Imagine if disaster struck and you lost your most prized possessions. Do you know how much it would cost to replace everything? It’s easy to put a number value on a flat-screen TV, a laptop or your furniture. But the worth of more high-value items — like a treasured family heirloom, rare vinyl or fine art — isn't always obvious.
If you have homeowners or renters insurance (side note: good move), your policy might not completely cover your losses, leaving you to pay the difference. That's when personal property insurance jumps in, bridging the gap and helping you get reimbursed for the loss of special belongings. Here's how it works.

What Personal Property Insurance Covers

When you’re shopping for a policy, look for one that covers important valuables that aren't fully covered by your homeowners or renters insurance. First, take stock of your belongings and estimate how much it would realistically cost to replace them in the event of a covered incident, like a fire or theft.
Then, check your existing insurance policy to see if it covers each item, and for how much. You may find that a luxe European watch, for instance, has limited coverage up to a point that's below its real value. Check in with a provider of a more comprehensive personal property insurance policy. If the policy covers it, then there won’t be a gap should it disappear or get damaged.
Every insurance provider is different, so get specific when taking your personal inventory and gathering quotes. Will they cover your great-grandmother's fur coat? Or a vintage camera from the 1960s?

How Personal Property Insurance Policies Are Structured

Coverage typically takes one of two forms. A cash value policy will simply reimburse you for the current value of the item at the time the claim was filed. A replacement cost policy, on the other hand, will reimburse you whatever it'll cost you to replace your lost or damaged item.
Let's say you paid $400 for a pair of designer shoes that are lost in a fire three years later. If it's covered, a cash value policy will reimburse you for the current value of the shoes, which may have depreciated since you bought them. Meanwhile, a replacement cost policy will cover the cost of buying a new pair of comparable shoes.
When deciding on a policy, be prepared to offer receipts to help insurers clarify how much your valuables are worth. If you don't have one, they may require an appraisal.

Who Might Consider Personal Property Insurance

If you've got a lot of valuables and consider yourself pretty risk-averse, personal property coverage might not be a bad idea. Like many types of insurance, it's one of those things you pay for hoping you'll never actually need it.

How Much Does Personal Property Insurance Cost?

Though premiums vary depending on what you’re insuring and which provider you use, the typical cost of purchasing additional personal property coverage (on top of your current homeowners or renters insurance) ranges from about $25 to $1,000 per year, according to Insurance.com.

Where to Buy Personal Property Insurance

Your current renters or homeowners insurance provider might offer extended coverage (companies like Allstate and Geico do). If not, look into buying a standalone personal property insurance policy to protect your specific high-value items.