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Individual Property Coverage Insurance: What It Is and What It Covers

Often included as part of a comprehensive homeowner’s policy, individual property coverage insurance, also known as personal property insurance, covers the contents of the home against loss, theft or damage due to a covered event. In some cases, individual property coverage also includes protection against personal liability in the event that someone is injured while on the property.

What is covered by individual property coverage insurance?

Typically, any loss or damage caused by a covered peril is protected by personal property home insurance. Fire, severe weather, flooding, vandalism, theft, explosions, plumbing malfunctions and smoke damage are among the events covered by most individual property coverage policies.

What if the value of the personal property is more than the basic level of coverage?

Most companies also offer valuable personal property insurance for items that exceed the normal range. Jewelry, expensive computing equipment, stereo systems, furs, and other items can be individually valued and insured against loss. This coverage generally takes the form of a rider to the insurance policy and requires an additional monthly premium.

What is the difference between replacement value and actual cash value?

Individual property coverage is usually available in the following two basic types:

1. Replacement value policies provide the full cost of replacement at current

prices for items lost, damaged or destroyed by a covered event.

2. Actual cash value coverage only reimburses the policyholder for the actual

value of the item at the time of its loss.

While replacement value policies cost more initially, they provide much more comprehensive coverage and are usually a good investment in the event of a covered loss.

What is liability coverage?

Personal property liability coverage is an important extra in many individual property coverage insurance policies, since it protects the homeowner against legal damages due to injuries sustained on the property.

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