What Is Personal Property Insurance?

September 09, 2022
A woman examines the personal property she'd need to replace if damaged

Even when people are especially careful with their property, accidents still happen, unpreventable events still occur, and unavoidable costs still pop up. Just like we protect our cars, homes, and our families with insurance, our belongings need some form of protection, too. That's where personal property insurance comes in.
What Is Personal Property Insurance?
Personal property insurance (PPI) is the part of your homeowners insurance that covers personal belongings, such as electronics, furniture, appliances, clothing, etc. Such coverage can be used to repair or replace damaged or stolen belongings if it falls under the relevant and covered scenarios, like theft or certain natural disasters. This type of insurance is also called Coverage C, and it protects your belongings inside of your home and when they're stolen or damaged outside of your home.
Some commonly covered items include:
    •    Computers
    •    Cell phones
    •    Entertainment systems
    •    TVs
    •    Rugs
    •    Art
    •    Firearms
    •    Lamps
    •    Plants
    •    Dishes and utensils
    •    Sports equipment
    •    Bikes
There are three main housing categories that property insurance falls under: homeowners, rentals, and condos. Depending on the provider and type of dwelling, personal property insurance will vary in coverage, limits, and customizations.
Rental Insurance and Condo Coverage
Renters should know that their landlord's insurance policy doesn't cover their belongings, which is why a separate PPI is important if you're renting. Similarly, condos may have different coverage than traditional homeownership. The condo association may cover certain damages that would extend to some of your belongings. However, it's likelier that your condo insurance covers the unit itself and not your personal items.
How Is Personal Property Insurance Coverage Calculated?
There are two main types of personal property insurance: replacement cost and actual cash value. Replacement cost provides the dollar amount of the worth of an item at the time of a claim. Actual cash value provides money based on the depreciated value of an item. In most cases, the actual cost value is considered reasonable coverage for lost or damaged items, which is usually the standard for homeowners coverage. However, you can usually opt for replacement cost coverage at a higher premium if you prefer—both types of coverage have policy limitations and conditions.
Here's an example: let's say you buy a decent camera for $1,000. 5 years later, that camera will have depreciated in value—let's say the camera is now worth $600. For an actual cost value policy, you would get at most $600. With replacement cost coverage, you would be getting the amount it takes to replace the same object for the current market price.
If you want to be able to get the same value from your item compared to when you bought it, a replacement cost policy may be best even though it usually costs more. However, actual cost value is often enough to repair items or go towards replacing them, depending on the item and circumstances. Either way, you should always look at your different policy options and what these terms mean in the context of your insurance provider's policy. Discuss your options with your insurance company to see what coverage would work best for your needs.


Personal Property Beyond Basic Coverage

There are different types of limitations with PPI, meaning that certain policies won't cover certain items, or if they are covered, there are caps on what you can be reimbursed for.


Some items can be included in your policy, though they have certain sub-limits or caps. Such items usually fall under these categories:
    •    Money, coins, precious metals
    •    Jewelry/stones
    •    Silverware, goldware, pewterware
    •    Watercraft
    •    Guns
    •    Business properties
    •    Furs
Depending on what you need on the policy, you may need other personal lines of insurance in order to personalize your coverage.


What is Not Covered Under Personal Property Insurance?

There are always terms and conditions of a homeowner insurance policy, so it's important to understand what's covered and what's excluded. For example, while some natural disasters will be covered, damages due to earthquakes usually won't be covered unless you've specifically purchased earthquake coverage. Stolen items should be covered by most insurances, but lost items usually aren't. Contact your insurance provider to discuss what's covered in your policy and get the right protection for your area, personal preferences, and belongings.

Generally speaking, the following items aren't covered in a typical policy.
    •    Aircrafts
    •    Motor vehicles
    •    Property of other tenants or roommates
    •    Rented items
    •    Animals
    •    Business or credit cards


Create A Custom Personal Property Insurance Policy

Despite the many unknowns of life, insurance offers peace of mind for the things that we care about—our families, our homes, and yes, our belongings. From everyday appliances to rare collectibles, everybody has invested time and money into different items that deserve protection. That's why personal property coverage is essential for so many.


Acrisure can help you find home insurance with coverage for the things you actually value. Our experts can help you find the right PPI solution for you, whether that solution is a standard policy or a personalized one. Contact us today to determine what you need covered and the type of policy that will provide the ultimate security.


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