Personal Property Insurance Policy Considerations


Here are a few things to think about when deciding how to set up your personal property insurance.

Personal property coverage is an aspect of insurance that can cover your belongings — such as furniture, clothing, sporting goods, or electronics — in the event of a covered loss. You can typically insure your personal property through a homeowners, condo, and/or renters policy. 

With the help of Travelers Insurance, here are a few things to consider when it comes to personal property protection: 

Calculating the Replacement Cost of Personal Property

Under most policies, covered personal property losses are settled based on actual cash value at the time of loss, but not more than the reasonable amount required to repair or replace the damaged item. In most instances, the actual cash value is the reasonable cost to repair or replace the damaged item, less a deduction for depreciation.

You could also get optional coverage, like personal property replacement cost loss settlement, that provides for settlement of covered personal property losses based on replacement cost at the time of loss, without any deduction for depreciation. When purchasing your homeowners policy, you’ll need to decide whether you want the actual cash value personal property coverage (which is typically included in a homeowners policy) or the optional replacement cost coverage. Both are subject to applicable policy limits and deductibles.

Typically, standard homeowners policies pay you the actual cash value of your personal property after it is destroyed. That means you will receive payment for the property up to its value, minus however much it depreciated since purchase. For example, a computer you bought for $1,000 eight years ago has significantly depreciated in value, let’s say to $200. If you have an actual cash value policy, the maximum amount you would be paid would be the lesser of the cost to repair it, or $200. If you have a replacement cost policy, the amount you would be paid would be the lesser of the cost to repair or replace the item with a similar new computer.

If you want to be fully insured for your personal property, you may want to purchase personal property replacement coverage on your policy. Replacement coverage means you are getting the exact amount to replace the same object for the current market price. If that computer was $1,000 then, you will get $1,000 to replace it. This may also cost more than the actual cash value version.

Optional Scheduled Personal Property

Some classes of personal belongings, such as the examples below, may have a limited amount of coverage available based on the type of claim:

  • Money or related property, coins, and certain precious metals.
  • Watercraft, including trailers and equipment.
  • Jewelry, watches, and semi-precious stones.
  • Silverware, goldware, or pewterware.

Additional coverage may be available for these items using scheduled personal property, optional endorsements, or separate policies. Personal property protection is highly recommended for items such as these. For example, you can insure jewelry, golf clubs, silverware, and other possessions on a valuable items plus endorsement or on a personal articles floater policy.

Items Not Covered Under a Personal Property Insurance Policy

Keep in mind that certain damage is not covered by homeowners insurance, as the policy contains terms, conditions, and exclusions. For example, if your personal property is damaged in an earthquake, the damage is typically not covered under your home insurance unless you have purchased earthquake coverage. Similarly, damage from a flood is not covered unless you have purchased a separate flood policy. Special limits may also apply to certain properties.

Having a personal property insurance policy offers important protection for the highly-valued possessions that are part of your lifestyle. Whether home for you is a condo, a house, or an apartment, you can help get more peace of mind with the right personal property insurance to cover your needs. Reach out to the Feltner Group to discuss your policy needs today – as independent brokers, we work for you, not the insurance companies, and are dedicated to helping you get the best possible coverage at a great price.