An insured owns a matched pair of antique candlesticks. One candlestick is destroyed by a covered peril. Under a typical pair-and-set clause, how is the loss settled?
a.The insurer pays only the salvage value of the destroyed piece, measured by what its broken remains would bring at auction
b.The insurer must pay the full value of the entire pair and the insured keeps the remaining piece, so a single broken candlestick entitles the owner to a check covering both candlesticks while the undamaged one stays on the mantel and never has to be turned over to the company
c.The insurer pays nothing because partial losses of pairs are excluded, so the owner recovers only if both candlesticks are destroyed in the same occurrence, and damage to one piece standing alone falls outside the policy entirely no matter which covered peril caused it
d.The insurer pays the difference between the value of the pair before the loss and the value of the remaining single piece after the loss, or may restore the pair, but it does not have to pay as though the entire pair were destroyed
Explanation
The pair-and-set clause prevents an insured from collecting as if a whole pair or set were destroyed when only one part is damaged. The insurer pays the reduction in value (the value of the pair before the loss minus the value of the remaining piece) or may restore the pair, but the loss is not treated as a total loss of the entire pair.
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