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Personal Property Coverage: How Homeowners Insurance Protects Your Belongings


Our homes are not just buildings; they house our most cherished possessions. And the damage—or loss—of these items can have a profound impact on our lives. 

Fortunately, personal property insurance (also called Coverage C) exists to safeguard our possessions. 

Keep reading to learn more about the significance of personal property coverage, including: 

  1. Understanding coverage limits ensure policies align with the value of your belongings.
  2. Creating a thorough inventory of belongings and documentation like photographs and receipts, can help determine adequate coverage.
  3. Opt for replacement cost value coverage to avoid significant out-of-pocket expenses.

What is personal property insurance?

Personal property insurance is protection for belongings—like furniture, clothing, electronics, etc—located both inside and outside of the house. It serves as a safety net in the event of loss or damage caused by covered perils such as fire, theft, and natural disasters. 

Personal property coverage can be used in the event that a homeowner may need to recover the value of their possessions and rebuild their lives in the aftermath of a devastating event.

Understanding coverage limits

Coverage limits are the maximum amount an insurance policy will pay for personal property claims. Such limits are determined by the terms and conditions laid out in the homeowners insurance policy, as well as the value of the insured items. 

It’s important for every homeowner to understand coverage limits to ensure that they align with the value of their belongings. Carefully evaluate the worth of your possessions and consider factors such as inflation, appreciation, and any high-value items that may require additional coverage. By doing so, you can make informed decisions about the policy and insure your personal property adequately.

Itemizing your belongings

Creating an inventory (or itemizing) of your belongings is an important step in determining adequate personal property coverage as part of your homeowners insurance policy. It involves cataloging all your possessions and documenting their details for insurance coverage purposes. 

Here is a step-by-step approach to help itemize belongings:

  1. Begin by going room by room and listing each item, including a description, brand, model number, and approximate value. 
  2. Documentation such as photographs, videos, receipts, and appraisals should also be included.
  3. Utilize mobile apps, spreadsheets, or dedicated inventory software to create and maintain an organized and up-to-date record of your belongings.

Bonus tip: Be sure to store all records, documentation, policy numbers, and contact information in a secure, easily accessible place.

Determining replacement value

When it comes to reimbursing personal property claims, insurance policies often use one of two methods: actual cash value (ACV) and replacement cost value (RCV). 

ACV takes into account depreciation, meaning that the reimbursement will be based on the item's current value in the market. So if you paid $1000 for a laptop eight years ago, you will only be reimbursed for its current value, which will likely be substantially less. 

RCV, on the other hand, covers the cost of replacing the item with a similar one at its current market price, regardless of depreciation. Opting for RCV coverage is highly recommended as it ensures that you can replace your belongings without a significant out-of-pocket burden.

Common exclusions and additional coverage options

While standard personal property coverage typically offers broad protection, there are certain items that may be excluded. Examples of commonly excluded items include jewelry, art collections, or high-value memorabilia. To address these gaps, additional coverage options are available. 

Scheduled personal property endorsements provide specialized coverage for specific items or circumstances that go beyond the standard coverage. Consider assessing the value and importance of any excluded items and consult with your insurance provider to explore options for additional coverage to adequately protect your prized possessions.

Additionally, some personal property coverage is limited to named perils, while other insurance policies cover personal belongings under open perils, meaning many types of losses are covered unless specifically excluded.

Filing a personal property claim

In the event of loss or damage to your personal property, filing a claim is the first step in the claim process. 

Homeowners should promptly notify their insurance carrier about the incident, providing accurate details and supporting evidence. 

Be sure to document the loss or damage thoroughly by taking photographs, videos, and written descriptions of the affected items. Gather any relevant receipts, appraisals, or other proof of value to substantiate your claim. If you previously itemized your belongings, this process should be completed more quickly.

If you are unsure where to begin, speak with your insurance agent who can help get the ball rolling and may be able to connect directly with your carrier.

Importance of homeowners insurance

Personal property insurance plays a pivotal role in homeowners insurance, providing essential protection for your belongings. Understanding your coverage limits, itemizing your belongings, and opting for replacement cost-value coverage are key factors in ensuring that your possessions are adequately protected. 

And don’t forget that additional living expense coverage, personal liability coverage, and property damage insurance are also significant for comprehensive protection.

If you want to learn more about home insurance, be sure to explore our guide, Homeowners Insurance 101.


*We provide this information to help you understand insurance. Any coverage is subject to the terms of your policy. Please refer to your policy and declaration page for complete coverage details.

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About the Author

Alyssa Little | Senior Content Strategist

Alyssa is the Senior Content Strategist at Openly, collaborating with industry thought leaders to provide insightful and informative content in the home insurance space. With over 15 years experience in content marketing strategy, copywriting, and editing, Alyssa has refined her expertise through her work at such companies as Gartner, Nike, and Trupanion. Alyssa holds a BA in History from the University of Puget Sound and an MA in Museum Studies from Newcastle University.

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