The Difference Between Contents and Structures Insurance Coverage

If you’ve ever purchased—or simply researched—property insurance, you’ve likely encountered the terms “contents” and “structures” coverage. In a nutshell, “structures” refers to the insured building and other structures, and “contents” refers to what’s inside. But this is insurance, which means no answer is truly simple. This article explains key differences between the two categories and offers guidance to help you make sure you have the coverage you need.

The Basics of Contents vs. Structure Insurance

Do you know if you’re properly protected with both contents and structure insurance? Or do you just assume that the amount of coverage on the building itself, the structure, includes the right kind and correct amount of insurance on the contents?

In many homeowners policies, contents coverage is calculated as a percentage of the dwelling coverage limit. Landlord and commercial property policies may handle contents coverage differently. This cookie-cutter approach could leave you underinsured; it could also have you paying for additional coverage you don’t need. Learn what each type of coverage protects so you can work with your insurance partner to create a custom policy that meets your unique needs.

Key Differences Between Contents and Structure Insurance

There is a difference between coverage of contents and structure (or dwelling).

As a general rule, contents are movable items that aren’t permanently attached to the building. They are typically personal belongings purchased separately from the building. Furniture, artwork, electronics, and clothing are common examples. Freestanding appliances may also be considered contents. For commercial buildings, business equipment such as furniture and office supplies, as well as maintenance equipment, would be considered contents as well.

Building or dwelling coverage generally includes the structure itself and permanently attached features, such as hardwood or tile flooring, countertops, built-in cabinetry, and fixtures.

Detached structures, such as fences, sheds, or garages, may be covered separately under Other Structures or similar coverage, depending on the policy. Make sure your agent knows about any additional structures on your property. If you add a storage shed or vehicle shelter, for example, even if you only plan to use it temporarily, tell your agent or broker.

Making the Right Choice: Contents or Structure Insurance—or Both

Ultimately, if you have any personal or business items in a commercial property (and presumably you have personal items in your home), you need both.

Let’s start with contents.

When insuring a home, start with an inventory of everything in it. Some items, such as artwork, jewelry, firearms, and other high-value property, may be subject to special coverage limits and may require additional scheduled coverage or an endorsement.

For the items that are covered under your standard policy, make sure you understand the difference between replacement cost and actual cash value coverage. Also, think about the value of everything you own. If your home is filled with high-end furniture, expensive clothes, or pricier possessions, the amount of coverage included in your homeowner’s insurance may not be sufficient. (Yes, you can have those limits raised.)

For commercial property, take inventory of all the contents that belong to the building owner, and assign a dollar amount to determine what the items are worth. Such property may include freestanding appliances, furniture in common areas, maintenance equipment, etc. Review this list of items (and values) with your insurance agent/broker to make sure you have enough insurance coverage (and also make sure you don’t have too much).

Building coverage should reflect the cost of repairing or rebuilding the insured structure, including permanently attached interior features such as cabinetry, flooring, and tile.

Keep in mind that landlords typically don’t insure property that belongs to tenants. Tenants should be urged or even required to purchase insurance for their belongings and provide proof of that insurance.

Do You Have the Right Coverage? Review Your Existing Policies

Your agent or broker can determine the current value of your building structure or home. Schedule a review to ensure your coverage is up to date and that you have the right amount of coverage for your building’s contents. The agent should also be able to tell you whether any rare or high-value items may require their own insurance riders.

If you’re not sure if you have the right coverage, contact us at 877-576-5200 or request a free policy review.