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Klaus Vedfelt/Getty Images April 25, 2022 Cate Deventer is a writer, editor and insurance professional with over a decade of experience in the insurance industry as a licensed insurance agent. Angelica Leicht is an insurance editor on the Bankrate team. She is truly passionate about helping readers make well-informed decisions for their wallets, whether the goal is to find the right comprehensive auto policy or the best life insurance policy for their needs. Bankrate logo The Bankrate promise
At Bankrate, we strive to help you make smarter financial decisions. To help readers understand how insurance affects their finances, we have licensed insurance professionals on staff who have spent a combined 47 years in the auto, home and life insurance industries. While we adhere to strict editorial integrity, this post may contain references to products from our partners. Here's an explanation of how we make money. Our content is backed by LLC, a licensed entity (NPN: 19966249). For more information, please see our Insurance Disclosure. Bankrate logo The Bankrate promise
Founded in 1976, Bankrate has a long track record of helping people make smart financial choices. We’ve maintained this reputation for over four decades by demystifying the financial decision-making process and giving people confidence in which actions to take next. Bankrate follows a strict , so you can trust that we’re putting your interests first. All of our content is authored by and edited by , who ensure everything we publish is objective, accurate and trustworthy. Our insurance team is composed of agents, data analysts, and customers like you. They focus on the points consumers care about most — price, customer service, policy features and savings opportunities — so you can feel confident about which provider is right for you. We guide you throughout your search and help you understand your coverage options. We provide up-to-date, reliable market information to help you make confident decisions. We reduce industry jargon so you get the clearest form of information possible. All providers discussed on our site are vetted based on the value they provide. And we constantly review our criteria to ensure we’re putting accuracy first. Bankrate logo Editorial integrity
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Bankrate’s editorial team writes on behalf of YOU – the reader. Our goal is to give you the best advice to help you make smart personal finance decisions. We follow strict guidelines to ensure that our editorial content is not influenced by advertisers. Our editorial team receives no direct compensation from advertisers, and our content is thoroughly fact-checked to ensure accuracy. So, whether you’re reading an article or a review, you can trust that you’re getting credible and dependable information. Bankrate logo How we make money
You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey. Bankrate follows a strict , so you can trust that our content is honest and accurate. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The content created by our editorial staff is objective, factual, and not influenced by our advertisers. We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and, services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range can also impact how and where products appear on this site. While we strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service. Bankrate logo Insurance Disclosure
Coverage.com, LLC is a licensed insurance producer (NPN: 19966249). Coverage.com services are only available in . Coverage.com may not offer insurance coverage in all states or scenarios. All insurance products are governed by the terms in the applicable insurance policy, and all related decisions (such as approval for coverage, premiums, commissions and fees) and policy obligations are the sole responsibility of the underwriting insurer. The information on this site does not modify any insurance policy terms in any way. When it comes to insuring your home with a , the first thing that comes to mind may be protecting the home’s structure itself. What’s important to remember, though, is that another crucial part of your home insurance policy is personal property coverage, which extends coverage to the belongings inside your home. This typically includes furniture, appliances, electronics and clothing, and may also include high-value items, like jewelry and artwork. Compare rates and save on auto insurance today! Get quotes Close X RatesRates keep going up in 2022. Compare rates and save on auto insurance today! Get quotes Close X This advertisement is powered by Coverage.com, LLC, a licensed insurance producer (NPN: 19966249) and a corporate affiliate of Bankrate. The offers and links that appear on this advertisement are from companies that compensate Coverage.com in different ways. The compensation received and other factors, such as your location, may impact what offers and links appear, and how, where and in what order they appear. While we seek to provide a wide range of offers, we do not include every product or service that may be available. Our goal is to keep information accurate and timely, but some information may not be current. Your actual offer from an advertiser may be different from the offer on this advertisement. All offers are subject to additional terms and conditions. Compare auto insurance rates
Answer a few questions to see personalized rates from top carriers. Save on auto insurance with quotes from trusted providers like: Drivers switch & save an average of $750+/year Arrow Right Are you overpaying for auto insurance? Arrow Right Safe drivers choose Allstate Arrow Right Powered by Coverage.com (NPN: 19966249) Coverage.com, LLC is a licensed insurance producer (NPN: 19966249). Coverage.com services are only available in . Coverage.com may not offer insurance coverage in all states or scenarios. All insurance products are governed by the terms in the applicable insurance policy, and all related decisions (such as approval for coverage, premiums, commissions and fees) and policy obligations are the sole responsibility of the underwriting insurer. The information on this site does not modify any insurance policy terms in any way. See more providers in Choose from insurers in Show More RATE INCREASE ALERT Rates increased up to 12% this year
