Published: March 2016
Personal property coverage is a key part of most homeowners and renters insurance policies. This protection may help you pay to replace your belongings — furniture, televisions and appliances, for instance — if they are damaged or destroyed by certain covered losses, often referred to as perils.
No one expects to experience a loss. But suppose your belongings were ruined in a fire or stolen from your home. Do you know how insurance may help?
A 2015 survey conducted by Allstate* revealed that the majority of homeowners and renters are confident that they understand their insurance policies and have adequate protection in place.
In addition, nearly 85 percent said they understand they can choose their own coverage levels (referred to as "limits" in insurance policies). But the same survey of 500 home, renters or auto insurance policyholders indicated that some people aren't as clear about how personal property coverage works.
For instance, survey results revealed:
- 41.1 percent are either uncertain whether clothing is included in personal property coverage or they believe it is not included. According to the Insurance Information Institute, clothing is typically covered after a loss caused by a peril listed in your policy. It's important to remember, though, that limits will apply.
- 64.6 percent believe their homeowners or renters policy will cover a diamond engagement ring. While a standard policy may offer some protection for expensive jewelry, coverage is often limited per item. Suppose you have $50,000 in personal property protection. Your policy may limit coverage for jewelry to $1,000 per piece. Be sure to read your policy to understand what it covers. You may find that purchasing specialized coverage (known as scheduled personal property) for certain items may help provide additional protection.
- 27.9 percent think homeowners insurance covers lost or misplaced items, and another 15.8 percent are not sure whether those items are covered by their policies. The truth is, while stolen items may be covered by insurance, standard coverage typically does not extend to belongings that you lose or misplace.
Keep in mind that insurance typically provides coverage up to a certain maximum or limit. Creating a home inventory can give you an idea of the value of your stuff so you can talk to your agent about increasing or decreasing your coverage limits.
From furniture to clothing to computers, the value of your belongings can quickly add up. A local agent can help you understand what your homeowners or renters insurance may help protect so you can decide how much coverage is right for you.
*This survey was conducted by Lab42 among 500 insurance policyholders (auto, homeowners and/or renters), ages 25-44, October 2015. Respondents did not have to be Allstate policyholders to participate. Respondents were allowed to select all that apply. For informational purposes only.