Contents insurance

What is contents insurance?

Contents insurance helps protect the belongings inside your home like furniture, electronics, clothing, and appliances from risks like theft, fire or certain types of damage.

While homeowners insurance covers the structure of the house, contents insurance focuses specifically on what’s inside. It’s also available as a standalone policy for renters, condo owners and even people sharing housing. The average price of a renters insurance policy in the US is around $16/month. Prices for tenants’ contents insurance start from as little as $15.65 for 12 months of cover. However, it is important to note that contents insurance typically does not cover accidental loss within the home.

If your things are damaged or stolen, contents insurance can help you repair, replace or get compensated for them. A contents insurance policy with actual cash value coverage reimburses the policyholder for a percentage of what they originally paid for an item. A deductible is the amount you pay out of pocket before your insurance company contributes to a claim.

How contents insurance works

When you buy contents insurance, you select a coverage amount based on the total value of your personal belongings. To determine this amount, you need to start by taking inventory of your belongings.

If something happens, a break-in, a fire or a covered disaster, you can file a claim. After reviewing the loss, your insurance company will reimburse you based on your policy terms, up to your coverage limits. Documenting belongings can be beneficial when making an insurance claim.

Policies can pay out based on:

Actual cash value (ACV) – Covers the current depreciated value of your belongings.
Replacement cost value (RCV) – Covers what it would cost to buy new items today. Replacement cost coverage is typically more expensive than actual cash value coverage but pays to replace an item at today’s prices.

We’ll explain the difference below!

Who needs contents insurance?

Contents insurance is helpful for:

Homeowners – Even if you have homeowners insurance, contents coverage protects the contents of your home.
Renters – Your landlord’s insurance won’t cover your belongings—only the building. As a renter, you can choose your own contents insurance limits based on your needs./li>
Condo owners – Contents coverage helps protect your property inside your condo.

Do I need contents insurance?

If you own anything you wouldn’t want to pay to replace out of pocket furniture, clothes, jewelry or laptops contents insurance is a smart choice. High-value items may require specific riders or endorsements, which could incur an additional cost.

Contents insurance helps protect you when the unexpected happens, giving you peace of mind and financial support.

Types of contents insurance

Contents insurance is a crucial aspect of home insurance that protects your personal belongings against loss or damage. There are several types of contents insurance, including:

Standard contents insurance: This covers your personal belongings against theft, damage or destruction. It’s the most basic form of protection, making sure that your everyday items are safeguarded.
Accidental damage insurance: This provides additional protection against accidental damage to your belongings, such as spilling red wine on the sofa or breaking a valuable item. It’s a great add-on for those who want extra peace of mind.
High-value item insurance: This provides additional coverage for high-value items, such as jewelry, art or collectibles. If you own expensive items, this coverage makes sure they are adequately protected.
Portable contents insurance: This covers your personal belongings when you are away from home, such as when you are traveling or storing items in a storage unit. It’s perfect for those who frequently take valuable items on the go.

Check your policy to see what type of contents insurance you have and what it covers. You can also customize your policy to fit your needs and budget by adjusting your coverage limits and adding add-ons.

Contents insurance vs. homeowners insurance

Coverage type	What it covers
Contents insurance	Personal belongings like furniture, electronics, and clothes
Homeowners insurance	The structure of your home and sometimes your contents

If you rent, you usually only need contents insurance. If you own a home, your homeowners policy often bundles both structure and contents coverage, but you’ll want to check your policy limits. Your insurance policy will typically outline what you need to inform your provider about during the term of your policy. Most home contents insurance providers allow you to update your policy to include new high-value items.

Contents insurance coverage limits

When you buy contents insurance, your policy will include:

A total limit – The maximum amount the insurance company will pay for all belongings.
Sub-limits – Lower limits for specific items like jewelry, electronics or collectibles.
Coverage limit – The maximum amount the policy will pay toward a covered claim, crucial for understanding the financial protection offered for personal belongings.

For example:

Total contents limit: $50,000
Jewelry sub-limit: $1,500
Electronics sub-limit: $2,500

Standard contents insurance typically limits coverage for valuable belongings like jewelry and furs.

High-value items might need extra coverage (sometimes called a scheduled endorsement). Scheduled personal property coverage is optional coverage you can purchase to provide additional protection for certain valuables. A policy may have a single-article limit, which is the maximum you can claim for any single item unless you specify it separately in the policy. You may need to list high-value items separately on a contents insurance policy to claim their full value if they exceed the single item limit. High-risk items are valuable belongings that are easy to steal, like jewelry, antiques or electronics.

How much contents insurance do I need?

A good rule of thumb: Add up the replacement cost of everything you own to determine how much coverage you need.

That includes:

Furniture and décor
Appliances
Clothing and shoes
Electronics (laptops, TVs, smartphones)
Jewelry, art, and collectibles

If you’re not sure of the total, it’s better to estimate a little higher you’ll want enough coverage if you ever face a major loss.

Speak with a VIU by HUB Advisor to determine the right amount of coverage for your situation.

How to calculate the value of your contents

Here’s a simple way to estimate your contents value:

Make a list – Walk room by room and write down major items.
Take photos or videos – Create a visual record.
Keep receipts – If you still have them, great! If not, estimate costs.
Update regularly – Add new purchases or gifts over time.

