Home contents insurance, also known as personal property coverage, protects your items from theft and damage

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• Home contents insurance refers to personal property coverage in a homeowners insurance policy.
• It covers you if your home contents are lost, damaged, or stolen.
• Some items like specialty jewelry, fine art, and high-end electronics require add-on coverage. 

You probably paid a good amount of money for the items in your home, so you want to ensure your investments are protected. Personal property coverage sometimes referred to as home contents insurance does just that. Knowing what needs coverage and how much of your personal belongings need coverage is key to being sufficiently insured.

What is home contents insurance?

There are three main components to homeowners insurance: dwelling coverage, personal property coverage, and personal liability coverage. Home contents insurance, or personal property coverage, protects your personal belongings and furnishings from damage to covered events known as insurance perils. A peril is an event that causes damage to your home or belongings. Common insurance perils include theft, fire, lightning, hail, and vandalism.

There are limits to standard personal property coverage depending on your policy and insurance carrier. You can usually insure up to $100,000 worth of personal property. If you need more coverage, consider purchasing an endorsement.

What does home contents insurance cover? 

*May need additional coverage per your policy’s  coverage limits

**Exclusion may apply

Homeowner insurance does not cover damages to your personal property caused by earthquakes, floods, government seizures, mudslides, ordinance updates, sewer backups, and sinkholes. These perils will require add-ons or separate coverage.

Specialty items like high-end electronics, special jewelry, furs, fine art, firearms, specialty bikes, and cash may not be covered by homeowners insurance in the event of theft. According to Steve Wilson, senior underwriting manager at Hippo Insurance, these items may need a “personal article” endorsement or add-on rider.

You can purchase a floater policy as an add-on to your homeowners insurance for specialty jewelry. Another option is to purchase standalone personal jewelry insurance. Your jewelry and fine art must be appraised before purchasing a floater or standalone policy. If you have riders for fine art and specialty jewelry, you will be required to catalog and provide appraisals for them. 

How much home contents insurance do I need? 

Homeowners insurance policies typically use “replacement cost” when paying for covered damage. With replacement cost coverage, your insurer will pay to replace the belongings in it and rebuild the destroyed portion of your home with materials of similar value.

Actual cash value (ACV) accounts for the depreciation of an item. For example, if a fire damages your five-year-old leather sofa, the actual cash value considers the age of the sofa in your coverage amount. The actual cash value is usually lower than the replacement cost value.

Flood insurance policies will typically use actual cash value, but you can pay extra for replacement cost coverage. You will also be covered for the appraised value minus the deductible for any specialty jewelry and fine art.

While the more expensive option, having replacement cost coverage will ensure that you can replace your damaged possessions with the same items or items of similar value. You can also level up your coverage by purchasing an inflation guard. Due to rising costs of construction material and labor shortages, the amount to replace your belongings may not be the same as it was years ago. An inflation guard endorsement like guaranteed replacement cost coverage can automatically cover the entirety of your item’s replacement cost, so there aren’t gaps in your coverage. 

How to file a claim if your home contents are damaged or stolen

Treat stolen or damaged possessions like a car accident and follow these steps to report and file a claim.

1. Notify the police and file a police report if it is due to theft. Your insurance company may request a copy of the police report.
2. Take pictures of damaged possessions and what caused the damage (fire, storm, etc).
3. Contact your homeowners insurance company. Failure to timely notify your insurance provider can result in denying the claim.
4. If damage is due to an earthquake, flood, or mudslide, contact that insurance provider.

Like your dwelling coverage, it is important not to neglect to purchase enough coverage for your home contents as the cost to replace your possessions can quickly add up. To get started on your homeowners insurance search, check out our best homeowners insurance guide for our top picks of insurance providers.