South Carolina Personal Lines Practice Exam

What is the primary purpose of Coverage C in a DP policy?

1. To cover personal liability

2. To cover the dwelling itself

3. To cover personal property of the insured

4. To cover fair rental value

The correct answer is: To cover personal property of the insured

The primary purpose of Coverage C in a Dwelling Property (DP) policy is to cover personal property of the insured. This coverage provides protection for the personal belongings owned by the insured, such as furniture, clothing, and appliances, against various risks like theft, fire, and certain types of water damage. By covering personal property, Coverage C helps policyholders recover financially in the event of loss or damage to their possessions, enabling them to replace or repair their items. The other coverage types in a DP policy serve different purposes. Coverage A is focused on the dwelling itself, ensuring that the structure of the home is protected. Coverage B generally covers other structures on the property, such as garages or sheds, while Coverage D addresses fair rental value, which compensates the insured for lost rental income if a property becomes uninhabitable due to a covered loss. Understanding the specific roles of each coverage helps clarify how a DP policy functions as a comprehensive risk management tool.