Scheduling Personal Property for the Homeowners Insured

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SCHEDULING PERSONAL PROPERTY

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TABLE OF CONTENTS

SCHEDULING PERSONAL PROPERTY .................................................................................. 7

REASONS TO SCHEDULE ....................................................................................................... 9

PURPOSE ................................................................................................................................ 9 WHEN TO WRITE THE PAF ......................................................................................................10 NEEDS MET BY INLAND MARINE FLOATERS ...............................................................................10

Coverage for Property Limited by the Homeowners ..........................................................10 Coverage for Property Excluded by the Homeowners .......................................................11 Coverage for Property With Valuation Problems ...............................................................12 Property Particularly Susceptible to Loss by Other Than the Named Perils .......................12 High - Valued Property ......................................................................................................12

PERSONAL INLAND MARINE FLOATERS .............................................................................14

BACKGROUND ........................................................................................................................14 FILED VS. NON-FILED FORMS ...................................................................................................14 CHARACTERISTICS OF INLAND MARINE FLOATERS.....................................................................15

TYPES OF PERSONAL INLAND MARINE FLOATERS ..........................................................15

SCHEDULED PERSONAL PROPERTY ENDORSEMENTS ....................................................17

HO 04 60 10 00 .....................................................................................................................17 NEWLY ACQUIRED PROPERTY .........................................................................................18

NEWLY ACQUIRED PROPERTY OTHER THAN FINE ARTS ..........................................18 PERILS INSURED AGAINST ................................................................................................19

Coverage .......................................................................................................................20 EXCLUSIONS ...........................................................................................................................21

FINE ARTS ...................................................................................................................21 STAMP & COIN COLLECTIONS ...................................................................................21

TERRITORIAL LIMITS ..........................................................................................................22 CONDITIONS .......................................................................................................................23

Agreed Value Basis ...........................................................................................................23 Pair, Set, or Parts Clause ..................................................................................................23

HO 04 61 10 00 .....................................................................................................................24 Loss Clause...................................................................................................................27

LOSS SETTLEMENT .................................................................................................................28 Fine Arts ........................................................................................................................28 Postage Stamps or Rare and Current Coin Collections .................................................29

REPLACEMENT COST BASIS ....................................................................................................31 PAF BLANKET COVERAGE .......................................................................................................31

Blanket Stamp and Coin Collections..................................................................................32 Blanket Cameras, Musical Instruments, and Fine Arts ......................................................32

PERSONAL ARTICLES FLOATER POLICY ...........................................................................33

LIMITS OF INSURANCE – SCHEDULED PROPERTY ......................................................................33 PAF ELIGIBLE CLASSES OF PROPERTY ....................................................................................33 PERSONAL INLAND MARINE DECLARATIONS PAGE .......................................................34 SAMPLE PERSONAL INLAND MARINE DECLARATIONS ...................................................34


INLAND MARINE FLOATER POLICY PROVISIONS .........................................................................35 AGREEMENT .......................................................................................................................36 GENERAL CONDITIONS ............................................................................................................36

Conformity to State Law ....................................................................................................36 Concealment or Fraud .......................................................................................................37 Loss Settlement ................................................................................................................37 Loss to a Pair, Set or Parts ................................................................................................37 Loss Clause ......................................................................................................................38 Appraisal ...........................................................................................................................38 Your Duties After Loss ......................................................................................................39 Examination Under Oath ...................................................................................................39 Loss Payment ...................................................................................................................39 Suit Against Us ..................................................................................................................40 Claims Against Others .......................................................................................................40 Insurance Not To Benefit Others .......................................................................................40 Other Insurance ................................................................................................................40 Canceling the Policy ..........................................................................................................41 Changes in Policy..............................................................................................................41 Liberalization Clause .........................................................................................................41

GENERAL EXCLUSIONS .....................................................................................................41 LARGE SCHEDULE ENDORSEMENTS .........................................................................................42

