California Property & Casualty Broker-AgentProperty InsuranceMedium
A homeowner's HO-3 policy has a Coverage A (Dwelling) limit of $500,000. They have a valuable collection of antique stamps, appraised at $15,000. During a covered burglary, the entire stamp collection is stolen. Assuming no special endorsements, how much will the policy pay for the loss of the stamp collection, ignoring any deductible?
- A$10,000
- B$2,500
- C$15,000
- D$5,000
Show answer & explanationAnswer & explanation
Correct answer: B. $2,500
Standard HO-3 policies have special limits of liability for certain categories of personal property, including a $2,500 limit for theft of stamps, rare and current coins, and precious metals. Therefore, despite the collection being valued at $15,000, the policy will only pay up to the special limit of $2,500.
Why the other options are wrong
- A. This is not a standard special limit for stamps in an HO-3 policy.
- C. This would be the full appraised value, which is not paid due to special limits.
- D. This is a common limit for jewelry, watches, furs, and precious stones for theft, not stamps.
HO-3 Special Limits - Stamps
Standard HO-3 policies include special limits of liability for certain categories of personal property, such as a $2,500 limit for theft of stamps, rare and current coins, and precious metals.
- Applies to theft only for stamps/coins.
- Limits are per occurrence, not per item.
- Can be increased with scheduled personal property endorsement.
Memory trick: Remember '2.5K for Stamps & Coins' and '1.5K for Jewels & Furs'.