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Home contents insurance explained
Contents insurance, sometimes called home contents insurance, is a type of insurance that covers your personal property, but doesn’t cover your home (either the actual building or the land it’s built on).
Contents insurance is usually meant for renters
Most of the time, insurance providers sell contents insurance to renters, not homeowners. That’s because, as a renter, the building you live in is your landlord’s responsibility, and your insurance policy doesn’t need to cover it. Your insurance just needs to cover your personal belongings (in other words, the contents of your home).
Conversely, homeowners need to insure both their belongings and the property they live in. While some insurers sell contents insurance and building insurance separately, this is fairly rare — they usually just bundle both types of insurance together in a single homeowners insurance policy to make things simpler for themselves and their customers.
Because it’s unusual for anyone who isn’t a renter to purchase contents insurance, people often use the terms “contents insurance” and “renters insurance” interchangeably. All renters insurance policies include contents insurance, but it’s usually referred to as personal property coverage.
What items are covered by contents insurance?
The contents insurance provided by standard renters insurance policies covers virtually all of your possessions. There are only two exceptions:
- Your car, which is covered by your auto insurance
- Your building, which is covered by your landlord’s insurance policy
Unusually rare and expensive items (like jewelry and fine art) sometimes have sub-limits, or caps on how much your provider will pay for them, but you can increase these limits by purchasing an addition to your policy called a rider.
Contents insurance covers items stored outside the home
Although the name “contents insurance” sounds like it only refers to items inside your home, the contents insurance provided by your renters insurance policy will cover your possessions wherever they are.
Items in storage units are covered by contents insurance, and your luggage is covered from theft while you’re traveling. Any possessions you keep in your car are covered as well, even though your car isn’t covered by renters insurance itself.
How contents insurance protects your belongings
If you have contents insurance and your possessions are damaged by a covered peril, such as fire or vandalism, you can report the damage to your insurance provider. They’ll send you money reimbursing you for the lost items, although you’ll have to pay a small amount yourself, called the deductible, which will usually be around $500.
Your provider also won’t pay out anything exceeding the coverage limit of your policy. Fortunately, most contents insurance policies offer between $15,000 and $30,000 of coverage, which is enough to protect the average renter’s belongings. If you’re interested in getting covered, check out our article on whether you need renters insurance to learn more.
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