DETAILS BY CLASS OF PROPERTY .....................................................................................43

PERSONAL JEWELRY AND FURS INSURANCE ...................................................................43

REASONS FOR SCHEDULING JEWELRY AND FURS .....................................................................43 EXCLUSIONS AND LIMITATIONS ................................................................................................44 IMPORTANT CONDITIONS .........................................................................................................44 NEWLY ACQUIRED PROPERTY .................................................................................................44 IN EVENT OF LOSS ..................................................................................................................44 POLICY ASSIGNMENT ..............................................................................................................45 ACTION AGAINST THE INSURER ................................................................................................45 PAIR AND SET CLAUSE ............................................................................................................45 JEWELRY IN VAULTS................................................................................................................45 RENEWALS .............................................................................................................................45 AGREED VALUE ......................................................................................................................46 ELIGIBILITY .............................................................................................................................46 FURS .....................................................................................................................................47

Coverage ..........................................................................................................................47

CAMERA INSURANCE ............................................................................................................48

EXCLUSIONS AND LIMITATIONS ................................................................................................49 SPECIAL CLAUSES AND CONDITIONS ........................................................................................50 IN EVENT OF LOSS ..................................................................................................................50

MUSICAL INSTRUMENTS INSURANCE .................................................................................51

Eligibility ............................................................................................................................51 PURPOSE ...............................................................................................................................51 COVERAGE .............................................................................................................................52 BROAD FORM ......................................................................................................................52

Newly Acquired Property ...................................................................................................53


Broad Form Exclusions .....................................................................................................53 LIMITED FORM.....................................................................................................................53

Limited Form Exclusions ...................................................................................................54 DEFINITIONS ...........................................................................................................................54

Professionals .....................................................................................................................54 Orchestras, bands and similar groups ...............................................................................54 Covered Instrument ...........................................................................................................55

IN EVENT OF LOSS ..............................................................................................................55 SPECIAL COVERAGE OPTIONS .................................................................................................55

Loss In Value ....................................................................................................................55 Temperature Coverage .....................................................................................................55 Claims-free credits ............................................................................................................55 Rental or Extra Expense Coverage ...................................................................................55

REQUIRED INFORMATION .................................................................................................55 Coverage ..........................................................................................................................56

SCHOOL OWNED INSTRUMENTS ......................................................................................56 RATE AND PREMIUM ..........................................................................................................57

Broad Form Policies ..........................................................................................................57 Limited Form Policies ........................................................................................................57

NON-MOBILE ORGANS .......................................................................................................57 SPECIALTY COVERAGE EXCLUSIONS ........................................................................................57

SILVERWARE INSURANCE ....................................................................................................58

NEED FOR COVERGE .........................................................................................................58 COVERAGE .............................................................................................................................59 EXCLUSIONS AND LIMITATIONS ................................................................................................59 PREMIUM .............................................................................................................................60

GOLFER’S EQUIPMENT FLOATER ........................................................................................60

Eligibility ............................................................................................................................60 COVERAGE ..........................................................................................................................60

FINE ARTS INSURANCE .........................................................................................................61

NEED FOR SPECIALIZED INSURANCE ..............................................................................61 ELIGIBILITY .............................................................................................................................62 COVERAGE .............................................................................................................................63 COVERAGE OPTIONS .........................................................................................................64 EXCLUSIONS AND LIMITATIONS ........................................................................................64 IMPORTANT PROVISIONS ..................................................................................................65 NEWLY ACQUIRED PROPERTY .........................................................................................66 BLANKET ITEMS ..................................................................................................................66 DEFINITIONS .......................................................................................................................66 IN EVENT OF LOSS ..............................................................................................................66 VALUATION ..........................................................................................................................67 RATE AND PREMIUM ..........................................................................................................67 ART AS INVESTMENT..........................................................................................................68 INVENTORY RECOMMENDED ....................................................................................................68

Limited Edition Collectibles ................................................................................................68 Memorabilia .......................................................................................................................68 Oriental Rugs ....................................................................................................................68


STAMP AND COIN COLLECTION INSURANCE .....................................................................69

TERMS ...................................................................................................................................69 COVERAGE .............................................................................................................................70

Postage Stamps ................................................................................................................70 Rare and Current Coins.....................................................................................................71

TERRITORY.............................................................................................................................71 EXCLUSIONS AND LIMITATIONS ................................................................................................71 SPECIAL CONDITIONS ..............................................................................................................72 BLANKET COVERAGE ..............................................................................................................73 REQUIRED OF INSURED ...........................................................................................................73

