South Carolina Personal Lines Practice Exam

What determines the limit for Coverage C - Personal Property?

1. 40% of Coverage A

2. 50% of Coverage A

3. 60% of Coverage A

4. 70% of Coverage A

The correct answer is: 50% of Coverage A

Coverage C - Personal Property in a homeowners insurance policy generally provides a limit based on a percentage of Coverage A - Dwelling. Specifically, the limit for Coverage C is typically set at 50% of the limit of Coverage A. This means that if you have $200,000 of coverage for your dwelling, you would automatically have $100,000 of coverage for your personal property. This percentage is established because it provides a standard guideline for evaluating personal property coverage in relation to the value of the home structure itself. It reflects the expectation that personal property will usually constitute a significant portion of overall coverage needs, but is intentionally less than the dwelling to account for the varying values associated with personal belongings. Understanding this ratio is crucial for policyholders when assessing their coverage limits and ensuring they have adequate protection for their personal property.