Is My Personal Property Covered By My Homeowners Insurance?

There’s a lot to think about when purchasing homeowners’ insurance. Prices of policies are varied and location dependent. After you’ve worked on your insurance budget, the most important questions about homeowners’ insurance are “What’s covered under this policy?” and “Are personal possessions a part of the coverage?”

A standard homeowner’s insurance policy contains several components that protect specific areas of the home and are standard requirements for the majority of mortgage lenders. These items include the following: 

Structural damage

This coverage includes losses to the interior or exterior of the home resulting from fire or storm damage. Be careful to determine if flood insurance is required for the home.

Outside structure damage

If the home has fencing, sheds, a detached garage, or other buildings on the lot, these buildings are protected if losses are incurred by a covered cause.

Loss of use

A number of homes are deemed uninhabitable after an incident. A loss of use policy can help to reimburse costs for temporary housing, utilities, pet boarding, pet food, laundry, food expenses (loss of food in the home, grocery and restaurant costs), and moving costs to name a few.

Liability

This policy will provide protection, should a guest be injured in the home. It will cover medical costs and help to protect against any lawsuit that may be filed in respect to the covered incident.

Personal property loss 

This covers possessions such as furniture, appliances, jewelry, and clothing. Many insurance companies limit the reimbursement amount, and this is where homeowners need to take extra time in making decisions about coverage. 

If a homeowner possesses expensive items like jewelry, valuable collectibles, high-end technology, pricey art pieces, furs, or instruments, they may exceed the reimbursement limit set by the insurance company. They must consider purchasing an additional rider to protect these specific possessions against theft, or loss in a covered incident, at full replacement cost.

Additional property protection

Homeowners need to consider actual cash value versus replacement cost policies. Actual cash value reimburses the homeowner for the depreciated value of the damaged structure and possessions. Replacement cost reimburses the homeowner at current market value of the home and personal possessions. Replacement cost policies are slightly more expensive but can be the difference between rebuilding and not being able to afford to do so. 

Actual cash value vs. replacement cost also applies to personal belongings under personal property loss and should be added as a rider to any additional insurance coverage for items exceeding the standard policy limits which vary from carrier to carrier. Being under-insured can result in financial catastrophe. It’s important to accurately inventory personal possessions and today’s costs for replacing them before selecting homeowners’ insurance. 

Nsure provides immediate access to the top 50 insurance companies in the United States. Our user-friendly interface allows consumers to compare coverage and premiums in one safe and secure location. Making an informed decision provides your family with peace of mind.