Shop for a better rate before you renew your current policy. This advertisement is powered by Coverage.com, LLC, a licensed insurance producer (NPN: 19966249) and a corporate affiliate of Bankrate. The offers and links that appear on this advertisement are from companies that compensate Coverage.com in different ways. The compensation received and other factors, such as your location, may impact what offers and links appear, and how, where and in what order they appear. While we seek to provide a wide range of offers, we do not include every product or service that may be available. Our goal is to keep information accurate and timely, but some information may not be current. Your actual offer from an advertiser may be different from the offer on this advertisement. All offers are subject to additional terms and conditions. Compare auto insurance rates
Answer a few questions to see personalized rates from top carriers. Save on auto insurance with quotes from trusted providers like: Drivers switch & save an average of $750+/year Arrow Right Are you overpaying for auto insurance? Arrow Right Safe drivers choose Allstate Arrow Right Powered by Coverage.com (NPN: 19966249) Coverage.com, LLC is a licensed insurance producer (NPN: 19966249). Coverage.com services are only available in . Coverage.com may not offer insurance coverage in all states or scenarios. All insurance products are governed by the terms in the applicable insurance policy, and all related decisions (such as approval for coverage, premiums, commissions and fees) and policy obligations are the sole responsibility of the underwriting insurer. The information on this site does not modify any insurance policy terms in any way. See more providers in Choose from insurers in Show More The personal property coverage on your home is generally a percentage of the overall dwelling limit. However, your policy may have specific limits, so if you need to insure certain high-value items, it may require an endorsement to do so. That’s why it’s so important to understand how personal property coverage works, what the limitations are, and how the value of your items is calculated — whether actual cash value or full replacement cost. Knowing this information is often the best way to ensure you have coverage that fits your needs. What is personal property insurance
Personal property insures the contents of your home so that they can be repaired or replaced after a covered loss. Your TV, workout equipment, musical instruments, sports paraphernalia and more all qualify for coverage under your homeowners insurance policy. Of homeowners property insurance claims filed in 2019, and theft, according to the Insurance Information Institute (Triple-I). This high percentage helps illustrate how important personal property coverage is, as it can lead to thousands of dollars in losses. Because insurers will need evidence of any damages incurred, it is generally recommended that homeowners keep inventory of their items in the event of future claims. In 2020, 43% of homeowners reported that they kept a home inventory. Because some personal property is valued differently, it may be beneficial to purchase extended coverage limits for items like wedding rings, instruments or artwork. Otherwise, if several high-value items are impacted by a covered loss, your standard home insurance policy may not offer enough coverage to make you financially whole again. Many home insurance companies offer as an endorsement, which gives policyholders extended coverage on their more valuable possessions, both in coverage limits and . For instance, most scheduled personal property endorsements include open perils, where losses resulting from anything other than specifically stated exclusions are covered. What exactly does personal property insurance do
Personal property insurance helps you pay to repair or replace your belongings if they get damaged or destroyed in a covered peril. After you meet your deductible, the insurance company will reimburse you for losses that are covered under your policy. offer personal property insurance in different levels of coverage, which is the maximum amount they will reimburse you for a covered loss. When you purchase a policy, you can choose your level of coverage based on the total value of your items. Higher levels of coverage usually mean you’ll pay a higher premium. Most personal property policies provide coverage for your belongings at of your dwelling insurance. However, you could need less or more coverage depending on the value of your belongings. Learn more: What does personal property insurance cover
Your personal property policy covers all of your personal belongings, wherever you keep them. That includes the interior of your house, yard, shed, car, garage and even in hotels when you travel. However, your items are only protected by covered losses. For example, your insurer likely will not pay out a claim if your lawnmower breaks down or you want to upgrade your refrigerator. While the basic amount of coverage is sufficient for some people, others might need to boost their coverage for added protection. Before purchasing a personal property insurance policy, figure out how much coverage you need based on the total value of your belongings and where you live. Raising your coverage limit will increase your rate, but it is only a fraction of what it would cost if you had to pay out-of-pocket to replace your items. Your dwelling and personal property will be covered differently depending on the type of homeowners insurance policy you have. An HO-3 policy covers dwelling on an open perils basis but personal property is covered on a named perils basis. In contrast, an HO-5 policy covers both dwelling and personal property on an open perils basis. Under the umbrella of personal property coverage are two policy options — open peril and named peril. It is important to understand the differences between these policies and figure out which one makes sense for you. Open peril policy
An open peril policy covers your personal belongings from any type of accidental damages that are not explicitly written as an exclusion in your policy. For this reason, they are typically more expensive than named peril policies. Some of the situations that an open peril policy would cover may include a kitchen fire that causes stove damage or a storm that destroys plants and landscaping. Named peril policy
