What Is Coverage C on Homeowners Insurance?

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Coverage C, or personal property coverage, protects homeowners in the event that their personal possessions are destroyed, stolen, or suffer damage in a covered loss. It is part of a homeowners insurance policy, and there are two types of Coverage C that determine how your personal property is valued. There are also some limitations to personal property coverage that every homeowner should understand.

Valuation of Coverage C on a Home Insurance Policy by ACV

One way that the value of personal possessions may be calculated under Coverage C on a homeowners policy is by actual cash value (ACV). What this means is that the items you own are valued by how much they could sell for in the present. This method of valuation takes depreciation over time into account, and it usually results in a lower payout on a Coverage C personal property claim.
In this mode of calculating personal property value, the amount an item would garner toward a claim is less than the purchase price. For example, if you bought a big-screen television five years ago for $1,500, it would be valued at that price minus its depreciation. If the depreciation over the past five years was $750, then you could expect to sell that same television today for $750. So the amount you would have toward a Coverage C claim for that item would be $750.

Valuation of Coverage C on a Home Insurance Policy by RV

The second way personal property can be valued under Coverage C on a homeowners policy is by replacement value (RV) or replacement cost. This mode of valuation typically results in a higher claim payout than actual cash value. When using replacement value to assign a dollar amount to an item, an insurance company claims adjuster looks at how much it would take to replace that item.
Let’s use the previous television example but apply replacement value. With this valuation method, depreciation plays no role. While you paid $1,500 five years ago for the television, it may cost $1,250 to purchase that same model of television today. That means $1,250 would go toward your homeowners insurance claim under Coverage C.

Other Considerations with Coverage C on a Homeowners Policy

While Coverage C works to replace your personal property after losses in a covered peril, it does not cover everything. There are often limits as to how much can be paid out for certain types of personal belongings. Categories of personal property that are frequently subject to special limits are listed below, along with common limit amounts:
  • Coin collectables: $200
  • Computers: $1,500
  • Fine art: $2,500
  • Firearms: $2,000
  • Furs: $1,500
  • Home theater systems: $1,500
  • Jewelry: $2,500
  • Musical instruments: $2,500
  • Stamp collectables: $1,500
You should check your Coverage C policy or ask your agent to determine the categorical limits associated with your homeowners policy. 
There is also a total limit to your Coverage C personal property coverage, or a maximum amount that can be paid out on a claim. This total limit is related to the value of your dwelling, as defined in Coverage A dwelling insurance. Personal property total limits usually range from 50% to 75% of the value of the home structure or dwelling. So for a dwelling valued at $500,000, the total limit under Coverage C would be $250,000 to $375,000.
It is possible to increase limits for Coverage C on a homeowners policy or insure your high-value items separately. This results in a higher premium for homeowners insurance or even another insurance payment, as might be the case if you procure specific jewelry insurance on a wedding set. When your personal property value far exceeds the limits of your standard Coverage C, the extra protection could well be worth it.

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