Personal Property Coverage, also known as Contents Coverage or Coverage C, is the portion of your home insurance policy that covers the cost of replacing your possessions, or home’s contents, in the event that they are destroyed in a covered peril (wind, fire, hail, lightning, etc).
How much do I need?
The answer depends on what you have and what it’s worth. Typically, the personal property coverage limit for a standard home insurance policy is set at 50%-70% of the amount of dwelling coverage in your policy. In other words, if your dwelling coverage limit is set at $200,000, your personal property coverage limit will be $100,000-$140,000.
That sounds like a lot. However, you might decide to purchase more depending on the value of the personal belongings in your home. The best way to know how much contents coverage you need is to perform a home inventory. A home inventory is a list of all your personal possessions with photos, receipts, and any other proof of ownership you may have.
A home inventory serves two important functions. First, it allows you to calculate the value of your possessions to ensure you are purchasing an adequate amount of contents coverage. Second, it will be your greatest asset in the event of a disaster when you need to prove to your home insurance company that you owned that flat screen TV and $3,000 leather couch, for example.
Remember – always keep your home inventory in a safe or at a friend’s house so it is not ruined in a fire or other natural disaster. Better yet, store a copy electronically.
What if I need additional coverage for a specific item?
Every policy will have limits as to how much it will pay for each type of property. For example, most standard home insurance policies will only pay $1,500 for jewelry lost in theft. Often, a customer will have one particular item that is expensive and needs more coverage than what is included in his or her policy.
At this point it is recommended that you schedule an endorsement on your policy for that item. For example, a policyholder with a necklace worth $10,000 would schedule an endorsement to the policy to cover it. If you think you may need additional coverage, talk to a home insurance agent about scheduling an endorsement on your policy.
Standard home insurance – the rest of the story
Personal property coverage protects your stuff, but do you know which part of your policy protects the structure of your home? Do you know what helps if someone is injured on your property? Here are the other types of protection that usually are part of a standard policy:
Coverage A- Dwelling
Coverage B- Other Structures on Your Property
Coverage C- Personal Property/Contents
Coverage D- Loss of Use
Coverage E- Personal Liability Protection
Coverage F- Medical Payments