Coverage C – Personal Property

Coverage C outlines the type and amount of coverage you have for personal property contained inside your home or on your property like your TV or your mountain bike.

When reviewing a particular type of coverage, the first step is to identify the category of coverage you are analyzing. After you know you are looking at Coverage C that relates to your personal property, for example, then you can intelligently evaluate if the type and amount of coverage is adequate.

Personal Property Insurance Considerations

If your personal belongings are damaged or destroyed due to severe weather, Coverage B in your policy will determine whether you are entitled to insurance reimbursement and, if so, how much you are paid for repair or replacement. Here are a few things you need to consider about Coverage C when purchasing new coverage or assessing existing coverage for adequacy.

  1. For what causes of damage is my personal property covered? HO1, HO2, and HO3 policies cover your personal property for damage caused by a fixed list of named perils such as wind or hail. If a type of peril, say earthquakes, is not listed in your policy, your personal property would not be covered. HO5 policies, on the other hand, provide Coverage C for personal property on an open perils basis. Open perils means damage or loss of personal property is covered for any cause except those perils expressly listed and excluded. Common listed exclusions include flooding, earthquakes, and war. In many cases you can add excluded coverage for your personal property by buying additional policies or adding a rider to your main policy.

  2. How will the dollar amount of damage to my personal property be calculated? In most standard home insurance policies, value for damage to your personal property under Coverage C is calculated on actual cash value. In other words, you would be paid only what the items are worth on the day of damage not what it would actually cost to replace those items with new ones. For a higher premium, you can change the policy to pay out for personal property loss based on replacement cost. If you have lots of old and used items that would be expensive to replace, buying a policy with replacement cost may be your best option.

  3. For how much is my personal property covered? The amount of coverage included in Coverage C for personal property varies by policy and by type of personal property. Typically Coverage C will be set by default at approximately 50% of your Coverage A amount. For example, if your Coverage A was set at $200,000 your Coverage C would be set at 50% of $200,000 or $100,000. However, certain classes of possessions like jewelry, furs, antiques, gold, etc. may have certain limits. Your Coverage C amount and limits for particular items can be set higher by endorsement. If you valuable jewelry or other specific items that you want to protect, be sure to discuss them specifically with your broker or agent. Also, to make your life easier in the event of a disaster and to ensure you can prove what items were destroyed, it’s important that you take a home inventory.

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