What is Contents Insurance?
Contents insurance, also known as personal property insurance, is a type of home insurance that covers the loss or damage of personal belongings within your home. This type of insurance provides financial protection against theft, damage, or destruction of your personal property.
What Does Contents Insurance Cover?
A large variety of personal items are covered under contents insurance, including:
- Furniture
- Clothing
- Electronics, including TVs and computers
- Decor
- Books
- Sports equipment, including bikes
- Dishes
- Jewelry (up to a certain value)
- Art
- Non-built-in appliances (e.g., toasters, mixers, blenders)
- Firearms
What is Not Typically Covered?
Contents insurance does not typically cover:
- The full value of expensive items
- Vehicles and aircrafts
- Installed features like flooring, furnaces, cabinets, etc. (Dwelling insurance will intervene here if you own a home.)
- Animals, including birds and fish
- Things that are insured on a different policy (jewelry, for example)
- Belongings owned by any tenant or boarder
- Items that you lost or misplaced
How Much Contents Insurance Do I Need?
The amount of contents insurance you need depends on the value of the personal property that you’re trying to protect. By making a list of everything you own and calculating the cost of replacing it all, you may determine the approximate value of your possessions.
Actual Cash Value vs. Replacement Cost Value
The majority of insurance providers provide you the option to insure your belongings for replacement cost value (RCV) or actual cash value (ACV) when it comes to home contents insurance. RCV coverage will reimburse the cost of replacing a destroyed item with a comparable item at current prices if the peril is covered. However, ACV coverage reimburses you for the item’s depreciated worth.
Contents Insurance Coverage Limits
According to the Insurance Information Institute (Triple-I), 50–70% of the dwelling coverage amount specified on your policy is covered by contents insurance in the majority of homeowners insurance plans. You usually get to set your own contents insurance limit, whether you rent or own a condo, as you might not need as much or any dwelling coverage. However, your carrier may suggest a minimum or maximum amount.
Does Home Contents Insurance Depend on Where Things Are Stored?
Property outside of your house or apartment is also covered by your contents insurance, sometimes referred to as personal property coverage, whether you have renters’ or homeowners’ insurance. In general, contents insurance protects you in the event that any of the following occur to your possessions:
- Your automobile (car insurance protects the physical vehicle, whilst contents insurance covers the possessions within the vehicle.)
- A storage unit
- A hotel room or other location when traveling
Contents coverage generally has lower coverage limits for your items when they’re not in your home. For example, if you keep your items in a storage unit, your your coverage limits could be as little as 10% of your overall contents insurance amount. Speak with your agent about raising the coverage limits if necessary.
How Much Does Contents Insurance Cost?
The average price of a Lemonade Renters insurance policy in the US, as of early 2024, is around $14/month. Your policy premium depends on things like the deductible and coverage limits you choose, as well as any valuables you’ve added to your policy (aka “scheduled”).
