How to Protect Your Property With Contents Insurance

Because some items aren't fully covered by standard policies.

Contents Insurance

When you have valuable items or property, you need to make sure they're protected against all kinds of hazards. Unfortunately, many folks mistakenly believe their homeowners, renters, or business policy provides coverage for all their property, regardless of type. However, this isn't true, which is why it's so important to be informed about which property requires additional coverage before disaster strikes.

Many policies don’t offer enough personal or business property coverage, also called contents insurance. But luckily an independent insurance agent  can help you find the right type of contents insurance to help protect all your belongings or business property, regardless of how valuable or breakable it is. First, here's a closer look at contents insurance and why it's important.

What Types of Personal or Business Property Need Extra Contents Insurance?

Contents insurance is a section of homeowners, renters, and business insurance policies, but for certain types of property, it's not enough. You might need additional contents insurance for the following types of personal or business property:

  • Artwork
  • Jewelry
  • Antiques
  • Rugs
  • Gold/silver/bouillon
  • Stamps and other valuable collections
  • Firearms
  • Drones
  • Fine china

Basically, special property in need of additional contents insurance often comes in one of three forms:

  • Old/antique
  • Highly valuable
  • Extremely fragile

Items are considered valuable based on their actual cash value or replacement value (more on this next), not on which items are important to you and your family. Your independent insurance agent can help advise as to which pieces of property in your home or business require additional coverage.

Why Do Certain Types of Property Need Additional Coverage?

Certain types of business or personal property need additional contents coverage because they'd be much more expensive for your insurance company to repair or replace. Some types of property are insured by standard policies against certain perils, but not all. Especially fragile property like fine china, for example, would often be insured against disasters like fire and wind, but not against breakage, since the item is so susceptible to it. 

Special property for your home or business needs to be fully protected not just value wise, but against anything that could potentially happen to it. That's what makes additional contents coverage so important. An independent insurance agent can help you get all your special property covered against most major disasters, for its actual cash value or replacement value.

The Basics of Contents Coverage

The contents insurance section of homeowners and renters policies has two very distinct coverage gaps that are important to understand. To ensure your property is covered sufficiently, become familiar with these aspects of your policy.

  • Valuation: Your insurance policy has a valuation clause regarding how it determines the value of your personal property at the time of a loss. The first type, actual cash value, is calculated by taking the purchase price of an item, minus depreciation. The second type, replacement cost, determines the price of the item if it were bought new today. 
  • Sublimits: Homeowners insurance companies have determined some categories of personal property are much riskier to insure than others, and have established sublimits for these. Basically, it's a fraction of the limit that would normally apply to a loss in the property category. So certain, more valuable or fragile items may be covered to a lesser extent than others.

Most homeowners and renters policies allow policyholders to increase the limits on some or all of these categories with endorsements and additional premiums. Policyholders can also "schedule" valuable items by having them appraised and listed separately. An independent insurance agent can provide you with further details.


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Best Companies for Contents Insurance

Contents insurance is available from many different insurance companies, and the best way to find the right carrier for you is through working with an independent insurance agent. They know which carriers to recommend to meet your needs, and can provide informed suggestions based on company reliability, rates, and more.

While many insurance companies could provide contents insurance for you, finding coverage could also depend on the area you live in. Here are a few of our top picks for contents insurance.

Top Contents Insurance Companies Star Rating
Liberty Mutual
4.5/5 star rating
5 star rating
5 star rating

One contents insurance company outshines its competitors.

  • Best overall contents insurance company: Travelers

Travelers is a 5-star insurance company that provides quality coverage. According to their official website, their contents coverage under homeowners insurance protects your personal property, such as:

  • Furniture
  • Clothes
  • Sporting goods
  • Electronics

Travelers' contents insurance protects your property from numerous kinds of loss. Travelers also sells business insurance and renters insurance, which each also offer contents coverage.

Deciding Between Actual Cash Value and Replacement Value

The decision on whether to base your personal property coverage on replacement cost or actual cash value is  made at the time of application. If you prefer to have claims resolved in a way that allows you to replace your contents on a new-for-old basis, then replacement cost would be right for you. 

If you're not as concerned about your contents, and only expect the cash value for them at the time of a loss (factoring in the depreciated value), then selecting actual cash value coverage could save you some money on your insurance premium. An independent insurance agent can also help you make an informed decision.

Should Renters Also Get Contents Coverage?

Your landlord’s insurance will not cover your belongings if the structure you’re renting burns to the ground. Also, if your unit is burglarized and your personal property gets stolen, your landlord’s contents insurance will not cover that, either.

A landlord’s insurance will only cover losses related to the structure. If you haven’t purchased contents insurance for the apartment, condo, or home you rent, you'd have to pay out of pocket to replace your property after a disaster. 

The only section of your renters insurance that applies to your personal belongings is loss of use coverage, which would reimburse for a temporary storage unit for your stuff if the building was undergoing repairs. An independent insurance agent can help you get set up with all the protection you need for your belongings.

How Much Contents Insurance Do I Need?

When it comes to contents insurance, you decide the amount of coverage you need under your homeowners, business, or renters insurance. Your responsibility as the applicant is to provide your agent with the value of any special items you own (appraisals may be required). Afterwards, you'll either schedule the property on your underlying policy or purchase additional coverage. 

The following additional coverages can be used to fully protect special property:

  • Inland marine insurance: This coverage is commonly added to homeowners, renters, and business insurance policies to cover special contents, or to increase existing personal or business property coverage in the policy. These policies can be used to cover property from additional perils excluded by the underlying policy as well.
  • Unscheduled property floater: Unscheduled property floater provides additional insurance on categories of personal contents on a broad basis. Instead of separately listing each item in a collection, these floaters cover the whole category with a set limit.
  • Scheduled property floater: Scheduled property floaters provide a specific amount of coverage for listed items. For example, an antique chair might be listed with an appraised value of $2,000, or a drone might be listed at $10,000. Scheduled property floaters often have higher premiums than the other additional property coverage options.

If you're unsure of which type of contents insurance is best for you, be sure to speak with your independent insurance agent. They'll help you determine what property you own needs additional coverage and much more.

What's Not Covered by Contents Insurance?

Whether you get additional contents insurance through an inland marine policy or floater, it's still going to exclude a small list of disasters. It's important to be familiar with these, just in case.

Contents insurance won't cover the following:

  • Nuclear reaction
  • War damage
  • Intentional injury by the insured
  • Dishonest acts by the insured

If you have any further questions about what's not covered by contents insurance, an independent insurance agent can help clear up any remaining confusion.


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The Benefits of an Independent Insurance Agent

When it comes to helping insurance customers find the absolute best contents coverage, no one’s better equipped to help than an independent insurance agent. Independent insurance agents search through multiple carriers to find providers who sell contents insurance, deliver quotes from a number of different sources and help you walk through them all to find the best blend of coverage and cost.

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