Under an HO-3 policy, coverage C-personal property applies to all of the following circumstances EXCEPT when?

Coverage C, which pertains to personal property, in an HO-3 policy typically provides protection for personal belongings against a variety of risks, including theft, accidental damage, and damage due to fire.

When examining the situation where ground water causes damage, this scenario falls into a category generally excluded from standard HO-3 coverage. Homeowners insurance typically does not cover damages resulting from flooding or water seepage, which includes instances where groundwater enters the home and leads to damage. This is primarily due to the nature of flooding as a peril that is often considered a separate coverage need, requiring a distinct flood insurance policy.

On the other hand, theft of items from the residence, accidental damage to personal belongings, and destruction caused by fire are all scenarios that would typically be covered under the personal property section of an HO-3 policy, as these incidents directly relate to the risks addressed within that coverage. Thus, ground water leading to damage would be the exception, aligning with the characteristics of the coverage provided by the HO-3 policy.