Coverage Provided by Home and Contents Insurance
A homeowners insurance policy is made up of coverage for the structure of your home, coverage for your belongings, and liability insurance to protect you and your family members if a guest sues you after being injured on your property or as a result of your actions. But what exactly does home and contents insurance cover?
Home and contents insurance covers your personal belongings, with some limitations. Any items that are a part of your home’s structure are not covered within this portion of your homeowners policy. Flooring, large appliances, and built-in shelving units are permanent fixtures and fall under dwelling coverage.
So your large area rug is covered by this policy, but the carpeting is not. The same goes for your microwave. It’s small and easily moveable, thus considered a piece of property, whereas your washing machine is going to stay in one place, possibly even when you sell the house.
For some valuables, including fine jewelry, expensive artwork, and coin collections, you need to purchase a rider, or add-on coverage, which covers a particular item. If you have a costly jewelry collection as well as a couple of collector paintings, you’ll need two riders so that you have coverage tailored to your specific items.
Items Covered by Contents Insurance
Jewelry (unless it has its insurance rider)
Personal electronics, including phones and gadgets
Small, unattached appliances like coffee makers and toasters
Firearms and ammunition
Home decor and linens
Property of guests
Items Not Covered by Contents Insurance
Pets, including birds and fish
Permanent fixtures like cupboards or a built-in china cabinet
Any possessions that have other coverage with a rider
Property of long-term non-family guests or tenants
The last item on both lists relates to guests in your home. When your parents come for the holidays, they’re covered. Even when a vandal breaks in and steals your dad’s MacBook and your mom’s diamond necklace. Your out-of-town friends who are staying for two nights are also covered. They are all staying for limited amounts of time and have some personal connection to you.
But if you’re an enterprising college student doing a house hack and renting out three of the bedrooms to friends, their possessions are not covered. Or when you rent out your home in Maine to spend the winter in Florida, your tenants aren’t covered by your policy. Check with an insurance agent to determine the best insurance coverage for these situations.
Accidental Damage Cover
Home insurance claims can be made for personal property that’s damaged or destroyed by an insured event. But what about when a DIY home renovation goes wrong and results in a burst pipe? Or your kids spill their grape juice over your new light-colored rug. These don’t qualify for an insurance payout. However, an accidental damage cover will cover a home emergency.
This optional cover takes over where your regular home insurance cover leaves off. Under your standard policy, accidentally dropping your laptop and shattering the screen or leaving your phone by the pool where it later suffers water damage is not covered.
Do Renters Need Home and Contents Insurance?
Whether you’re a homeowner or renter, you need an insurance policy that covers your possessions. You want to find a rental policy that gives you all the coverage you need, and that’s easy enough. As you read through this, know that the coverages provided by renters insurance and homeowners insurance are very similar.
There are differences because renters don’t have to worry about the structure of the home and garage. Your landlord’s insurance provides dwelling coverage. Depending on your state’s regulations and your landlord’s policies, you may already have contents insurance. And if you don’t, make it a priority to get a policy ASAP because your belongings are not covered under the building owner’s policy.