Florida 2-20 General Lines Agent (Property, Casualty, Commercial Lines and Florida Law)Property InsuranceMedium
A client's Homeowners policy (HO-3) includes a scheduled personal property endorsement for their valuable jewelry. During a recent trip, a piece of this scheduled jewelry, valued at $10,000, was lost when it accidentally fell out of their bag. The HO-3 policy's standard limit for jewelry theft is $1,500. How much will the insurer pay for this loss, assuming no deductible applies to the endorsement?
- A$0
- B$8,500
- C$10,000
- D$1,500
Show answer & explanationAnswer & explanation
Correct answer: C. $10,000
A scheduled personal property endorsement provides 'all-risk' coverage for the listed items, typically without a deductible and often covers perils like mysterious disappearance or accidental loss, which would otherwise be excluded or subject to sub-limits under the standard HO-3 policy. Therefore, the full scheduled value of $10,000 would be paid.
Why the other options are wrong
- A. This is incorrect; the endorsement covers the loss.
- B. This calculation is incorrect and does not reflect the nature of scheduled personal property coverage.
- D. This would be the payout if the jewelry was not scheduled and the loss was due to theft, but the loss was accidental disappearance and the item was scheduled.
Scheduled Personal Property Endorsement
An endorsement added to a homeowners policy to provide broader coverage and higher limits for specific valuable items, usually on an 'all-risk' basis.
- Covers specific high-value items
- Often 'all-risk' coverage (open perils)
- Overrides standard policy sub-limits for those items
Memory trick: Endorsements add or modify, making the policy fit like a custom glove.