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Home Improvement

3 Reasons Why You Might Need Personal Property Insurance

Did you know that the number one cause of home fires is unattended cooking? Even if you are careful while you cook, other damages can occur to your home and belongings.

Storms, vandalism, and theft are all unpredictable. If you want protection from these events and more, consider owning a personal property insurance policy.

Keep reading to learn more about this coverage.

What Is Personal Property Coverage?

To understand why you would need personal property insurance, it’s important to know the definition. This is part of a homeowners policy that pays to replace belongings if they get destroyed or stolen.

You can get homeowners insurance here and add a personal addition.

This can include basically anything you own, such as:

  • Appliances that you own
  • Books
  • Electronic devices
  • Furniture
  • Jewelry
  • Sporting equipment

Personal property is broad but there are some items that aren’t included. For example, it usually doesn’t cover pets or cars.

If you are a renter with this policy, your roommate’s belongings won’t be covered unless the roommate is on your coverage plan.

Personal property insurance is sometimes called “Coverage C” and falls under many insurance policies.

Here are a few reasons you’ll need this insurance policy:

1. Named Perils

Your belongings are generally covered on a named perils basis meaning that coverage applies to events that are in the policy. If it isn’t named in the coverage, you aren’t covered.

Standard perils that are mostly covered include the following:

  • Fire or lightning
  • Riot or civil commotion
  • Smoke
  • Theft
  • Volcanic eruption
  • Falling objects
  • Freezing

Other policies have a more generous list of named perils. Some coverage options even have open perils or all risks coverage that increases your protection.

2. Actual Cash Value vs. Replacement Cost

When you make a personal property claim, the payout amount depends on the coverage option you have. Actual cash value policies are the typical, more affordable option.

An actual cash value policy will pay for your damages based on what your items are worth now. For example, if you bought a $700 laptop three years ago, the actual value coverage is going to be less than what you bought it for.

Your insurer will only pay the depreciated value of your laptop along with your other damaged or stolen items.

Replacement cost policies are better but cost a little more to own. If you lose all of your stuff, you’ll be paid out for the cost of the replacement of your items.

This means that if you want to buy a new laptop worth $700, you can.

3. Outside Coverage

A lot of property insurance policies cover belongings anywhere in the world. Personal insurance coverage can help if your suitcase is stolen at the airport or even if your storage unit is damaged in a fire.

In these circumstances, you will likely have some coverage but not be completely covered.

Do You Need Personal Property Insurance?

Personal property insurance isn’t required when you buy or rent a home. However, if you want the most amount of coverage, it’s important to consider this additional policy.

This coverage will act as umbrella insurance under your current coverage plan. If you want your items protected from disaster, you’ll want this policy.

For more informative reads like this, check out the rest of our blog.

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