Coverage C in homeowners insurance is the part of your policy that covers your personal property, such as furniture, appliances, clothing, and electronics, in case of damage or theft. Coverage C can help you replace or repair your belongings if they are destroyed by a covered peril, such as fire, windstorm, vandalism, or burglary. However, coverage C also has some limitations and exclusions that you should be aware of before filing a claim.
Understanding Coverage C in Homeowners Insurance
Definition of Coverage C
Coverage C is also known as personal property coverage or contents coverage. It is one of the four main components of a standard homeowners insurance policy, along with coverage A (dwelling), coverage B (other structures), and coverage D (loss of use). Coverage C pays for the actual cash value or replacement cost of your personal property, depending on your policy terms and endorsements.
What is Covered Under Coverage C?
Coverage C covers your personal property that is located inside or outside your home, as long as it is owned or used by you or your family members. This includes items such as:
- Furniture, rugs, curtains, and bedding
- Appliances, electronics, and computers
- Clothing, shoes, and accessories
- Books, CDs, DVDs, and games
- Jewelry, watches, and furs
- Artwork, antiques, and collectibles
- Sporting goods, bicycles, and tools
- Lawnmowers, snow blowers, and garden equipment
Coverage C also covers your personal property that is temporarily away from your home, such as when you are traveling or moving. However, there may be a lower limit for off-premises coverage, usually 10% of your coverage C limit.
Exclusions from Coverage C
Coverage C does not cover everything that you own or use. There are some items and situations that are excluded from coverage C, such as:
- Cash, bank notes, coins, and securities
- Business property and inventory
- Motor vehicles, aircraft, and watercraft
- Animals, plants, and crops
- Illegal or contraband items
- Property of roomers, boarders, or tenants
- Property damaged by wear and tear, deterioration, or insects
- Property damaged by flood, earthquake, or nuclear hazard
Additionally, coverage C may have sublimits for certain categories of personal property, such as jewelry, furs, firearms, silverware, and business property. These sub limits are usually much lower than your coverage C limit, and may not be enough to cover the full value of your items. You may need to purchase additional coverage or endorsements to increase your limits for these items.
Determining How Much Coverage C You Need
Factors to Consider
The amount of coverage C you need depends on the value and quantity of your personal property. You should consider the following factors when choosing your coverage C limit:
- The cost of replacing or repairing your items at current market prices
- The type and quality of your items and how they depreciate over time
- The risk of damage or theft of your items based on your location and lifestyle
- The deductible amount that you are willing to pay out of pocket before your insurance pays
- The policy terms and endorsements that affect your coverage and limits
Importance of Home Inventory
One of the best ways to determine how much coverage C you need is to create a home inventory. A home inventory is a detailed list of all your personal property, along with their descriptions, values, receipts, photos, and serial numbers. A home inventory can help you:
- Estimate the total value of your personal property and compare it with your coverage C limit
- Identify the items that need additional coverage or endorsements
- Provide proof of ownership and value in case of a claim
- Simplify the claim process and speed up the settlement
You should update your home inventory regularly, especially when you buy or sell items, and store it in a safe and accessible place, such as a cloud service, a fireproof safe, or a trusted friend’s house.
Different Types of Homeowners Insurance Policies
Coverage C in Basic Homeowners Insurance
The most common type of homeowners insurance policy is the HO-3 policy, which provides coverage C for your personal property on an open perils basis. This means that your personal property is covered for any cause of loss unless it is specifically excluded in your policy. However, some insurers may offer a modified version of the HO-3 policy, called the HO-2 policy, which provides coverage C on a named perils basis. This means that your personal property is only covered for the causes of loss that are listed in your policy, such as fire, lightning, windstorm, hail, explosion, smoke, vandalism, theft, and volcanic eruption.
Coverage C in HO-7 Policies for Manufactured Homes
If you own a manufactured home, such as a mobile home or a modular home, you may need a special type of homeowners insurance policy, called the HO-7 policy. The HO-7 policy is similar to the HO-3 policy, except that it also covers the physical structure of your manufactured home on an open perils basis. However, some insurers may offer a modified version of the HO-7 policy, called the HO-8 policy, which provides coverage C on a named perils basis, similar to the HO-2 policy.