Personal Property Coverage

Personal property coverage, labeled Coverage C on a homeowners or renters policy, pays for damage to or theft of your personal belongings: furniture, clothing, electronics, appliances, books, sporting equipment, kitchen items, and similar household contents. It applies when the items are inside your home and, to a lesser extent, when they are temporarily elsewhere -- a standard homeowners policy typically extends some portion of Coverage C to personal property away from home, such as luggage stolen from a hotel room or a laptop taken from a car.

The standard personal property limit is usually set at 50 to 70 percent of Coverage A (your dwelling limit). On a $400,000 dwelling at 50 percent, that gives you $200,000 of personal property coverage. This sounds like plenty until you inventory what you actually own. Most people who complete a room-by-room home inventory find their belongings are worth significantly more than assumed. A single furnished bedroom, bathroom, and closet in a typical home -- with a bed, dresser, nightstands, mattress, linens, clothing, shoes, and personal items -- commonly totals $20,000 to $40,000 in replacement value. Whole-home totals of $150,000 to $250,000 or more are common for established households.

Two important limitations apply to Coverage C. First, the default is often actual cash value for personal belongings, not replacement cost, unless you specifically elect replacement cost contents coverage. An ACV payout on a house fire calculates the depreciated value of every item you owned -- a ten-year-old wardrobe pays pennies on the dollar toward replacing it. Second, sub-limits cap what the policy pays for specific high-value categories: jewelry at $1,500, firearms at $2,500, fine art at $2,500, cash at $200, and business property at $2,500 are common. If you own items in these categories that exceed the sub-limits, schedule them separately by name and appraised value, or purchase a floater policy to ensure full coverage.