Personal Property Coverage
Personal property simply means “the stuff you own”—from bikes to laptops, TVs, and jewelry. The relevant coverage for all this stuff is known as Coverage C on homeowners insurance policies.
Personal property coverage in insurance
Did you know that home insurance covers your personal property from certain damages and theft (even theft that occurs outside your home)?
What’s considered personal property, you ask?
Well, it’s basically everything you own, that isn’t a part of your actual home. So that means things like clothing, furniture, jewelry, electronics, and so on. The physical structure of your house—the walls, the roof, the foundation—would fall under a different section of your homeowners insurance policy.
FYI, personal property coverage is also extended to damages to the stuff friends and family may temporarily have left at your place.
For example, say a burglar broke in and stole your friend’s single-speed while you were both out at your local watering hole. Their bike would be considered personal property under your policy when it was stolen, and your insurance policy would cover the loss (if their insurance doesn’t already).
What isn’t considered personal property
Things that wouldn’t fall under the definition of personal property in your insurance policy (even if you own them) are cars and any other motorized vehicle (learn how car insurance has your back here,) or animals, including birds and fish.
Are you a drone fanatic? These fantastic flying machines aren’t covered in most states, though they are covered in New York, California, and Virginia—read more here.
If you Airbnb a spare room and your temporary tenant’s suitcases are ruined by a burst pipe, it’s not covered by your insurance. If someone smashes your car’s window in the driveway, it’s a claim for your car insurance policy, not your homeowners insurance. What about damage to the walls of your home? That’d be covered, but under your homeowners policy’s dwelling coverage, the type of coverage protecting the structure of your home.
Examining named perils and personal property coverage
Standard homeowners policies cover named perils—bad things that may happen to your property—including fire, lightning, windstorm, hail, smoke, vandalism, theft, freezing, damage from aircraft or vehicles, and riots, to name a few.
So, if a fire in your kitchen destroys your stuff, or someone breaks in and steals your TV, you’re covered by your personal property coverage.
That said, some types of property have sublimits, which means there is a maximum amount your insurance will cover you for. This maximum is usually lower than the personal property coverage limit you choose. Always check your policy to see what sublimits might pertain.
Jewelry, for example, has a $1,500 sublimit for losses due to theft. So even if you chose a $10,000 amount for your Coverage C, a base policy would only cover jewelry theft up to $1,500 (after you’ve met your deductible).
Not to worry, though! If you’ve got certain types of valuables—like engagement rings, or fine art, or musical instruments—you can schedule personal property (what we at Lemonade call adding Extra Coverage) for the stuff you care about at a relatively small additional cost. When you add Extra Coverage for specific items of jewelry, they’ll no longer be subject to that $1,500 maximum sublimit we just mentioned.
Bonus: The items that have Extra Coverage will also be covered for accidental damage and mysterious disappearance, deductible-free! A friendly tip though… make sure you have all the documents, receipts, police report, and any other info you can get for a swift claims process.
How much personal property coverage do I need?
Do yourself a favor and follow these three simple steps to save time (and money!) later:
- Walk around your home, and take pictures (or a video) of your personal property
- Make a list of valuable items, and estimate how much they cost
- For bulk items like shoes, or kitchen supplies, just estimate a nice round number
- Add all of this up and round up to the nearest $10K to determine how much coverage you’ll need
Basic policies start with a personal property coverage amount that is either 40% or 50% of your policy’s dwelling coverage (the specific percentage depends on what state you live in).
Increasing that amount may be a smart move, especially since the effect on your monthly premium might not be that dramatic.