How Much Personal Property Coverage Do You Need?

Looking around your home, you may wonder, what dollar value can you place on your valuables?

When buying home insurance, you will need to have a basic idea of the value of your belongings. Often, buyers focus on only the amount of structural coverage purchased. Structural coverage protects from the cost of damage to the building itself.

Home insurance can also protect your valuables. Don't underestimate the need for the right amount of personal property coverage.

What Is Personal Property Coverage?

Personal property coverage is a specific component of your home insurance policy. It pays you if your belongings, stored within the home, get lost or damaged due to a covered incident. This includes your furniture and clothing, for example.

Should a covered peril such as a fire or theft occur, personal property coverage will pay to have personal items replaced. It may also pay their actual cash value to you. The policy will pay you up to the specific amount listed on the plan or the value of the item, whichever is less.

The Right Amount of Coverage Matters

Having enough personal property coverage is critical.

If you suffer a significant loss, you’ll need to be sure the total amount of coverage is enough to help you to replace items like your clothing, electronics and furniture. To know how much is right for you, take these steps:

1. Determine if you should get actual cash value or replacement cost coverage. Actual cash value pays the current fair market value of the item. It factors in depreciation of the item from the time you purchased it. Replacement coverage pays you enough to re-purchase a new item.
2. Take an inventory of your home’s belongings. Take photos of each of the items you own. This record can help you to estimate value for each item as you go. It also is a valuable tool to use to prove your ownership should you need to file a claim.
3. Consider adding scheduled personal property, a secondary policy to cover high valued items. If you have expensive jewelry, an art collection or other high-value items, this policy adds value to your home insurance for those items specifically.

Having the right amount and type of personal property insurance does not have to be a challenge. Work closely with your home insurance agent to ensure you have the coverage that fits your needs.