some of those items can worth way more than a couple of thousand dollars. Paying a little extra for the insurance premium may help you save a lot of money in case of an emergency.  There are two types of insurance that you might want to consider for such items: optional endorsement or personal articles floater.

Optional Endorsement

An endorsement is like an amendment to the existing coverage. It can help to increase coverage limits and expand protection. The endorsement does not list articles individually, so if you have anything that is extremely valuable you might want to look at personal articles floater. For example, the endorsement can help cover watercraft and trailers. Both endorsement or personal articles floater can include something like jewelry.

Personal Articles Floater

The significant difference between personal articles floater is that you can purchase it as a separate policy. This itemized coverage takes into consideration the value of each valuable item. Personal articles floater can be extremely useful when the value of an item exceeds coverage limits under homeowner’s insurance.

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