Bill has a replacement cost policy with a total dwelling coverage of $300,000. His policy covers his personal property also at full replacement. It is currently set to 50% of his dwelling coverage, so he has $150,000 total for personal belongings. He has a separate building on his land that he keeps all of his tools inside of. Following a severe windstorm, a tree collided into a telephone pole, that crashed through his out-building, causing a fire that destroyed the building.
His insurance company covered his personal property in full based on the type of policy he had. It was destroyed by a covered peril. Regardless of the fact that his property was not located directly inside his main dwelling, it is covered.
When reviewing personal property with your agent it can be referred to as Coverage C.