Will my renters insurance policy cover my property outside of my home?

Renters insurance is a form of home insurance, and follows the same personal property insurance rules. The policy includes provisions for personal property and for liability insurance. Liability includes property damage and bodily injury that you cause to someone else or their property. Personal property insurance includes everything you own, inside and outside.

Personal property is very broad. Your clothes are personal property, for instance, but so is your lawn mower. Your jewelry is property, and so is the swing set you put up for your child in the back yard. No matter what it is or where it is, if it belongs to you, it is part of your personal property. This is important to understand, because most renters insurance policies will only cover a specific value of personal property.

The best way to itemize it all is to use a video camera and make a room by room video inventory. Be sure to get everything on the recording, from the rugs on the floor to shelves and pictures hanging on the walls. If you have receipts, include them in the recording as well. This type of home inventory is beneficial because it provides you and the insurance company with proof of ownership and visual proof of the condition of the products. In fact, you should give a copy to your insurance company in case they receive a claim from you.

Your policy will even cover personal property that is in your car. For example, if you left an item in the truck of your car and came back to find it missing, your renters insurance policy will pay for the item, up to the amount specified in the policy.

There are two kinds of property protection. The first type is called cash value insurance, and it will pay the cost of the item up to the depreciated cash value, usually much less than what you paid. The other type is called replacement value insurance, and it will repair or replace items regardless of their age and the current market value. Replacement value will cost you more, but the alternative is paying a large portion of the costs out of pocket, and that could amount to far more than replacement coverage.