OTHER PERSONAL INLAND MARINE FLOATERS ...............................................................75

PERSONAL EFFECTS FLOATER (PEF) .................................................................................75

NEED FOR PERSONAL EFFECTS COVERAGE .............................................................................75 PEF VALUATION .....................................................................................................................76 PROPERTY COVERED ..............................................................................................................77 PERILS INSURED AGAINST AND LIMITATIONS .............................................................................77 STANDARD ENDORSEMENTS ....................................................................................................79

PERSONAL PROPERTY FLOATER (PPF) ..............................................................................81

Development of the Personal Property Floater ..................................................................81 PPF COVERED PROPERTY ......................................................................................................82

Money and Securities ........................................................................................................84 Unscheduled Jewelry, Watches, Furs ................................................................................84 Property Covered - Building Additions and Alterations ......................................................85 Covered Perils ...................................................................................................................85 PPF Exclusions .................................................................................................................86 Valuation ...........................................................................................................................88 When To Write the PPF.....................................................................................................89 Scope of Coverage ............................................................................................................89

PERILS INSURED AGAINST AND EXCLUSIONS ............................................................................90 Additional Coverage ..........................................................................................................90 Additional Living Expenses ................................................................................................90 Deductibles .......................................................................................................................90 Limit of Insurance ..............................................................................................................90 Other Insurance ................................................................................................................91 Other Provisions ................................................................................................................91 When to Schedule .............................................................................................................91

INDIVIDUAL ARTICLE FLOATERS .........................................................................................93

BICYCLE FLOATER ................................................................................................................94

INSURING AGREEMENT AND EXCLUSIONS .................................................................................94 CONDITIONS ...........................................................................................................................95

UNDERWRITING PERSONAL ARTICLES FLOATERS ..........................................................96

Eligibility And Information Requirements ...........................................................................96 UNDERWRITING JEWELRY ........................................................................................................96

Acceptability ......................................................................................................................98 Rate and Premium ............................................................................................................99


UNDERWRITING FURS .............................................................................................................99 UNDERWRITING CAMERAS .......................................................................................................99

How the equipment is used ............................................................................................. 100 The type of equipment ..................................................................................................... 100 The value of the equipment ............................................................................................. 100

UNDERWRITING MUSICAL INSTRUMENTS ................................................................................ 101 UNDERWRITING SILVERWARE ................................................................................................ 101 UNDERWRITING GOLF EQUIPMENT ......................................................................................... 101

Rate and Premium .......................................................................................................... 102 UNDERWRITING FINE ARTS .................................................................................................... 102

Stolen Artwork ............................................................................................................. 102 Reproductions ............................................................................................................. 103

STAMPS AND COINS .............................................................................................................. 103 Acceptability .................................................................................................................... 103 Underwriting Guidelines .................................................................................................. 103 Rate and Premium .......................................................................................................... 104

RESIDENTIAL SECURITY SYSTEMS ......................................................................................... 104 Assess Security ............................................................................................................... 105

Doors .......................................................................................................................... 105 Windows ...................................................................................................................... 105 Locks ........................................................................................................................... 105

Alarms ............................................................................................................................. 106 Underwriters Laboratories ........................................................................................... 106 Local Alarms................................................................................................................ 107 Central Station Alarms ................................................................................................. 107 Proprietary Alarms ....................................................................................................... 107 Police Connection ....................................................................................................... 108

INLAND MARINE APPRAISALS............................................................................................ 109

GENERAL APPRAISAL INFORMATION ....................................................................................... 109 JEWELRY APPRAISALS .......................................................................................................... 110 FUR APPRAISALS .................................................................................................................. 113 SILVERWARE APPRAISALS ..................................................................................................... 113 FINE ARTS APPRAISALS......................................................................................................... 114 ANTIQUE FURNITURE APPRAISALS ......................................................................................... 114 STAMP AND COIN APPRAISALS ............................................................................................... 114 CAMERA APPRAISALS ............................................................................................................ 115 FINDING A QUALIFIED APPRAISER .......................................................................................... 115

APPENDIX ............................................................................................................................. 117

HO 04 60 10 00 ................................................................................................................... 117 HO 04 61 10 00 ................................................................................................................... 120

