Property Insurance FundamentalsQuestion 147 of 158
Personal property such as jewelry, firearms, silverware, and currency is typically subject to:
a.Unlimited replacement cost coverage without any underwriting questions
b.Coverage only at the named insured's primary residence and never away from premises
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.
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Related questions on this topic
- Which peril is added by the BROAD FORM but is NOT part of the basic form perils?
- 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:
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