Personal Property Insurance

You’ve worked hard for your home and all the things inside that make it uniquely yours. Now, consider how much it would cost to replace or repair the belongings you love, not to mention the things you need, if they were to be damaged, destroyed or stolen. That’s why personal property insurance is so important — it’s a part of your homeowners insurance policy that protects your things from the unexpected.

With personal property insurance from American Family Insurance, you’ll appreciate the security of knowing your agent is by your side to make sure your coverage needs are met and your questions are answered. In the meantime, we’ve highlighted key details you need to know about personal property insurance, including what this coverage can do for you and why it’s so important to have.

What Is Personal Property Insurance?*

Protecting your property is what your homeowners insurance is for. Personal property includes the belongings in your home — like your furniture, clothing, electronics and jewelry — and having coverage that protects the value of your belongings ensures you’ll have the means to help repair or replace your possessions should they be damaged in a covered loss.

Your coverage protects your personal property from the following common hazards:

• Falling objects
• Fire
• Lightning
• Smoke
• Theft
• Vandalism
• Discharge or overflow of water or steam**
• Weight of ice, snow or sleet
• Windstorm
• Wildfire

Personal Property and Named Perils

Coverage for your personal property is provided on a named peril basis. You may be asking yourself what “named peril” means. Basically, it means that your personal property is only covered if the loss occurs as a result of a hazard that’s listed on your policy. This is where having an agent can help, since they’ll explain what is and what isn’t covered within your policy.

For example, if you simply lose your wedding ring, it won’t be covered by your policy because that specific type of loss isn’t listed on it. However, if someone broke in to your home and stole your wedding ring, it would be covered (up to your policy limit) because theft is a type of loss (i.e. a peril) that’s named on your policy. If you wanted to make sure you were covered for any kind of loss of your wedding ring, you’d want to consider scheduling it under itemized personal property coverage.

It’s important to note that your American Family homeowners policy doesn’t provide coverage for damage due to flooding or rising water. Flood insurance is available through the National Flood Insurance Program (NFIP).

Personal Property and Open Perils

For some types of personal property coverage, you may be able to get an open peril policy. “Open peril” means that there are no named perils on your policy that restrict the type of damage or loss covered by your personal property coverage. Unless the type of damage or loss is specifically excluded from an open policy, any kind of loss or damage is covered.

You can choose to add an open perils policy in the form of itemized or scheduled personal property coverage to your homeowners insurance to more extensively protect the value of your personal belongings.

How Much Personal Property Coverage Do I Need?

A homeowners policy with American Family helps provide a basic level of protection for the personal property in your home. The amount of personal property coverage you should have can vary depending on a number of things. We’ll walk you through what you need to know to better understand your specific coverage needs. As always, working with your agent also helps ensure you’ll get the coverage that’s just right for you.

Create a Home Inventory of Your Personal Property

Your items add up quickly and you probably have more than you think! Creating a home inventory is an important step in making sure you get the right amount and type of personal property coverage. Quite simply, a home inventory is a complete listing of items, especially valuable ones, in your home. In addition to helping you determine how much coverage to buy, it’ll be an invaluable aid in the event your home is damaged or destroyed. Get started by creating your own home inventory. Apart from a list of your items, having a video recording or pictures of each room in your home is great documentation if you ever have to file a claim.

Below, we’ve highlighted specific items and their coverage limits so you can determine if you’ll need higher levels of coverage. Of course, these aren’t the only items that are protected by your policy, but they’re meant to give you an idea of what types of items might need special attention. You’re covered up to your personal property (Coverage C) limit for the items below, however, specific types of personal property have sublimits that we point out in the following tables. Remember, your home inventory will help you calculate the most accurate amount of coverage needed.

• Antiques
• Art
• Clothing
• Collectibles
• Computers
• Electronics
• Furniture
• Game systems
• Musical equipment
• Sound systems
• Sport equipment

Make sure you're properly covered — print this list to start building your home inventory.

What Is Itemized Personal Property?

As you go through your things, you may note that certain items are more valuable than others. And some of those items might have a set limit of coverage in your standard homeowners policy. For example, in the above table, we pointed out that your jewelry, gemstones, watches and fur have a coverage limit of $2,000 — meaning, in the event of a covered loss, we’ll only cover up to $2,000. But what if the jewelry and those other valuables you own are worth more than $2,000? That’s where itemized personal property comes into play.

