Florida 2-20 General Lines Agent (Property, Casualty, Commercial Lines and Florida Law)Property InsuranceHard
A client owns a valuable collection of rare stamps, appraised at $50,000. Their HO-3 Homeowners policy has a Coverage C limit of $150,000. The policy includes a special limit of liability for stamp collections of $1,500 for theft. To ensure the full appraised value is covered against all perils, what is the most appropriate action the client should take?
- AIncrease the overall Coverage C limit of their HO-3 policy.
- BPurchase a separate Personal Property Floater (Scheduled Personal Property Endorsement) for the stamp collection.
- CAssume the collection is fully covered under the HO-3, as long as the loss is not due to theft.
- DAdd an 'Increased Limits' endorsement to the HO-3 for the stamp collection.
Show answer & explanationAnswer & explanation
Correct answer: B. Purchase a separate Personal Property Floater (Scheduled Personal Property Endorsement) for the stamp collection.
A Personal Property Floater (also known as a Scheduled Personal Property Endorsement) is specifically designed to provide 'all-risk' (open perils) coverage for valuable items like stamp collections, often without a deductible and for their appraised value, overriding the HO-3's special limits and exclusions.
Why the other options are wrong
- A. Increasing Coverage C will not remove the special limits of liability for specific items like stamps.
- C. Even for non-theft losses, stamp collections might have other limitations or exclusions under a standard HO-3, and full appraised value is unlikely.
- D. While an 'Increased Limits' endorsement might exist for some categories, a Personal Property Floater is the most comprehensive solution for full appraised value and broader perils for unique, high-value items.
Personal Property Floater (Scheduled Personal Property)
An endorsement or separate policy that provides 'all-risk' coverage for specific, high-value personal property, often at an appraised value, overriding standard homeowners policy sublimits and exclusions.
- Provides broader coverage (open perils) than standard HO-3.
- Covers items at their appraised value, avoiding sublimits.
- Commonly used for jewelry, furs, art, coin/stamp collections, and musical instruments.
Memory trick: Special items need a 'schedule' to keep them truly valued and secure.