Property Insurance FundamentalsQuestion 156 of 158
An insured loses one chair from a matching set of six dining chairs. The pair-and-set clause means the insurer will pay:
a.Nothing, because the remaining five chairs are still functional
b.The full replacement cost of all six chairs because the matching set is destroyed
c.A fair proportion of the value of the entire set, reflecting the reduced value caused by the loss of one chair
d.The same amount as a total loss of the dining room furniture
Explanation
The pair-and-set clause requires the insurer to pay a fair PROPORTION of the value of the entire set. It does not pay for the set as a total loss and it does not ignore the diminished value of the remaining pieces. The goal is to indemnify — restore the insured to the same financial position before the loss — without enriching.
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