(800) 253-1482What Is Personal Property Coverage in Texas?
Summary: Personal property coverage helps Texans protect their personal belongings. Also known as Coverage C, the protection is available to homeowners and renters. While you can protect your personal belongings, even outside your home, limits apply. However, there are ways to increase these limits or supplement your coverage. Estimated Read Time: 6 mins
Table of Contents:
- What’s Not Covered by Personal Property Coverage?
- How Much Personal Property Coverage Do I Need?
- What Is Coverage C on a Homeowners Policy?
- What Is Scheduled Personal Property Coverage?
- Is Jewelry Covered by Personal Property Coverage?
- Pros and Cons of Personal Property Coverage
- Get a Quote for Personal Property Coverage in Texas
Personal property coverage is a part of home insurance and renters insurance policies protecting your personal belongings. This can range from everyday items such as your furniture, electronics, and clothing to specialty collections, luxury items, and artwork.
Also known as Coverage C or contents coverage, there are limits. Personal property coverage can protect against the perils your homeowners insurance or renters policy covers, even when the items are outside of your home.
Everyone has different items to protect and values that go along with them. Below, we’re looking at how Texans can protect their hard-earned belongings against losses, such as theft, fire damage, and more, for less.
What’s Not Covered by Personal Property Coverage?
Coverage C homeowners insurance covers most possessions, but not everything. There are some things, such as jewelry, designer clothing, etc., that are covered by may face limits without additional coverage. However, there are other items, unless specifically listed in your policy, unlikely to be covered. These include:
- Lost items
- Vehicles, including things like ATVs
- Watercraft
- Plants
- Property used for business, including property rented to others
- Pets and livestock
How Much Personal Property Coverage Do I Need?
For personal property insurance, you need to have enough coverage to restore a major loss to all of your possessions. At the very least, you need to protect enough personal items that you don’t wish to restore out of your own pockets following a major loss, such as a fire.
While some agents use software to calculate replacement costs based on national averages and your home or apartment's rooms, this may not consider high-value items like jewelry or artwork.
Some items have sub-limits, meaning additional coverages should be discussed with your agent. You, as the applicant, must provide item values, possibly requiring appraisals, and ensure proper insurance through scheduling or a personal articles floater.
Your agent will assist in choosing an endorsement and determining the associated premium, noting that the property is insured at "stated value," not replacement cost, with a typically lower deductible than the regular policy deductible.
Let’s explore the different types of reimbursements below as well as floaters that can help you stay better protected:
Replacement Value Vs. Actual Cash Value (ACV)
The decision on whether to base your personal property coverage on replacement cost or actual cash value is always made at the time of application.
The decision on whether to base your personal property coverage on replacement cost or actual cash value is always 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 should be your choice.
If you are not as concerned about your contents, and only expect the cash value for them at the time of a loss (depreciated value), then you should choose actual cash value coverage and save a little money on your insurance premium.
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 should be your choice.
Named-Risk Coverage vs. All-Risk Coverage
Depending on the type of home insurance policy you choose, your personal property will be insured for named perils (named-risk) or all perils (all-risk). A typical homeowners policy is written on a special policy form, called an HO-3 form, which provides contents insurance coverage on a named-risk basis.
This means that 16 perils are covered. Many agents offer an HO-8 form, which is typically designed for newer homes that are protected by alarm systems and located in gated communities. This type of policy insures your contents on an all-risk basis.
This means that your property is covered for every peril unless it is excluded in the policy. The exclusions are usually applied because another type of policy, such as flood or earthquake, provides coverage for the excluded peril.
What Is Coverage C on a Homeowners Policy?
Coverage C is another name for personal property coverage. It’s one of the many coverages that come with a standard home insurance policy (HO-3). For Texas homeowners insurance, the typical limit is 50% of your Coverage A policy limits. However, each homeowner should adjust these limits according to their needs.
What Is Scheduled Personal Property Coverage?
A scheduled property floater provides a specific amount of coverage for specific items. You might list items such as these:
- One man’s watch: Rolex Model XYZ – appraised value $18,000
- One woman’s wedding ring: 2 ct diamond in 18 ct gold band – appraised value $6,000
- One antique 16-gauge shotgun: Remington – appraised value $8,000
With a scheduled property floater, the policyholder insures by item rather than by category and the insurance company agrees to accept limits based on the appraisals. Although a higher premium is charged, a scheduled property floater will pay the limits on a per-item basis rather than a per-category basis.
Unscheduled Property Floater
An unscheduled property floater is a way to provide additional insurance on categories of personal contents on a broad basis.
Instead of separately listing each firearm in a collection and the amount of insurance required, the policy provides coverage for the firearm category and assigns a limit the company is willing to accept. The additional premium for this type of floater is typically much lower than a scheduled property floater.
Is Jewelry Covered by Personal Property Coverage?
Yes, jewelry is covered, but be aware of your personal property coverage limit. For example, if you have jewelry that is worth $100,000 but your home insurance policy only has $80,000 worth of coverage, you could have to pay out of pocket to restore the loss.
But remember, scheduled personal property coverage is available to supplement your coverage. You can also raise your home insurance policy limits or enroll in a HO-5 policy but expect higher premiums. Furthermore, jewelry-specific policies may also be available.
Pros and Cons of Personal Property Coverage
Having personal property coverage is important for all homeowners and it’s made easy because it comes with standard home insurance policies. However, there are still pros and cons when enrolling. Here’s what you need to remember about Coverage C:
|
Pros: |
Cons: |
|
Reimburses you for personal items lost |
Doesn’t cover everything due to sub-limits |
|
Covers a wide range of perils even outside of your home |
To receive reimbursement, you’re going to need to have documentation of your items |
|
An affordable option already within standard home insurance policies |
Additional coverage and riders mean higher premiums |
Get a Quote for Personal Property Coverage in Texas
Protecting your belongings doesn’t have to be a hassle. At Freedom Insurance Group, we work with 25+ top-rated home insurance companies to help you find the right coverage at the lowest price. Get a home insurance quote or ask an agent today for personal property coverage Texans can trust.
