What Is Personal Property Coverage?
<lingo>When a covered claim occurs, a homeowners insurance policy may provide coverage for the structure. It also provides coverage for the possessions within the home that are lost. This is called personal property coverage. Most policies offer this coverage up to a certain dollar amount.
Personal property coverage may help cover losses related to your furniture, personal belongings, appliances, and electronics. It can apply in cases such as fire, theft, or vandalism. The amount paid by the policy depends on the coverage type listed within the plan.</lingo>
Personal Property Coverage Clearly and Briefly Explained
Most types of home insurance include protection for your possessions, or the items routinely found within your home. It is not as simple as other types of coverage, though. Policies differ from one provider to the next as well.
Most policies pay up to a certain percentage of the homeâ€™s structural coverage. For example, if the policy offers $150,000 worth of coverage for the home, it may cover between 10 and 50 percent of that value in possessions. This would mean you could claim as much as $15,000 or up to $75,000 worth of possessions depending on what occurs.
<twitter>When a covered claim occurs, a homeowners insurance policy may provide coverage for the structure. It also provides coverage for the possessions within the home that are lost. This is called personal property coverage. </twitter>
Policies pay out based on two options, actual cash value or replacement value. If your policy offers actual cash value coverage, it pays out based on the actual value of the item lost. This takes into account depreciation. If the policy pays replacement value, it pays the amount necessary to replace the item with something similar.
Personal property coverage can apply to a wide range of events. This may include storm damage, damage from water resulting from a broken plumbing system or air conditioning system, theft, falling objects, and smoke damage. Policies typically also cover acts of vandalism as long as they were not created by someone living in the home. Some policies offer additional coverage beyond this.
Personal property coverage values should be considered carefully. Property owners with very valuable items or a significant amount of possessions may need to increase their coverage to meet their needs should an event like a fire occur creating significant loss.
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