INDEX .……………………………………………………..………………………………………… 125


Scheduling Personal Property

Coverage for most of the identified exposures of an individual or family can be provided under the homeowners or personal auto policy. The personal auto and homeowners policies were created to provide packages of coverage to meet the needs of most individuals and families. Coverage gaps in these two policies, however, might leave an insured's exposures unprotected by insurance. Policy exclusions eliminate coverage for exposures that are commercially uninsurable as well as those that most families do not encounter. Whenever a client wants to insure an exposure not covered by standard insurance packages, another type of insurance must be used to fill the gap. Producers should always point out coverage exclusions and limitations to their clients. In addition to providing clients with information necessary to understand the insurance purchased, this reduces the chance that the producer will be sued by their clients for E&O. It also increases commission income on the account. To provide insurance protection, not met by Homeowners coverage alone, the producer can use the following as tools:

Endorsements. Many homeowners endorsements are available to tailor an insurance policy to address an applicant's individual exposures. Attaching an endorsement to a policy is often the most economical method to add, delete, or modify coverage. Because endorsements modify coverage, they should be evaluated by an agent or producer to determine whether appropriate coverage is being provided for the insured, after carefully reviewing the risks and hazards involved.

Personal inland marine floaters. These policies provide insurance for personal property that is excluded or has limited coverage under other policies.

Specialty policies. These policies are specifically tailored to meet unique insurance needs. Many specialty policies are inland marine policies that have been modified to cover specific types of property exposures.

This course focuses on the advantages of scheduling items on the personal property endorsements HO 04 60, HO 04 61 or Personal Inland Marine policies.

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Coverage and rates are usually the same whether a personal articles floater policy or a scheduled personal property endorsement to the homeowners policy is used.

When written as an endorsement to the homeowners policy, the inland marine floater contains only those provisions necessary to add the desired coverage(s); it does not include general coverage clauses included in the homeowners policy.

When written as a separate policy, an inland marine floater contains both general provisions and provisions applicable only to the type of coverage being provided (such as a jewelry floater).

When coverage is provided using an endorsement to the HO policy, or an Inland Marine Floater, the coverage C exclusion of "articles separately described and specifically insured in this or any other insurance" must be taken into consideration when deciding on amounts of insurance in the endorsement. Since the coverage C amount will not contribute in case of loss to any property insured separately, it is important that each item be scheduled for an adequate amount of coverage. Other items in the household would then continue to have protection under coverage C. The 2000 program offers a new version of this endorsement: Scheduled Personal Property Endorsement (with agreed value loss settlement) HO 04 60. Endorsement HO 04 61 offers agreed value loss settlement only for fine arts, while the HO 04 60 offers agreed value loss settlement for all articles scheduled. An important change in the HO 04 61, and included in the new HO 04 60, is that the territorial restriction for fine arts to within the United States and Canada has been removed. Now worldwide coverage applies to all scheduled property.







Reasons to Schedule

Scheduling valuable personal items under a Homeowners Policy Scheduled Personal Property Endorsement or under a Personal Articles Floater Policy is important because it:

Provides proper limits of insurance for property subject to reduced limits of insurance under a Homeowners policy

Provides significantly broader coverage for valuable items that face special exposure to loss

Typically provides global coverage

Removes high value items from the Personal Property section of a homeowners policy, increasing the coverage for general personal property

Encourages the insured to maintain current appraisals and other valuation data for valuable items, minimizing settlement problems

Purpose

The Personal Articles Floater, whether as an endorsement or a separate policy, covers personal property against direct, physical causes of loss (aka “all-risk”). The property eligible for coverage is valuable property owned and used by the family, specifically:

Jewelry

Furs

Fine arts

Stamp collections

Silverware

Musical instruments

Cameras

Golf equipment

Coin collections These classes of property are those most frequently insured on a schedule. Scheduling allows property to be covered for its full value, based upon documentation such as a current appraisal or sales receipt. Separate protection is important as a supplement to Homeowners insurance


because the high values and exposures associated with these property classes result in severe coverage limitations in Homeowners policies for such property.

When To Write the PAF

It is often to an insured’s advantage to remove certain property from the unscheduled coverage available under the homeowners policy and to insure it on a scheduled basis, using a personal articles floater. The floater can also fill coverage gaps left by the homeowners policy. Scheduling property provides the following benefits to the insured:

No deductible clause applies to scheduled items.

Increased limits are available on the listed classes of property.

Loss by flood, surface waters, and subsurface waters is covered.

Scheduling property changes the perils to an extremely broad “all-risks” basis.

