What Is Considered Personal Property for Home Insurance Coverage?

A homeowners insurance policy typically includes coverage for personal property, which refers to the movable items you own. Knowing the specifics of this coverage helps policyholders assess their protection and ensure possessions are safeguarded against unforeseen events like theft or fire.

General Definition of Personal Property

Personal property includes items not physically attached to your home’s structure. These movable belongings are typically within your dwelling, and coverage often extends to items temporarily away from home, such as while traveling or in a storage unit. Common examples include furniture, clothing, electronics, kitchenware, books, and sports equipment.

This coverage also applies to belongings owned by family members residing in the household. The distinction between personal property and real property, which refers to the dwelling itself and any structures permanently attached to the land, is important for understanding policy limits.

Personal Property with Special Coverage Rules

While many household items are covered under standard personal property provisions, certain categories often have specific limitations. High-value items such as jewelry, furs, precious and semi-precious stones, firearms, and silverware typically have lower sub-limits under a standard policy. For instance, common sub-limits for theft might be around $1,500 for jewelry and furs, and $2,500 for firearms or silverware.

To adequately cover these valuable items, policyholders often need to purchase specific endorsements, such as “scheduled personal property” coverage or “floaters.” These endorsements can provide coverage for the appraised value and may offer broader protection, including perils like mysterious disappearance that standard policies might not cover. Collectibles, such as art or antiques, and certain musical instruments or valuable sports equipment, may also require specific scheduling or separate policies.

Business property stored at home typically has coverage limitations, often around $2,500 for items on the premises and $500 for items away from the premises. Standard personal property coverage does not include motor vehicles, land, or items permanently affixed to the home. Damage from certain widespread natural events like floods or earthquakes is usually excluded from standard policies and requires purchasing separate, specialized insurance.

Determining the Value of Personal Property

When a claim is filed, insurers use one of two primary methods to value personal property: Actual Cash Value (ACV) or Replacement Cost Value (RCV). Actual Cash Value policies reimburse you for the replacement cost of an item minus depreciation, which accounts for its age, wear, and tear. For example, a television purchased several years ago would be valued at its current, depreciated worth, not what it would cost to buy a new one today.

Replacement Cost Value pays the cost to replace a damaged or lost item with a new one of similar kind and quality, without any deduction for depreciation. If your television is stolen, an RCV policy would provide enough to purchase a new television of comparable model and quality. While RCV policies have higher premiums, they offer a greater payout, helping to restore your possessions. The valuation method for your personal property coverage can be found by reviewing your policy declarations.

Creating a Personal Property Inventory

Developing a comprehensive inventory of your personal property is a step that streamlines the insurance claims process. This detailed record serves as proof of ownership and helps ensure accurate valuation of your belongings. An inventory helps you and your insurer determine the appropriate amount of coverage needed and expedites claim payouts.

To create an inventory, systematically document your belongings. This includes taking photos and videos of individual items and entire rooms. For each item, record a description, estimated value, and, if applicable, serial numbers or model numbers.

Keeping receipts for major purchases and appraisals for high-value items provides evidence of their worth. Store your inventory securely in multiple locations, such as cloud storage, an external hard drive, or a safe deposit box, and update it regularly as items are acquired or disposed of.