Itemized personal property is an optional add-on to your policy that provides an increased level of coverage for more valuable items, like your jewelry, and also provides coverage for a greater number of risks. Remember the example above where you lost your wedding ring and you weren’t covered? With itemized personal property, you’re covered for this loss. In a nutshell, itemized coverage extends your coverage to provide protection for unexpected events beyond what’s listed in your base policy. It also allows you to insure your belongings to their appropriate current value.

Commonly itemized items include jewelry, musical instruments, art, antiques, a stamp or coin collection, firearms, bicycles, cameras, golf equipment and other types of valuables in your home. In order to get certain items covered, you may need to provide a recent receipt or professional appraisal.

Connect with your agent to itemize your personal property — they’ll be able to answer any questions and make sure you’re getting adequate coverage for your higher-end items.

Want to make sure your valuables, like your wedding ring, are fully covered? There are a number of optional coverages that offer more protection.

Personal Property Replacement Cost Coverage

If your personal property needs to be repaired or replaced due to a covered loss, they’ll be covered for their replacement cost value (RCV) rather than their actual cash value (ACV). This means we’ll repair or replace your property with new property of the same type, kind and quality. Whereas actual cash value pays for your items based on their current, depreciated value, taking into account factors such as age and condition.

Jewelry, Gemstones, Watches and Furs Coverage

This coverage provides open peril coverage for these items with two options available:

• $2,000 (per item)/$2,500 (total).
• $2,000 (per item)/$5,000 (total).

Standard policy deductible applies (minimum of $1,000).

Personal Property Increased Special Limits Coverage

This type of additional coverage increases your coverage limits on certain personal property categories, helping you better protect the full value of your personal belongings.

Replacing Your Personal Property: RCV vs. ACV

To understand your homeowners insurance, you’ll need to know the difference between replacement cost value and actual cash value. Both will help pay to repair or replace your belongings in the event of a covered loss, but how they cover you differs:

Actual Cash Value (ACV)

ACV pays you what your property is worth today. This means ACV takes into account the item’s age, condition and potential obsolescence (which is the loss of usefulness as a result of becoming obsolete or outdated). So if you bought a couch five years ago for $2,000 but that couch is now only worth $800, you’ll be compensated the amount that it’s worth today ($800).

Replacement Cost Value (RCV)

RCV covers you for the cost to replace your damaged property with new property of the same type, kind and quality. If you bought a couch five years ago for $2,000, but today it would cost $2,500 to buy a similar couch, you’d be covered for $2,500 (after your deductible is satisfied, of course). Similarly, if you bought a couch five years go for $2,000 but that same couch could be bought for $1,000 today, you’d be covered for that amount.

While ACV coverage typically means you pay a lower premium than if you have RCV coverage, having RCV coverage is a savvy choice because it’ll compensate you for the cost of replacing your damaged property. If you have ACV, you’ll have to pay out of pocket to fill in any gap that’s not covered if you choose to replace an item.

Simply put, you work hard for the things you own — if you want to replace the belongings you had before the loss, ACV offers less protection than RCV, making RCV a more popular choice among homeowners.

Here’s a closer look at RCV vs. ACV insurance coverage.

Personal Property Protection on the Go

One feature included with your homeowners insurance is that it protects your belongings when you’re on the go — no matter where in the world you find yourself. Whether your computer gets stolen while you’re working at a coffee shop or your camera is swiped from your hotel room, you’ll have peace of mind that no matter where you are, we’re looking out for you. Remember, coverage limits on your policy will apply to losses while on vacation, so it’s a good idea to connect with your agent before you travel to make sure you have the right amount of coverage for your personal belongings.

Personal Property Protection for Your Pets

Not only does personal property coverage protect all your favorite belongings — it can also protect your favorite family pet(s), like dogs, cats, birds and fish. When you add pet coverage, you can get $1,000 for veterinarian or funeral expenses for your pet as a result of a covered loss. Or consider pet insurance to protect your pet's health regardless of the cause.

Understand Your Deductible

If you file a homeowners insurance claim after a loss, you’ll be responsible for paying a deductible. A deductible is the amount of money you’ll pay out of pocket before we kick in to cover the rest. At American Family, you can set your homeowners deductible anywhere from $1,000-$10,000. It’s important to keep in mind that the higher you set your deductible, the lower the cost your premium will be, and the lower your deductible, the higher your premium will be.

Are you ready to protect the space you call home? Connect with your American Family Insurance agent to learn more about how your homeowners insurance protects your personal property. And get in the know by taking a look at our home insurance checklist for a step by step guide on how to navigate the home insurance process.