What is contents insurance?

Contents insurance, also called personal property coverage, is automatically included in your home insurance and covers things like clothing, electronics, furniture and jewellery. It's a sort of safety net that, under most insurance contracts, covers these items against loss or damage caused by things like fire, theft and some kinds of water damage, regardless of whether you’re a tenant, a homeowner or a condo owner.

Have questions about how your personal items are covered? Check out our guide for all the answers you need.

Contents insurance could help reimburse you if, say, water damaged your furniture and the loss was covered under your policy. Or if your laptop were stolen from your parked car. Or even if you lost your engagement ring on vacation. Just be aware that you might need extra coverage for high-value items like bikes, artwork or expensive jewellery.

No matter how much your personal possessions are worth, it's a good idea to maintain an up-to-date inventory. Not only will it give you an idea of what your things are actually worth, but it might even speed up the claims process if something were to happen.

Having insurance for your belongings can offer financial relief if something you own gets lost or damaged.  

Pro tip: If you move, take the time to review your policy to make sure it still reflects your reality.

When it comes to home insurance, there's a big difference between coverage for your belongings and coverage for the structure of the building itself. The home contents insurance portion covers your stuff, while the building portion covers the actual structure of your home: walls, floors, plumbing and electrical systems.

1. Renter or tenant insurance also covers any improvements you’ve made to or paid for in the home.

2. Condo insurance covers upgrades to your unit as well, though some details can vary by province.

Contents insurance covers your belongings if they’re stolen, damaged, or destroyed—at home or away, even abroad. Here’s a closer look at what’s included.

Personal property coverage covers a wide range of items, whether they’re physically located in your home or are temporarily away. Items may include:

• Clothing and accessories (coats, shoes, handbags)

• Electronics (TVs, laptops, gaming consoles, mobile phones)

• Food in your fridge or freezer (if the power goes out and your food goes bad) 

• Furniture and appliances (couches, blenders, fridges)

• Jewellery (like an engagement ring) up to the coverage limit for this category

• Sporting equipment (hockey gear, fishing rods, bicycles) up to the coverage limit for this category

• Personal tools and DIY gear (jigsaws, ladders) 

• Snow blowers, lawn mowers and garden tractors up to the coverage limit for this category

Contents insurance protects your belongings against different kinds of covered perils—also called covered losses or risks. Always check the deductible on your policy, since that’s the amount you’ll have to pay out of pocket if you make a claim. Some common examples of covered perils include:

• Lightning

• Fire damage

• Windstorms 

• Wind and hail damage

• Theft

• Vandalism

• Certain types of water damage (like a broken washer-hose, a sudden water-heater leak or an overflowing bathtub—some exclusions may apply) 

While contents insurance covers a lot of common risks, some exclusions apply. For example, the following situations aren't usually covered under a standard policy:

• Flooding (like river overflow or dam break) (unless you have extra coverage)

• Earthquakes (unless you have extra coverage)

• Intentional damage 

• Normal wear and tear

Making a detailed inventory of your belongings is a smart move that can save you time and stress if something happens. If you ever need to file a claim, an organized list of your personal items can be a real game-changer. Here’s how to get started:

1. Group your possessions by room: Living room, bedroom, kitchen, etc.

2. Take photos or videos: Capture each item up close and in its setting to show proof of ownership and the condition it’s in.

3. Record details and value: Note the brand, model, purchase date, price paid and current estimated value (replacement cost or actual cash value).

4. Keep your receipts: Store paper or digital copies in a safe, accessible place.

5. Update your list regularly: Add new purchases and remove items you’ve sold, donated or tossed.

With an up-to-date inventory, you won't forget to include valuable items if you need to make a claim. Even a lost phone can cost hundreds of dollars to replace, so it’s important not to underestimate the value of your stuff.

Online tools like the personal property inventory of the Insurance Bureau of Canada’s can help.

In Canada, there’s no federal law requiring you to have contents insurance, but home insurance is required in certain situations. 

Homeowners: Mortgage lenders almost always ask for proof of insurance before releasing funds. Without insurance, you’d be on the hook for the full cost of repairs or rebuilding if something happened (like a fire, theft or water damage).

Condo owners: Lenders require proof of insurance for condos too. Plus, most condo declarations require home insurance, and in Quebec, condo owners are required by law to carry third-party liability coverage. 

Renters: Many leases include a clause requiring tenant insurance, which typically covers liability for damage or injury caused to others, in addition to contents insurance.

The price of your home insurance (which includes contents coverage) depends on several factors—like the total value of your belongings, where you live, the level of coverage you choose and your deductible. One of the biggest differences in cost comes from the type of policy you pick:

• All perils: Protects against all risks, except for the limitations and exclusions listed in your policy.

• Specified perils: Covers only the basic risks specified in your policy, like fire and smoke damage, lightning, smoke, tornadoes, hail, wind and certain kinds of accidental damage caused by water.

All-risk policies usually cost more, but they offer broader protection. To strike the right balance between cost and coverage, be sure to get multiple home insurance quotes, compare them carefully and check what’s included in each one. 

Here’s an example of typical annual price ranges for contents insurance:

• Homeowners (single-family home): about $500 to $2,500* per year

• Renters: about $150 to $600* per year

• Condo owners: about $200 to $1,000* per year 

Make sure to tell your insurance company about any changes to your home or belongings, since they can affect your insurance premiums:

• Renovations or additions (like finishing a basement or adding a room)

• New pool or sauna

• Security upgrades (alarm system, detectors, surveillance cameras) 

• High-value items (bike, jewellery, artwork, etc.)

If the changes make it more expensive to repair or rebuild your home, your premium may go up. Other changes—like getting a home security system—reduce risk, which can make your premium go down. Be sure to notify your insurer early in the process about any upgrades or major purchases, to make sure you're adequately covered and paying a fair price.  

Most policies use one of two methods to figure out how much you’ll get for lost or damaged contents if you have to make an insurance claim:

• Replacement cost: Your payout is based on what it would cost to repair or replace your items, according to the terms of your policy.

• Actual cash value (ACV): Your payout is based on the repair or replacement cost minus depreciation, as outlined in your policy.

Even if you haven’t filed a claim, your premium can go up for reasons such as inflation (which drives up repair and replacement costs), more severe weather events or an increase in claims in your area.

To make sure your coverage still fits your needs, it's a good idea to get into the habit of reviewing your policy every year. The best way to do that is to update your home inventory list with new purchases and adjust your coverage so it reflects the current replacement value of your belongings.

Contents insurance helps protect you from life’s unexpected events—like certain types of water damage, theft or fire—and covers your belongings both at home and while temporarily away. Take the time to make a detailed inventory of your items in case of a claim and be sure to review your home insurance every year to make sure your coverage continues to match your needs.

With Desjardins, your belongings are covered in case of a claim, according to your policy terms. Get a personalized home insurance quote today or reach out to our team to review your current coverage.

* Cost estimates provided for information purposes only.