A set of four matched showroom chairs is worth $2,400 as a set. A covered peril destroys one chair, and the three that remain are worth $1,500 together. Under the pair or set clause, the insurer pays:
Explanation
The pair or set clause measures the difference between the value of the set before the loss and the value of what is left: $2,400 - $1,500 = $900. That captures the loss in value the survivors suffer from no longer being a set. Paying one quarter of the set value gives $600 and ignores that damage entirely, while the insured cannot force the insurer to pay the full $2,400 and take the three good chairs away.
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