Having an inventory makes claims easier and helps you make sure you’re properly insured. Official documentation, such as receipts and appraisals, should be attached to your home inventory.

What does contents insurance cover?

Contents insurance usually covers:

Appliances
Art and collectibles (may need extra coverage)
Clothing, shoes, accessories
Electronics (laptops, TVs, gaming systems)
Furniture
Home office equipment
Jewelry (up to policy limits)
Sports equipment
Tools and hobby gear

It covers these belongings against covered perils like theft, fire, certain types of water damage, vandalism and storms. In standard home insurance policies, contents are covered on a named perils basis. Contents insurance may cover personal belongings while in transit to a new home, but does not cover damage caused by movers. Some contents policies will cover items in your garden, but you may need to add extra cover for expensive items. You can get short-term home insurance to cover unoccupied properties during renovations.

Contents insurance typically helps policyholders replace stolen items, though there are often sub-limits for high-value items like jewelry.

What contents insurance doesn’t cover

Standard contents insurance often does not cover:

Wear and tear or aging
Damage from earthquakes or floods (requires separate coverage)
Pest infestations (like termites or rodents)
War or nuclear events
Intentional damage by you

Additionally, damage from water leaks is often not covered by standard contents insurance.

Always check your policy’s exclusions so you know exactly what’s protected.

What risks does contents insurance cover?

Typical covered risks include:

Theft or burglary
Fire and smoke damage
Vandalism
Certain weather events (hail, windstorms)
Sudden water damage from burst pipes

Some policies offer optional add-ons for broader risks, like accidental damage or flood coverage.

Accidental damage and add-ons

Accidental damage is a common add-on to contents insurance policies. It provides protection against unforeseen events, such as:

Spilling red wine on the sofa
Breaking a valuable item
Damaging a mobile phone

Add-ons can provide additional protection and peace of mind. Some common add-ons include:

Boiler breakdowns: covers boiler repairs or replacement, so you stay warm if it breaks.
Home emergency cover: provides coverage for emergency repairs, such as plumbing or electrical issues, offering quick solutions to urgent problems.
Garden cover: provides coverage for garden furniture, plants, and other outdoor items, protecting your outdoor space.

Review your policy documents, especially the exclusions to understand what’s covered and what’s not.

Does renter's insurance include contents coverage?

Yes! Renter's insurance is essentially contents insurance plus liability protection, similar to a home insurance policy that safeguards personal belongings within the home.

If you’re renting a home, apartment, or condo, your Renter's Policy typically covers your personal belongings up to your selected limits, whereas a homeowners insurance policy also impacts the coverage limits for items stored off-premise.

Does contents insurance cover items outside my home?

Sometimes, yes! This depends on your existing contents insurance policy.

Limited off-premises coverage may protect your belongings temporarily when they’re away from home (for example, your laptop stolen from your car). Coverage limits for belongings stored off premises may be lower than those for items in the home, often capped at a percentage of the total policy limit. Policy covers typically apply for items stored off-premises in a storage unit.
Special endorsements can expand off-premises coverage if needed.

If you're unsure, connect with a VIU by HUB Advisor to explore your coverage options for personal items away from home.

How does house contents insurance pay out?

After a covered loss:

You file a claim – Describe what happened and list what was lost or damaged.
An adjuster reviews the loss – They may ask for photos, receipts or an inventory list. Proof of purchase may be needed, especially for high-value items.
You receive a payout – Based on your policy (either actual cash value or replacement cost value).

The policy premium can vary based on factors such as the deductible, coverage limits and additional valuables included in the policy.

Actual cash value vs. replacement cost value

Term	What it means
Actual Cash Value (ACV)	Pays the depreciated value of your items (what they were worth at the time of loss)
Replacement Cost Value (RCV)	Pays what it would cost to buy new items of similar kind and quality

Claims process and valuation

The claims process for contents insurance typically involves:

Notifying your insurance company: You must notify your insurer as soon as possible after discovering the loss or damage. Prompt notification helps expedite the claims process.
Providing proof of ownership: You may need to provide proof of ownership, such as receipts or appraisals, to support your claim. This documentation is crucial for verifying the value of your belongings.
Valuing the damaged item: Your insurance company will value the damaged item to determine the amount of the claim. This valuation can be based on actual cash value or replacement cost value, depending on your policy.
Receiving payment: Once the claim is approved, you will receive payment to repair or replace the damaged item. The payout process is straightforward, making sure you can quickly recover from your loss.

Comparison service and quotes

When shopping for contents insurance, it’s essential to compare quotes from different insurers to find the best policy for your needs and budget. A comparison service can help you:

Compare coverage limits: Compare the coverage limits of different policies to make sure you have adequate protection for your personal belongings.
Compare policy features: Compare the features of different policies, such as accidental damage or high-value item coverage, to find the best fit for your needs.
Compare prices: Compare the prices of different policies to find the best value for your money. It’s important to balance cost with the level of coverage provided.
Read reviews: Read reviews from other customers to get an idea of the Insurance company's reputation and customer service. This can provide insights into the Insurance company’s reliability and responsiveness.

By using a comparison service, you can make an informed decision and find the best contents insurance policy for your needs and budget. Remember to always read the policy documents carefully and ask questions if you’re unsure about any aspect of the policy.

Sources:

https://www.lemonade.com/renters/explained/this-is-how-much-renters-insurance-actually-costs/