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Personal property coverage — Coverage C on your policy — pays to repair or replace your belongings when they are damaged or stolen by a covered peril. It is one of the most-used parts of a homeowners policy and one of the most misunderstood. Here is what it actually covers, what it does not, and where the limits kick in.
What counts as personal property
Personal property is everything you own that is not part of the structure: furniture, electronics, clothing, appliances, kitchenware, sports equipment, books. If you turned your house upside down, roughly speaking, everything that falls out is personal property. Standard policies set the limit at 50 to 70 percent of your dwelling coverage — so a $300,000 dwelling limit typically comes with $150,000 to $210,000 in personal property coverage.
What is covered
Personal property is covered against the same named perils as the rest of the policy: fire, lightning, windstorm, hail, theft, vandalism, falling objects, the weight of ice and snow, and sudden water damage from burst pipes, among others. Coverage applies anywhere in the world — your laptop stolen from a hotel room or your bike taken from a trailhead parking lot is covered, usually at a reduced limit (often 10 percent of the personal property limit) for property away from home.
What is not covered
- Flood and earthquake. Like the rest of the policy, personal property coverage excludes these unless you buy separate policies. See our guide on flood coverage for how that works.
- Wear and tear. A TV that dies of old age is not a claim. Coverage is for sudden, accidental damage from a covered peril.
- Neglect and gradual damage. Mold from a leak you ignored for months, or belongings ruined by long-term dampness, are typically excluded.
- Certain high-value categories have sub-limits. This is the big one people miss — see below.
- Business property. Equipment you use for work is covered only up to a small limit (often $2,500) unless you add coverage.
- Motor vehicles. Cars are excluded — that is what auto insurance is for.
Sub-limits: the limits inside the limit
Your $150,000 personal property limit does not apply evenly. Standard policies cap specific categories: jewelry and watches often at $1,500 total for theft, firearms around $2,500, silverware around $2,500, cash at $200, and business property at $2,500. If you own an engagement ring worth $8,000, the standard policy pays $1,500 for its theft — the rest is on you unless you scheduled it separately.
Actual cash value vs replacement cost
Personal property claims are paid at actual cash value by default in many policies — the replacement price minus depreciation. A five-year-old couch might be valued at a fraction of what a new one costs. Replacement cost coverage pays what it actually costs to buy a comparable new item, with no depreciation deduction. The upgrade usually costs a modest amount extra and is worth it for most households, since nearly everything you own depreciates fast.
Why a home inventory matters
After a fire or burglary, the insurer asks you to list everything that was damaged or stolen, with approximate values and ages. Most people cannot reconstruct their belongings from memory under stress. A simple inventory — photos of each room, plus a spreadsheet or an inventory app noting big-ticket items and their purchase prices — turns a painful process into a manageable one. Update it once a year and store it somewhere other than your house (cloud storage works).
When to add scheduled personal property
If you own jewelry, art, collectibles, or instruments worth more than the sub-limits, a scheduled personal property endorsement lists each item individually with an appraised value. Scheduled items are covered for more perils (including accidental loss, like losing a ring) and usually have no deductible. It costs a small annual amount per item and is the standard way to properly insure valuables.
Personal property is also one of the coverages worth comparing when you compare homeowners quotes — insurers differ on default limits, sub-limits, and the cost of replacement cost upgrades. And if you rent rather than own, the same concepts apply under renters insurance, where personal property is the main coverage.
