How Much Personal Property Insurance Do I Need?

Mishaps are inevitable. As humans, we can’t stop or alter the way the universe works. What we can control is having a solid back-up plan in case of such incidents.

Most mishaps cause financial troubles for people; an accident will make you pay hospital bills, theft of assets will cost money to revive them back and damage to property will have a heft repair sum. Whatever the incident, there will be a financial blow.

Which is why it is always advisable for you to stay ahead of such mishaps by having a financial contingency plan in action. What is that? INSURANCE!

Insurance policies help you cushion the financial blow in case you’re caught up in an accident and have to pay for damages or personal expenses. Property insurance is also one type that helps you protect your property.

Let’s get into more detail.

Personal Property Insurance Definition

A personal property insurance coverage provides protection to your assets in case of such accidents, so anything that is lost or damaged is compensated by the insurance company.

Property insurance works as an umbrella for several other policies like homeowner’s insurance, flood insurance, renter’s insurance etc. personal property is basically everything you own, and a loss that you have to bear on that property including any liability costs is compensated by a personal property insurance.

Personal Property Insurance Coverage

Naturally, personal property insurance covers the cost of damage or loss to your personal property. There are three types of personal property insurance coverage types:

• Replacement cost: The cost to replace your damaged or lost items is given to you by the insurance company.
• Actual cash value: The actual cash value is given; for instance the item damaged was seven years ago. The value of the item 7 years ago will be given, not of the new one.
• Extended replacement cost: To take into account the cost of construction that has gone up due to inflation, the replacement cost is extended and increased. However, this limit may not exceed 25%.

Examples of Personal Property Insurance Coverage

Here are some routine examples of mishaps and losses that are covered by the insurance company.

• Your assets like TV, fridge, laptop etc. are stolen from your house. You will be paid the actual cash value of the items.
• An electric pole falls on your roof with pressure and creates a big hole, the cost of repair as well as your temporary accommodation will be compensated by the insurance company.
• A fire breaks out in your house and most assets are destroyed as well as the house. Everything damaged including the house interior/exterior is also compensated.

Personal property insurance normally excludes damage caused by floods, natural disaster, seeping groundwater, draining issues and other sources of water damage. Other than these, theft, vandalism, damage or loss due to other reasons like lightning or fire are all covered under the insurance.

Insurance Rates by State

Cost rank	State	Average insurance cost
1	Oklahoma	$2,559
2	Kansas	$2,461
3	Texas	$2,451
4	South Dakota	$2,364
5	South Carolina	$2,321
6	Minnesota	$1,952
7	Montana	$1,939
8	Missouri	$1,914
9	North Dakota	$1,901
10	Alabama	$1,850
11	California	$1,826
12	Colorado	$1,813
13	Nebraska	$1,749
14	Florida	$1,727
15	Georgia	$1,713
16	Connecticut	$1,712
17	Louisiana	$1,568
18	Arizona	$1,528
19	Michigan	$1,493
20	Mississippi	$1,442
21	New Jersey	$1,430
22	Iowa	$1,421
23	West Virginia	$1,416
24	Rhode Island	$1,414
25	Kentucky	$1,407
26	Illinois	$1,405
27	Maryland	$1,392
28	Alaska	$1,356
29	Virginia	$1,341
30	Wisconsin	$1,313
31	New Mexico	$1,284
32	Wyoming	$1,263
33	Arkansas	$1,250
34	Tennessee	$1,241
35	Washington	$1,235
36	Ohio	$1,214
37	Oregon	$1,208
38	Massachusetts	$1,168
39	Hawaii	$1,083
40	Nevada	$1,047
41	North Carolina	$992
42	New York	$974
43	Idaho	$940
44	Indiana	$901
45	Maine	$849
46	New Hampshire	$773
47	Utah	$711
48	Pennsylvania	$640
49	Vermont	$614
50	Delaware	$598

Note: Sample rates have been extracted online, courtesy of ValuePenguin.

Some states are considered as most expensive for homeowner’s insurance depending on a number of factors such as the location, insurance companies competition etc. Even if you’re in an expensive state where the insurance cost is naturally very high, there are ways where you can actually lower your premiums.

How much personal property insurance do you actually need?

Depending upon many factors like location and the coverage you need, you can decide how much to go for. If you live in a secure area where the risk of threat is relatively low, you probably need a low amount of coverage.

By paying a high deductible amount, you will have to pay lower premiums. A deductible amount is set when you’re buying the policy- and this is the amount that you have to pay for an expense before the insurance company chips in. Moreover, by having a clear credit history and a good insurance record, you can get a very good deal with premiums even if your state has a high cost of insurance.

Typical insurance policies provide homeowners insurance personal property percentage of up to 50% of the value of your home, and the items such as jewelry are covered up to a certain dollar amount.

Conclusion

Insurance companies give policyholders the option to protect their assets and other personal property in case of theft or loss. If any mishap happens, the insurance company sends an agent to take notes of all the damage caused and then either the money is given to the policyholder or the items are replaced.

It is important that you stay ahead of accidents by insuring your personal property; assets like your TV, laptop etc. are one time investments, people don’t go off buying those every month. In such a case where these things are not only expensive but also valuable, you need to protect these through personal property insurance.

Head to the nearest insurance company to find a suitable policy for yourself!