Homeowners insurance protects your dwelling and your belongings, and offers liability coverage for injuries that happen on your property.
There are three components to homeowners insurance: dwelling coverage, personal property coverage, and personal liability coverage. Your possessions are covered under personal property coverage.
What is personal property insurance
Homeowners insurance protects your belongings and furnishings from damage due to covered events, known as insurance perils. A peril is an event that may damage your home or belongings. Common insurance perils include: theft, fire, lightning, hail, and vandalism.
There are limits to standard personal property coverage depending on your policy and insurance carrier, usually $100,000.
Damage to your personal property caused by earthquakes, floods, government seizures, mudslides, ordinance updates, sewer backups and sinkholes are perils that will not be covered by homeowners insurance. Those will require add-on or separate coverage.
| Coverage | Included with Homeowners Insurance |
| Dwelling/Structure | Yes |
| Personal liability | Yes |
| Personal belongings | Yes |
| Loss of Use (additional living expenses) | Yes |
| High-end electronics/special jewelry | Limited, requires add-on* |
| Equipment breakdown | Yes* |
| Electrical outage | Yes* |
| Service lines | Yes* |
| Cyber liability | Yes* |
| Water damage | Yes |
| Flood | No** |
| Wind or hail | Yes, but not high winds*** |
| Earthquakes | No* |
| Pets | Yes* |
*Available as add-on coverage if not part of policy
**Flood insurance is available through the NFIP and approved insurers
***If you live in hurricane or tornado areas, additional windstorm rider may be required
Specialty items may not be included or require an add-on rider
Specialty items like high-end electronics, special jewelry, furs, fine arts, firearms, and cash may not be covered. According to Steve Wilson, senior underwriting manager at Hippo Insurance, these items may need a “personal article” endorsement or add-on rider.
With personal jewelry insurance, you can ask your homeowners insurance to increase your limits, but “the amounts are still limited for both individual pieces and overall losses,” according to the Insurance Information Institute.
A second option is purchasing a floater policy as an add-on to your homeowners insurance. The Insurance Information Institute notes that although this is more expensive, it offers the broadest coverage, including coverage your standard homeowner’s policy doesn’t include. Your jewelry and fine art must be appraised before purchasing a floater.
Another option is to purchase personal jewelry insurance. Bryan Howard, director of product management for Jewelers Mutual, told Insider that unlike a homeowners policy, “a standalone jewelry policy is a comprehensive, all perils policy, meaning it covers every type of loss unless specifically excluded.”
| Jewelry Coverage | Homeowners insurance | Floater or add-on rider | Stand alone like Jewelers Mutual |
| Loss | No | Yes – appraised value | Yes – appraised value |
| Theft | Yes* | Yes – appraised value | Yes – appraised value |
| Damage | ** | ** | Yes – appraised value |
| Mysterious disappearance (unexplained loss) | No | Yes – appraised value | Yes – appraised value |
| Claims process | May require you to use jeweler of insurance choice. May require multiple estimates | May require you to use jeweler of insurance choice. May require multiple estimates | Repair or replacement with same kind and quality (up to the value on your policy) from the jeweler of your choice; no need for multiple estimates |
| Effect of claim | Claims may affect status of entire policy, including coverage for your home | Claims may affect status of entire policy, including coverage for your home | No increase to your Jewelers Mutual policy premium |
| Deductible | Same as overall policy | Flexible | Flexible |
*Subject to liability limits
**Depends on policy
Data from Jewelers Mutual
Actual cash value vs. replacement cost
Homeowners insurance policies typically use “replacement cost” when paying out for covered damage. Replacement cost is the cost to replace the item with a new or used product.
Actual cash value (ACV) takes into consideration depreciation of the item. For example, if a five-year-old leather sofa is damaged by fire, the actual cash value considers the age of the sofa. Actual cash value is usually lower than the replacement cost value.
Flood insurance policies typically use actual cash value, but you can pay extra to use replacement cost. Check with your homeowners insurance to see which is used. Some providers offer “guaranteed replacement cost” as a perk.
For specialty jewelry and fine art, you will be covered for the appraised value minus any deductible.
It’s a good idea to take inventory of your furniture and personal possessions. Some homeowners insurance companies will have inventory lists for you to complete. If you have riders for fine art and specialty jewelry, you will be required to catalog and provide appraisals for them.
How to file a claim if your belongings are damaged or stolen
Treat stolen or damaged possessions like a car accident and follow these steps to report and file a claim.
1. Notify the police and file a police report if it is due to theft. Your insurance company may request a copy of the police report.
2. Take pictures of damaged possessions and what caused the damage (fire, storm, etc).
3. Contact your homeowners insurance company. Failure to timely notify your insurance provider can result in denying the claim.
4. If damage is due to earthquake, flood, or mudslide, contact that insurance provider.
Ronda is an attorney, writer, and entrepreneur. She is a contributing writer for the Huffington Post. Originally from Chicago, she has lived in Los Angeles and New York. She loves to travel and is passionate about education equity, especially for first generation college students.