Personal Property Coverage Basics

Personal property coverage is the part of your policy that pays for your belongings after a covered loss. Most homeowners misunderstand how this works—especially how insurers value items and which categories have strict payout limits. This is one of the easiest places to get underpaid.

If you haven’t documented your belongings yet, pair this guide with documenting your home so you have proof ready when a loss hits.

1. What Personal Property Coverage Actually Protects

Everything you’d take with you if you moved is personal property. Furniture, electronics, clothes, tools, appliances, and valuables—all of it falls under this coverage, but only if it was damaged by a covered cause of loss.

• Electronics, TVs, laptops, entertainment systems
• Clothing and shoes (grouped by type during claims)
• Tools and equipment
• Appliances you own (not built-in)
• Furniture and decor

Theft claims in particular get scrutinized hard. If you can’t show evidence you owned something, expect pushback.

2. Replacement Cost vs. Actual Cash Value

This is the difference between getting paid enough to replace an item and getting paid the “garage sale value” of it. Many homeowners don’t realize their personal property is still ACV even when the dwelling is RCV.

• Replacement Cost (RCV): pays current cost to buy the same or similar item.
• Actual Cash Value (ACV): depreciated value—often pennies on the dollar.

If you want a full comparison between the two, review the guide on ACV vs replacement cost. It’s the difference between rebuilding your life or replacing everything with bargain-bin substitutes.

3. Sublimits: The Hidden Caps That Hurt Claims

Certain categories have tiny payout caps unless you add scheduled coverage. These sublimits are where most homeowners get blindsided during theft or fire claims.

• Jewelry
• Firearms
• Collectibles and memorabilia
• Cash and precious metals
• High-end electronics

If you own anything in these categories, cross-check with the guide on policy limits before assuming you're fully covered.

4. Off-Premises Coverage

Your belongings are covered even when they’re not in your home—but the limits are lower. If your laptop is stolen from your car or your luggage gets destroyed at a hotel, personal property coverage still applies, just with restrictions.

• Commonly capped at 10% of your personal property limit.
• Theft from cars requires documentation.
• Travel losses require proof of ownership and value.

This is why your inventory and documentation matter as much as the coverage itself.

5. Matching and Like-Kind Replacements

Insurers only owe you a replacement of similar type and function, not necessarily the same brand or model. If you want fuller protection for high-end items, you must schedule them separately.

6. Keeping Your Personal Property Coverage Updated

Review your limits once a year or after major purchases. Most people add expensive items—tools, instruments, electronics—but never increase coverage. When a loss hits, their payout stops short.

• After big purchases, add them to your inventory.
• Raise limits if your belongings outgrow the default setting.
• Update documentation annually.

Personal property is the easiest coverage to get right and the easiest to screw up. A few updates now save you from a painful undervaluation later.