Dwelling vs. Personal Property: Coverage A vs. Coverage C (U.S. Guide)

If a tree hits your roof, that’s usually a dwelling (Coverage A) claim. If a burst pipe ruins your couch and TV,
that’s usually personal property (Coverage C). Same event, two different “buckets,” two different limits—and sometimes
two different payout rules.¹

1) Homeowners coverages (the parts that matter here)

Most homeowners policies group property coverage like this:¹

• Coverage A: Dwelling
• Coverage B: Other Structures
• Coverage C: Personal Property
• Coverage D: Loss of Use (Additional Living Expenses)

NAIC explains the dwelling limit is often the “anchor” because other limits are commonly expressed as percentages of Coverage A.
NAIC’s consumer guide shows typical package defaults (your policy may differ):¹

• Other Structures: often 10% of Coverage A
• Personal Property: often 50% of Coverage A
• Loss of Use: often 20% of Coverage A

2) Dwelling coverage (Coverage A) in plain English

What usually counts as “the dwelling”

Coverage A generally applies to the main structure and things that are part of the building or permanently attached—like
fixtures and built-in systems (plumbing, electrical wiring, heating, and permanently installed A/C).⁶

Note: Attached structures are often treated as part of Coverage A, but always confirm your policy wording.

What Coverage A should be based on

Coverage A is meant to reflect replacement cost (rebuild cost), not what you could sell the home for. NAIC explains replacement cost and
market value are not the same, and market value includes land and real estate conditions.⁷
Travelers gives the same distinction plainly: market value is what the home could sell for; replacement cost is what it would take to reconstruct with similar materials at current prices.⁸

A common misunderstanding: “water” and “earth”

Even when you have solid Coverage A and C, many policies exclude certain causes of loss. NAIC notes perils commonly excluded
include flood and earthquake, which often require separate coverage.⁹

3) Personal property (Coverage C) in plain English

What counts as personal property

Coverage C is your movable stuff:

• Furniture and decor
• Clothing
• Electronics
• Kitchenware and small appliances
• Tools, sports gear, and similar items

Coverage C is often tied to Coverage A

The III notes personal belongings coverage is generally about 50% to 70% of the insurance you have on the structure of the house.¹⁰
NAIC’s consumer guide shows a common package default where personal property is 50% of the dwelling limit—while also warning that real policies can use different percentages.¹¹

Off-premises coverage is often included, but still has rules

NAIC notes personal property coverage can apply even when your belongings aren’t on your property (for example, an off-site storage locker or with a child at college),
but limits and conditions still apply.¹²

Sub-limits are where people get burned

Even with a solid Coverage C limit, most policies put smaller caps on certain categories (for example: jewelry, cash, collectibles, firearms, etc.).
NAIC notes a scheduled personal property endorsement (personal articles floater) can cover items whose value exceeds normal policy limits.¹³

4) The easiest way to remember the difference

• Dwelling (A): building materials and built-ins
• Personal property (C): things you’d take if you moved out

Real-life examples:

• Kitchen fire: smoke damages built-in cabinets → Coverage A; smoke ruins sofa/TV → Coverage C
• Theft: stolen laptop/camera/jewelry → Coverage C; kicked-in door frame → Coverage A

5) Replacement cost vs. actual cash value (this changes claim checks)

Two policies can both say “Coverage C: $200,000” and still pay very differently because of loss settlement:

• Replacement cost: pays what it costs to replace/repair without subtracting depreciation.¹⁴
• Actual cash value (ACV): pays replacement cost minus depreciation for age/wear. NAIC notes ACV often doesn’t pay enough to fully replace property.¹⁵

A common setup: if you have replacement cost coverage, the insurer may pay ACV first, then reimburse “recoverable depreciation” after you repair/replace and provide documentation.
North Carolina’s Department of Insurance describes this process in consumer guidance.¹⁶

Practical takeaway: many policies settle the dwelling on replacement cost, while personal property may default to ACV unless you add a replacement-cost endorsement.
NAIC notes personal property replacement cost can be added by endorsement.¹⁷

6) Choosing the right dwelling limit (Coverage A)

• Base it on rebuild cost, not the sale price.¹³
• Update after renovations and additions.
• Review annually so the limit doesn’t drift below rebuilding cost.
  NAIC warns that if dwelling coverage drops below a threshold of replacement cost (commonly 80% in many policies), claim payments can be reduced (rule depends on your contract).¹⁸

7) Choosing the right personal property limit (Coverage C)

Fast reality check

If Coverage A is $400,000 and Coverage C is 50%, your contents limit is $200,000.
Ask yourself: could you replace everything you own new for that amount?
The III recommends doing a home inventory to determine whether your personal property coverage is enough.¹⁹

The best method: a basic home inventory

The III explains a home inventory helps you buy the right amount of coverage and settle claims faster.²⁰
NAIC also offers a Home Inventory tool/app concept for recording belongings (including photos and barcode scanning).²¹

Minimum-viable inventory (30–60 minutes):

• Walk-through video of each room (open closets/drawers quickly)
• Photos of serial numbers for electronics
• Save to cloud storage
• Keep receipts/appraisals for valuables

8) Filing a claim: what’s different for dwelling vs. personal property

Dwelling claim documentation

• Wide + close-up photos of damage
• Repair estimates
• Pre-loss records if relevant (permits, invoices, renovation details)

Personal property claim documentation

• Item list (brand/model, approximate age, replacement price)
• Receipts/photos where you have them
• Serial numbers for electronics

A home inventory is the shortcut that makes this doable under stress.⁷

9) Coverage gaps to review next

• Replacement cost vs ACV (deep dive)
• Deductibles explained
• Water backup coverage
• Service line coverage
• Ordinance or law coverage

NAIC notes endorsements and separate policies are how you add certain coverages or increase limits.²²

FAQ

Is personal property covered outside the home?
Often, yes—many policies extend coverage beyond the home, but limits and conditions vary. NAIC notes coverage may apply even when items are off premises
(e.g., storage locker or college), so verify your policy terms.¹

Does dwelling coverage include detached garages and sheds?
Detached structures usually fall under Coverage B (Other Structures). NAIC shows a common package default of 10% of the dwelling limit, though policies can differ and you can often adjust it.¹

Should I insure personal property at replacement cost?
If you couldn’t comfortably replace most belongings out of pocket, replacement-cost personal property coverage is worth pricing.
NAIC explains ACV reduces payouts for depreciation and often won’t fully replace items, and also notes replacement-cost coverage for contents may be added by endorsement.⁴¹

References

1. NAIC. A Consumer’s Guide to Home Insurance (coverage definitions; off-premises property; flood/earthquake exclusions; limits as % of dwelling; typical package limits; replacement cost vs market value; ACV vs replacement cost; endorsements).
   Source (PDF)
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2. Insurance Information Institute (III). “What is covered by a standard homeowners policy?” (personal property generally 50%–70% of dwelling; inventory recommendation).
   Source
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3. Travelers. “Is Your Home Insured to Its Estimated Replacement Cost?” (market value vs replacement cost distinction).
   Source
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4. NAIC. “What’s the difference between actual cash value (ACV) and replacement cost coverage?” (ACV definition; often not enough to fully replace).
   Source
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5. North Carolina Department of Insurance (NC DOI). “Actual Cash Value vs Replacement Cost Value” (ACV first; recoverable depreciation after replacement/receipts).
   Source
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6. NAIC. “Home Inventory” (NAIC Home Inventory App features: barcode scan + photos).
   Source
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7. Insurance Information Institute (III). “How to create a home inventory” (inventory benefits + steps).
   Source
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