Property Insurance FundamentalsQuestion 147 of 474
Personal property such as jewelry, firearms, silverware, and currency is typically subject to:
a.Unlimited replacement cost coverage with no appraisal and no underwriting questions, since the HO-3 special limits apply only to loss by fire
b.Coverage only at the named insured's primary residence, with off-premises property capped at 10% of the Coverage C limit and jewelry excluded entirely away from home
c.A blanket exclusion that cannot be added back by endorsement
d.Special internal limits that may be raised by scheduling on a personal articles floater
Explanation
The HO and DP forms include SPECIAL LIMITS for theft of jewelry, firearms, silverware, currency, securities, and similar 'high-target' items. To insure for full value the insured should SCHEDULE the items on a personal articles floater (PAF) or inland marine endorsement, which lists each item with an appraised value.
Law Reference: ISO HO-3 special limitsThis topic, taught in full in the Personal Lines Insurance Producer guide. Personal Lines Insurance Producer — Complete Study Guide (2026) — PDF + EPUB, $19.99 · 14-day refund →
Practice all 474 questions free — no signup required.
Own the complete Personal Lines Insurance Producer guide — PDF + EPUB, $19.99 →
Related questions on this topic
- An insured and her insurer cannot agree on the amount of a fire loss, and one of them makes a written demand for appraisal. Under the appraisal clause of California's standard form fire policy (§2071), what happens next?
- A California homeowner asks whether his standard HO-3 policy covers damage caused by an earthquake. The CORRECT answer is:
- A homeowner's basement is destroyed when a nearby river overflows after several days of rain. The HO-3 policy will:
- An 18-year-old composition-shingle roof with a replacement cost of $24,000 is destroyed by hail. Depreciation is calculated at $14,000. If the policy settles this partial loss on an ACTUAL CASH VALUE basis (no replacement-cost endorsement), the insurer will pay (before deductible):
- Which statement BEST distinguishes replacement cost from actual cash value?
- Under most California homeowners policies that provide replacement-cost settlement on the dwelling, the insurer typically pays:
Last reviewed: · editorial process
PrepPass team · Verified against California Personal Lines Insurance License Exam · How we review