What is personal property coverage in home insurance?

Coverage C: your belongings

A standard homeowner's policy is divided into coverage sections labeled A through F. Coverage C is personal property, the protection that applies to your belongings inside and, in most cases, outside the home. It pays when your stuff is stolen, destroyed by fire, damaged in a windstorm, or affected by other covered perils.

Personal property coverage applies not just inside your home but often anywhere in the world. If your laptop is stolen from your car, your luggage disappears at the airport, or items in a storage unit are damaged, Coverage C may respond, subject to your policy's terms and any applicable sublimits.

Replacement cost vs. actual cash value

The most important decision under Coverage C is whether you choose replacement cost value (RCV) or actual cash value (ACV).

• ‣Replacement cost: Pays what it costs to buy a new equivalent item at today's prices. If your 5-year-old TV is destroyed, you get enough to buy a comparable new TV.
• ‣Actual cash value: Pays the depreciated value, what the item was worth at the time of the loss. That same 5-year-old TV might pay out a fraction of what a new one costs.

Replacement cost coverage costs more in premium but pays significantly more at claim time. For most people, the upgrade is worth it.

Sublimits: where standard coverage runs short

Standard policies cap coverage for certain high-value categories at sublimits well below the overall Coverage C limit. Common sublimits include:

• ‣Jewelry and watches: often $1,500 to $2,500
• ‣Firearms: often $2,500
• ‣Silverware and goldware: often $2,500
• ‣Fine art and collectibles: varies widely
• ‣Business property on premises: often $2,500

If you own items that exceed these sublimits, a scheduled personal property endorsement, sometimes called a floater, provides agreed-value coverage for specific items with no depreciation and often no deductible.

Cooper's take

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