What Is Contents Insurance?

When you own a home, it’s wise to carry homeowners insurance to cover the structure — plus, your mortgage provider might require this insurance. Contents insurance protects your belongings in case of a covered peril, such as fire or theft. When purchasing your homeowners insurance, you can select your contents coverage limit based on the value of your possessions. Learn what you need to know about contents coverage and how to select the best options based on your belongings.

Understanding Contents Insurance

Contents insurance helps to protect your belongings in case of covered events. Here’s a look at some common scenarios in which homeowners and renters call upon this insurance coverage.

• Fire: If a fire damages part of your home, your contents coverage can provide funds to replace those items, such as smoke-covered furniture or singed linens.
• Theft: If a burglar infiltrates your home, contents insurance can help you replace expensive items, such as technology or certain pieces of jewelry.
• Water damage: A small leak can cause big damage to vanities, valuables and other items. You can replace those items with contents insurance.
• Property destruction: Sometimes anger causes people to do crazy things. So if a nasty neighbor or old acquaintance smashes your windows and damages your belongings, your insurance might step in to help you replace your damaged goods.

What Does Contents Insurance Cover?

For the most part, contents insurance will cover replacing damaged or stolen items in your home. Here’s a look at what is covered.

• Art
• Bikes
• Books
• Clothes
• Decor
• Dishes
• Firearms
• Furniture
• Inexpensive jewelry items (though fine jewelry will need a jewelry policy)
• Laptops/computers/monitors, etc.
• Small appliances that are not built into the home 
• Smart home devices
• Smartphones
• Sporting equipment
• TVs and other media devices

What Contents Insurance Does Not Cover

While contents insurance provides coverage for many personal items, it also excludes other items.

• The full value of high-ticket items due to depreciation
• Vehicles such as those should be covered under an auto policy
• Features installed in your home, such as cabinets, flooring, etc. because those items are covered under dwelling insurance
• Pets
• Lost or misplaced goods
• Goods that have coverage under another insurance policy
• Belongings that exceed your insurance coverage limits
• Items you’ve sold, given to acquaintances to borrow or were not in your possession at the time of the covered event
• Scheduled property, such as fine jewelry or art
• Events that relate to perils that are not covered, such as floods or earthquakes

How Much Contents Insurance Do You Need?

One challenge that renters and homeowners face when purchasing their insurance is deciding how much contents coverage to purchase. Your goal should be to protect your most valuable belongings while managing the cost of your insurance.

To find how much coverage you need, follow these steps.

• Walk through your home taking photos or videos of your property.
• Write out your valuable items alongside their estimated value. Try to do this in a spreadsheet so you can add up their values quickly.
• When you have many items within a category, such as small kitchen appliances, you might want to estimate their value as a whole instead of each item individually.
• Don’t forget to go out into the garage. You likely have many valuables here including toys like bikes and tools.
• Once you have a value, round up to the nearest $10,000. For example, if you find that you have $55,000, round that up to $60,0000 and purchase contents insurance for that value.

How Much Does Content Insurance Cost?

Because content insurance is part of homeowners or renters insurance, you can’t buy it individually. Your location, insurance deductible, home value, whether you’re in a flood zone, the population density and much more will all impact your total insurance rate. However, renters insurance is $180 per year and homeowners insurance averages $2,153 per year. You should get quotes from multiple insurance policies before purchasing to ensure you’ve found the most affordable policy.

Contents Insurance Coverage Limits

While you can add up your contents and value them to decide the best-case scenario to protect your belongings, you can also take 50% of your home’s value and use that for contents insurance. So if you have a $400,000 home, you might purchase $200,000 in contents coverage.

Renters don’t have that luxury and will need to decide how much “contents” coverage to get or purchase the amount of coverage their landlord requires.

Actual Cash Value vs. Replacement Cost 

Some policies pay actual cash value for your belongings while others pay replacement cost. It’s important to know the difference. Actual cash value pays out the value of the item factoring in depreciation. Replacement cost will pay to replace an item based on today’s prices.

Replacement cost will cost more for your insurance, however, it also ensures greater financial comfort in case of an incident. Newer items are easier to cover with actual cash value because they will have less depreciation impact. You should discuss the matter with your insurance agent to determine the best policy for you that balances insurance premiums with financial impacts if you call upon your insurance coverage.

How to Get Contents Insurance

To get contents insurance, you’ll need homeowners insurance or renters insurance. The process for doing so looks like this.

• Reach out to an insurance agent with details about your home or rental unit. Or quote insurance with online carriers being thorough in how you answer the questions to ensure you get adequate coverage.
• Review pricing factors such as choosing an appropriate deductible limit that you can pay but that balances the price of your monthly deductible.
• Select the contents insurance that will provide coverage based on your personal property. Your agent likely used a formula of 50% of your home’s value to determine how much “contents” coverage you need. But if you need additional coverage, request an updated quote.
• Purchase the insurance and save your declaration pages somewhere secure in case you need to file a claim.

Compare the Best Contents Insurance Providers

Find the best insurance providers to purchase quality homeowners or renters insurance with the contents coverage you need.

Protect Your Personal Belongings from the Unknown

Contents insurance helps you protect your personal belongings from events you can’t predict, such as fire or theft. Make sure you have adequate coverage based on the value of your goods. Review your coverage with your agent annually to make updates as needed.

Frequently Asked Questions