Contents insurance: How to insure your personal property

Contents insurance is protection for your personal possessions, whether they're in your house or while you travel. If you're a homeowner, condo owner or tenant, contents insurance covers your belongings, including furniture, electronics, clothing, appliances, art and jewellery. Contents insurance is typically included in a comprehensive home insurance policy and is the central portion of a tenant's insurance policy.

For homeowners or condo owners, contents insurance is pre-packaged with your comprehensive policy. Depending on your insurance provider, there can be limits and exclusions. Still, because it's an overall package, covering everything is considered a best practice.

For tenants, contents insurance and their limits are more defined. You tell the insurer how much contents insurance you need to protect all your valuables. For example, if you have a small wardrobe, an old TV, and a laptop, replacing everything would cost $5,000, so you can buy contents insurance for that amount. But if you have a 4K LED television, a high-end laptop, and other pricey possessions, replacing them all could cost upwards of $30,000. 

At the end of the day, it’s up to you to decide the best contents insurance coverage amount for your needs. No matter what type of possession it is, it's best to keep a record, ideally with receipts, to make filing a home insurance claim for contents coverage smooth.

A peril is a risk or an event that could damage your belongings. Common perils include fire, theft, vandalism, smoke, wind, hail and burst pipes. It is important to read your home insurance policy and understand any exclusions or coverage gaps so you know which perils you are and are not protected against. For example, if you live in an active earthquake zone, you’ll need to add earthquake insurance to your policy to be protected. 

An insurance company will replace your contents if it approves your claim, but there are two different ways to do it: actual cash value or replacement cost. 

Some items may be excluded from standard contents coverage or may be covered only up to a limited amount. These can include items such as glassware, china, collectibles, antiques, bicycles, golf carts, jewellery, watches, and wine collections. In many cases, you can still insure these higher-value items by scheduling them on your policy or by purchasing coverage endorsements. 

Each insurance company sets its own limits and exclusions, so it’s important to review your policy carefully to understand what you’re covered for, especially for items that are valuable to you.