Published: December 2015
Q: Are my belongings covered by insurance?
A: Homeowners, renters and condo insurance policies typically include coverage to help protect personal items if they're destroyed or damaged in a covered event like a fire, says Tom Baecker, an Allstate agency owner in Saint Paul and Arden Hills, Minnesota. "The coverage is called ‘personal property protection' and it may help protect more items than you think," he says.
Personal property coverage typically helps protect belongings that are not permanently attached to your walls, floors or ceilings, says Baecker. "If you removed the roof from your house, turned the dwelling upside down and shook it, anything that fell out would typically be considered personal property," he explains. That could include items such as clothing, electronics, jewelry, furniture and dishes. Keep in mind that items that you don't own -- for instance, if a landlord owns the appliances in your home -- usually will not be covered by your policy.
And there are some anomalies, depending on where you live. In Baecker's home state of Minnesota, for instance "ice houses" — shelters used while fishing on ice — are covered as personal property, under the terms and conditions of the policy, he says. (As long as you don't attach an axle for towing. In that case, the structure would be considered a trailer and subject to personal property sub-limits.)
Many homeowners policies include personal property coverage equal to a percentage of the insured value of your home's physical structure, explains Baecker. Meanwhile, if you own a condo, the suggested coverage for your dwelling may be influenced by the personal property limit you select.
Regardless of whether you own or rent, one way to help determine how much coverage is right for you is by creating a home inventory. Knowing the cumulative value of your belongings may help you decide what personal property coverage limits are appropriate for you.
Read your policy to learn how much personal property coverage you have and contact your local agent with any questions or to make changes to your policy. "You can always increase your personal property coverage limits if you think you need to," notes Baecker.
Travel: What if your luggage is stolen while you're across the world? Most policies extend a portion of your personal belongings coverage to you no matter where you're located, says Baecker. This is called "off-premises" coverage.
According to the Insurance Information Institute (III), some insurance companies limit your off-premises coverage to 10 percent of your overall personal property coverage. For example, if you have $100,000 of personal property coverage, 10 percent of that — or $10,000 — may be available to help protect your clothing, electronics and other belongings from covered perils while you're away from home.
In your vehicle: What if your golf clubs are stolen from the trunk of your car? "Your auto insurance won't cover them," says Baecker. "However, your homeowners or renters insurance's off-premises coverage would likely cover them."
Moving and storage: Off-premises coverage may apply here, too. So, if your belongings are stolen from a moving truck or a storage facility, you'll likely find that insurance will help cover the loss -- up to the off-premises coverage limits in your policy.
It's important to keep in mind that coverage limits — the maximum protection your policy provides — will always apply. Check your policy to find out how much coverage it includes for personal property, and to learn of any restrictions. You'll likely find that insurance provides more limited coverage for certain items, such as jewelry or furs. You may be able to insure certain items more fully by purchasing scheduled personal property, which can be added to a home, renters or condo insurance policy, says Baecker.
Cash: Many policies won't reimburse you for loss of that emergency money you've stashed at home — or will limit coverage, notes Baecker.
Boats: They generally need their own policy, according to the III. A small boat such as a canoe might be covered by homeowners insurance, but most larger watercraft require specialized insurance coverage.
Business property: If you run a business or work out of your home, you may want to consider a business insurance policy. Most homeowners, renters and condo insurance policies will limit coverage for business inventory and equipment, says Baecker.
While homeowners, renters and condo insurance policies typically include personal property coverage, it's important to understand what limits and restrictions may apply. Review your policy to learn what it helps protect or contact a local agent to ask questions or for help adjusting your coverage.