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What is Property Insurance?

Property Insurance: The Basics

You already know the importance of homeowners insurance (and if you don’t, you can learn about it here).  But what about insurance for pricey, specific items within your home?  What about when you take those items with you outside your home, or if something happens to them that your homeowner’s insurance doesn’t cover?  These are important questions, and we want to answer them… so let’s get started! 

Real vs. Personal Property Insurance: What’s The Difference?

Real Property vs. Personal Property

When it comes to the term “property” in any legal document, there are two kinds: Real property and personal propertyReal property means any immobile structure or object affixed to the land that you own:  this includes the house, permanent fencing, a garage, a shed (that is bolted to the ground, or cannot be moved), or even a tree.  (Fun fact: if you own a mobile home that has not been permanently affixed to a foundation, it is not considered real property, despite it being your home in every other sense of the word.)

Personal property, on the other hand, means… basically everything else.  Things you could or would take with you if you were to move.  This includes furniture, appliances*, jewellery, clothing, or a non-motorized vehicle, such as your bicycle.  (*Sometimes the term “appliance” can be confusing… for example, an HVAC unit would be considered a fixture, and therefore “real property”.  However, an air conditioning unit that you may have in your window that serves the same function can be unplugged and moved… therefore it is considered personal property.) 

This means that personal property insurance (or PPI) is insurance that covers the things you own that can be moved around, taken with you, or removed from the premises with reasonable ease.  Basically… It’s your “stuff”. 

What Isn’t Considered Personal Property

Some things that are detached from the house that belong to you aren’t legally considered “personal property” according to insurance companies.  This includes your car or any other motorized vehicle, your pet, or anything that flies or hovers over your house.  (FYI: anything furnished by your landlord usually isn’t covered either. It does, however, cover the personal property that a friend or family member may have left temporarily at your home in the event of one of the perils mentioned above.)  

What Does Personal Property Insurance Cover?

Personal Property insurance covers your “stuff” against damage or loss (also known as “perils”).  Damages or loss could happen in the case of fire, lightning, windstorm, hail, smoke, vandalism, theft, freezing, damage from aircraft or vehicles, and riots, to name a few.  It’s also known as “Coverage C” on your renters or homeowners insurance policy.  In the event one of these things happens, your policy will help to pay to replace these items.  

How Much Does Personal Property Insurance Cover Me For?

Personal property insurance is usually a percentage of your overall homeowners insurance coverage.  For example, your policy could be for a total of $200,000, and allow 20% of that policy to be used to cover personal property.  That would mean you had a maximum allowance of $40,000 to cover losses or damage to your personal belongings.  

What About My Really Expensive Stuff?

If you have items that are particularly valuable, such as top of the line electronics, expensive jewelry, or valuable antiques, your standard policy’s insurance coverage might not be enough.  For these items, it’s highly recommended that you get supplemental insurance.  

How Much Personal Property Should I Get Then?

Good question.  The simple answer: it depends on how much stuff you have, and how you would feel about losing it!  More specifically, you’ll need to take inventory of the things that matter to you the most or that you have large quantities of (such as your clothing) and estimate their value, and what it might cost to replace them.  Here’s a few helpful tips: 

Take pictures.  Walk around your property and take photos (or video) of the things you want covered in your policy.  

Make a list. Write down all of the things you’ve taken footage of.  If there’s an item you have a lot of, rounding off a number is fine.  

Do some research.  If you don’t immediately know what your property is worth, it’s worthwhile to do a quick search online or in your local shop.  Even if you think you know, oftentimes an item isn’t worth the same price that you paid for it. For items that are particularly expensive (such as gold or diamond jewellery or expensive musical instruments), you may even want to get them professionally appraised.  In fact, some insurance companies may even require it.  

Add it all up.  Once you have the dollar amounts of everything, calculate the total and round to the nearest $10,000 you would need.  This is a good estimate of the amount of coverage you’ll want to get. 

This can all seem like a daunting process, so don’t go it alone.  Fill out the form below and have one of our friendly, knowledgeable experts help you find the right policy and best rate today.

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