How Much Contents Insurance Do I Need?

(It's time to figure out how much personal property you have)

How much contents coverage do I need

Whether you live in a house, a condo, or a rental, your possessions are important to your life and family. What would happen if your stereo was stolen, your pipes burst, a fire ravaged your home, or your stuff was damaged on its way to your new home? When it comes to insuring your belongings, we're talking about contents coverage. Contents coverage, also known as personal property coverage, is the part of your homeowners insurance policy that helps pay to replace or repair your personal belongings if they're stolen or damaged by a covered peril.

Independent insurance agents can help you find the right policy for contents insurance. By helping you assess the value of your belongings and your needs, an independent insurance agent can help modify your current coverage or suggest new policies that will protect your valuables. But first, here's a bit more background to consider about your belongings.

What Types of Personal Property are Covered Under Contents Insurance?

Under the majority of residential insurance policies, most of your possessions are insured up to certain policy limits. These possessions can include:

  • Appliances
  • Bedding
  • Computers and electronics
  • Clothes
  • Furniture
  • Jewelry
  • Kitchenware

To accurately determine how much contents coverage you need, you’ll need an accurate and up-to-date list of all the items that you have to create an inventory of your belongings. This includes making a comprehensive list along with:

  • Photographs of your belongings 
  • Product-specific details, like serial numbers
  • Makes and model numbers
  • Year of purchase
  • Any official documentation such as receipts and appraisals

By thoroughly documenting the stuff you own, you can gain a clearer picture of what you own and how much it's worth. Once you’ve tabulated how much you own and what it would cost to replace it, then you can get a good estimate of how much contents insurance you need. Ultimately, you’ll have an accurate number to replace your belongings and you’ll be equipped with valuable documentation when it comes time to file an insurance claim

Essentially, you should know how much insurance you would need to replace all of your belongings by the value. This, unfortunately, can be time-consuming and stressful. However, independent insurance agents can work with you to calculate how much contents insurance coverage you need. 

For some individuals, independent insurance agents can visit a person’s residence and help determine an accurate estimate for your home’s contents. 

Which Type of Contents Coverage Should I Choose?

Most insurers will allow policyholders to choose between two types of contents coverage: actual cash value and replacement cost.

Replacement cost coverage 

  • Reimburses the policyholder for the cost of replacing a damaged item with one of similar type and quality.

Actual cash value coverage

  • Pays the cash value of the contents insured by the policyholder, but factors in depreciation of the item.

As an example of how these types of coverages work, suppose that you file an insurance claim after a five-year-old laptop is stolen. Here’s how it works for each coverage:

  • An insurance policy with a replacement cost coverage would typically provide enough coverage to purchase a replacement of the same quality laptop at today’s market value.
  • An insurance policy with an actual cash value coverage would only reimburse you for a percentage of what you originally paid for it, which may mean that you’d have to pay more to get a comparable laptop.

Bear in mind that if you choose replacement cost coverage, your homeowners policy premiums may increase. An independent insurance agent can work with you to choose replacement cost or actual cash value reimbursement for your contents, helping you make the right decision within your budget and financial needs.

What Types of "Extra Coverage" Can I Add to My Content Policy?

Be aware that there are some coverage limitations when it comes to contents insurance. Valuable belongings are usually subject to limits based on standard policies. This may mean, for example, that a $3,000 ring may only be reimbursed for $1,500 if it is stolen. Even if your personal property coverage is higher than the value of the item, high dollar items tend to require scheduled personal property coverage.

Often referred to as rider, floater, or endorsement, scheduled personal property is an optional coverage you can purchase to provide additional protection for certain valuables. To schedule an item, you'll typically need to have the item appraised by a professional. This adds to the cost and may arrive at a lower price for an item than you had in mind. However, the flip side to this is that some insurers provided coverage for a greater number of risks and no deductible payment if you need to file a claim with scheduled personal property coverage..

An independent agent can help you review your existing insurance coverage and answer any questions you may have about protecting your belongings. For example, independent insurance agents can make sure that your contents coverage is as close to the true cost to replace your belongings as possible. This means that you aren’t paying too much for insurance while remaining fully insured.


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How Much Does Contents Coverage Cost?

In truth, contents coverage is difficult to put an average to. This is because every home has different possessions and values, particularly for items that may appreciate or depreciate over time.

Nevertheless, you will have coverage limits and a deductible to contend with when determining the cost of contents coverage: 

  • The limit is the maximum amount that your homeowners policy will pay towards a covered claim. The greater the limits, the higher the premiums.
  • The deductible is the amount that you will pay out of pocket before the insurance company will help pay toward a covered claim. Generally speaking, the higher the deductible, the lower the cost of premiums. 

As an example, if you have an antique cuckoo clock that is valued at $10,000 and is damaged, you may have to pay a $250 deductible to receive $5,000 in coverage. And for those who pay a $500 deductible, they may have $10,000 in contents coverage to replace the clock. 

Will This Policy Cover My Personal Items Being Stored Somewhere Else?

If you’re like many homeowners, you probably have possessions that are stored elsewhere. If your belongings are in a storage unit or at another location, contents coverage may protect your items against certain perils, such as theft or fire damage.

However, don’t expect that your homeowners insurance policy will provide the same protection for damaged or stolen goods that are stored off premises. If, for example, your homeowners insurance policy has a $50,000 personal property coverage limit, your belongings that are kept off-site may be capped with only $5000 worth of coverage.

It’s for this reason that you should check with an independent insurance agent to understand how much coverage your belongings are insured for. Independent insurance agents can help you cover these belongings capped off-site with special policy riders and or more comprehensive policies for your needs.

Will My Personal Property Also Be Covered While Movers Are Handling the Property?

Most contents insurance offers protection while your personal belongings are in your home or in transit to a new home. However, damage caused your belongings by movers is typically not covered by most standard homeowners insurance policies.

If you’re looking for protection while you’re possessions are being handled by movers, you’ll want to speak with an independent insurance agent to see if there are any available policy riders you can pay for or whether the mover themselves has their own type of insurance coverage. Independent insurance agents can help ease an already stressful situation during moving and provide peace of mind with adequate coverage.

Benefits of an Independent Insurance Agent

Independent insurance agents have access to multiple insurance companies, ultimately finding you the best coverage, accessibility, and competitive pricing while working for you. Find an independent insurance agent in your community here.

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