If you have a named peril policy, the insurance company will only cover certain losses that are specifically stated in your insurance policy. Named perils usually include coverage for damage caused by things like: Fire or lightning Windstorm or hail Explosion Riot or civil commotion Aircraft Vehicles Smoke Vandalism Theft Volcanic eruption Falling object Weight of ice, snow, or sleet Accidental water overflow or steam Sudden and accidental tearing apart, cracking, burning, or bulging of certain household systems Freezing Sudden and accidental damage from artificially generated electrical current For either policy, you will need to determine the dollar amount of how much coverage you need. That will depend on the value of your items, where you live, how much risk you’re willing to take and the amount you can afford to pay if you had to replace your items. Things to consider
When you , your insurance company will pay you after you have met your deductible. However, the amount of money you get is dependent on how your insurance policy calculates reimbursement. This is where actual cash value (ACV) versus (RCV) comes into play. An ACV policy factors in depreciation when determining the value of your items. For example, you may have purchased a laptop five years ago for $1,000, but it is now worth $500 because it has depreciated, or lost value, over time. In the event of a covered loss, the insurance company would reimburse you $500 for that laptop. Most standard homeowners policies (HO-3) use ACV as the default option. On the other hand, an RCV policy doesn’t factor in depreciation. The insurance company will pay to replace your damaged or destroyed items based on their current market value, up to your policy limit. How much should I expect to pay for PPI
Personal property coverage is almost always included on standard homeowners insurance policies. As of 2021, the is $1,393 per year for $250,000 in dwelling coverage. Depending on your home’s location, its age and coverage limits, your premium may be more or less than the national average. For instance, the default coverage level might be too low for your personal belongings, especially if you own valuables. If you have jewelry, art, furs, collectibles or pricey electronics, it is a good idea to consider an enhanced policy, which will raise your annual premium. Additionally, your insurance rate will vary based on whether you have an ACV or RCV policy. Remember that ACV policies are usually the default option for standard homeowners (HO-3) policies and are cheaper. You can choose to change your policy to RCV, but you’ll pay more. While your homeowners insurance might be expensive, there are ways you can save money on your premium. Here are some things you can do to lower the price of your personal property coverage: Upgrade your home: If you own an older home, you can expect to pay more for your homeowners insurance. Old homes tend to be . To possibly save money, you can upgrade your appliances, replace the roof or install safety equipment like a security system. Improve your credit score: People with low credit-based insurance scores tend to have . If you raise your credit score, your insurance provider might lower your annual rate. Avoid filing claims: Claims tend to make your . Avoid filing frivolous claims whenever possible. Consider repairing or replacing inexpensive items yourself, even if it costs you a little money out of pocket. Only consider filing a claim when major losses occur that would cost more than your deductible. Learn more: Bottom line
Having personal property insurance is important, and so is having the right type of policy for your needs. Make sure your policy can sufficiently cover your and your family’s personal belongings in the event of a loss. Decide how much you can afford to pay out-of-pocket to determine your coverage level and which kind of policy you choose. Personal property coverage is an added cost, but it could save you thousands of dollars or more in the long run. Frequently asked questions
What types of damages does personal property insurance cover
In general, personal property insurance includes coverage for the same types of losses covered under a standard homeowners insurance policy. Standard homeowners insurance policies typically cover losses caused by a number of , including theft, vandalism, windstorms, fire, smoke, lightning, hail, weight of ice and snow, explosion and more. However, the specifics of your personal property insurance coverage will depend on your policy and related exclusions.
How much are your personal possessions covered for
The personal property coverage limit on a home insurance policy is typically a percentage of the dwelling amount. The best way to know whether this is enough coverage for your needs is to take inventory of your belongings and estimate how much it would be to replace them. Keep in mind that expensive items, like jewelry, artwork, furs and antiques may have limits and require a separate endorsement to be fully insured.
How do you calculate the replacement cost of personal property
Replacement cost is calculated by the current market value for your items without taking into consideration the depreciation. Because the payouts for losses are typically higher when you have replacement cost coverage, these policies are generally more expensive than actual cash value policies. When shopping for home insurance, be sure to ask the insurance carriers you get quotes from about the type of personal belongings that are covered, the method in which the value is calculated, and other related details to make a decision that’s best for your needs. Methodology
Bankrate utilizes Quadrant Information Services to analyze 2021 rates for all ZIP codes and carriers in all 50 states and Washington, D.C. Quoted rates are based on 40-year-old male and female homeowners with a clean claim history, good credit and the following coverage limits: Coverage A, Dwelling: $250,000 Coverage B, Other Structures: $25,000 Coverage C, Personal Property: $125,000 Coverage D, Loss of Use: $50,000 Coverage E, Liability: $300,000 Coverage F, Medical Payments: $1,000 The homeowners also have a $1,000 deductible and a separate wind and hail deductible (if required). These are sample rates and should be used for comparative purposes only. Your quotes will differ. SHARE: Cate Deventer is a writer, editor and insurance professional with over a decade of experience in the insurance industry as a licensed insurance agent. Angelica Leicht is an insurance editor on the Bankrate team. She is truly passionate about helping readers make well-informed decisions for their wallets, whether the goal is to find the right comprehensive auto policy or the best life insurance policy for their needs. Related Articles