Personal property cover

Where the limit comes from

On most homeowners policies the personal property limit is set automatically as a proportion of the dwelling limit rather than from anything you own. Raise or lower the dwelling figure and the contents figure generally moves with it.

That is a reasonable starting assumption and a poor finishing one. Two households in identical houses can own wildly different amounts, and the policy has no way of knowing which one you are.

It can normally be adjusted up or down independently. Doing so requires knowing roughly what you own, which is why an inventory is the single most useful thing you can do to this section of the policy.

The limits inside the limit

Underneath the overall figure sits a set of category caps, and those caps decide far more claims than the headline number does. They are usually much lower than people expect and they apply regardless of how much cover you bought overall.

The categories are broadly consistent across policies even though the amounts differ.

• Jewellery and watches, frequently capped for theft specifically rather than for all perils
• Cash, coins and precious metals, usually capped very tightly indeed
• Firearms, often capped for theft
• Silverware and goldware
• Collectibles, art and antiques
• Business property kept at the home
• Electronics and, on some policies, bicycles

Scheduling, and what it changes

Where an item is worth more than its category cap, it can usually be scheduled — listed on the policy individually, generally with its own limit and often with no deductible.

Scheduling normally does two things rather than one. It raises the limit for that item, and it typically broadens the perils covered. An unscheduled ring may be covered if it is stolen but not if it is simply lost; a scheduled one commonly is.

Insurers often ask for a valuation or a receipt for higher-value items. That is worth arranging when you buy something rather than when you claim, because valuing an item that no longer exists is considerably harder.

Cover away from the home

Personal property generally follows you rather than staying at the address, so belongings taken on a trip or kept temporarily elsewhere are commonly still covered, subject to the same category caps and the same deductible.

The usual exception is property kept somewhere else more or less permanently — a storage unit, or belongings at a second address. Cover there is frequently limited to a proportion of the contents limit rather than the whole of it.

Property belonging to someone else, and property you have lent out, are treated differently again. Where a meaningful amount of what you own is not usually at home, that is worth raising specifically.

What to actually do about it

Two questions settle this section. Would the limit replace what you own, and is anything you own worth more than its category cap?

The first is answered by an inventory rather than by an estimate. The second is answered by looking at the caps on your own declarations page and comparing them against the handful of things in the house worth insuring individually.

Both are considerably easier before a loss than after one.