Scheduling fine arts provides coverage on a valued basis, which eliminates the problem of trying to place a value on a one-of-a-kind item after a loss occurs.

Needs Met by Inland Marine Floaters

The homeowners program is intended to address most non-automobile property (and liability) insurance needs of an average family. Homeowners policies restrict coverage for those personal property loss exposures faced by only a few insureds, since including coverage in all homeowners policies for loss exposures faced by only a few insureds would result in unfairly high premiums. These insureds can obtain the additional coverage needed through inland marine floaters that address the following:

Coverage for property limited by the homeowners

Coverage for property excluded by the homeowners

Coverage for property with valuation problems

Coverage for property particularly susceptible to loss by other than the usual named perils

Coverage for high-valued personal property

Inland marine floaters are extremely flexible, and can be used to cover both common and unusual exposures. Coverage for Property Limited by the Homeowners Homeowners policies contain dollar limitations for certain property for loss caused by all perils and for other property limits apply only for loss by theft.

These sub-limits on certain classes of expensive personal property in the homeowners exist because the policy is written and priced for the “average” exposure. Insureds who have items in excess of the limits in the policy present a risk greater than “average.”


The Insurance Services Office (ISO) form HO 00 03 (1991 edition) limits are:

Money, coins, gold and silver, $200;

Securities, $1,000;

Watercraft, $1,000;

Trailers, $1,000;

Theft of jewelry and furs, $1,000;

Theft of guns, $2,000;

Theft of silverware, $2,500;

Business property on the residence premises, $2,500;

Business property off the residence premises, and

Certain electronic devices, $1,000. The ISO homeowners 2000 program increases some limits as follows:

Securities, $1,500;

Watercraft, $1,500;

Trailers, $1,500;

Theft of jewelry and furs, $1,500;

Theft of firearms, $2,500; and

Certain electronic equipment to $1,500.

While the above sub-limits can vary by type of policy offered by different insurers, the maximum amounts are still very modest, resulting in poor protection for persons owning a significant amount of those types of property. The Coverage C Increased Special Limits of Liability Endorsement (ISO HO 04 65) may be used to provide additional amounts of coverage for valuable items, however it does not provide coverage for additional perils. Although the dollar amounts are increased, the scope of the coverage remains that of the underlying policy. Increasing the limit means that the total amount for loss is greater, but a per-item limit applies to the ISO form. Since the total amount of insurance coverage under C remains the same, increasing the special limits does not provide an additional amount of insurance in event of a loss to unscheduled personal property. It is important when discussing homeowners coverage with insureds, to ask about the existence of property that is subject to limited coverage under a basic (unendorsed) policy. The agent should explain the need to increase coverage for these classes of property, either by endorsement to the homeowners policy or by separate insurance policies. Coverage for Property Excluded by the Homeowners Articles described separately and specifically insured in this or other insurance are completely excluded from coverage under the homeowners polices when insured under inland marine forms. This clarifies the relationship between homeowners insurance and other coverage on personal property. When an article is specifically insured on an inland marine floater, or Personal Property Endorsement, that article no longer has coverage under the homeowners policy.


Since this is a policy exclusion, not an "other insurance” clause, it would be incorrect to insure a $2,500 ring for $1,500 in a jewelry floater, relying on the homeowners policy to provide the other $1,000 of coverage. Under the exclusion, the homeowners policy does not cover the ring at all if it is insured by endorsement to the homeowners or on a separate policy. Since the full value of the article must be insured in the floater, accurate and up-to-date appraisals are crucial. Coverage for Property With Valuation Problems Unendorsed homeowners policies provide coverage for unscheduled personal property valued at actual cash value. ISO endorsement HO 04 90, Personal Property Replacement Cost, provides replacement cost coverage for personal property. When this endorsement is attached to the homeowners policy, certain property that is scheduled also receives replacement cost coverage. Replacement coverage, up to the limit of insurance per item, applies to scheduled jewelry, furs, cameras, musical instruments, silverware, and golf equipment. Other scheduled property is valued per the wording of the endorsement. Even replacement cost valuation may not suit all types of property or situations. An inland marine floater written on an agreed value basis (HO 04 60) could help resolve this problem, since the insured and insurer agree on the value of the property, which then is the basis for payment of a covered claim. Property Particularly Susceptible to Loss by Other Than the Named Perils Many of these items -- because of their portable nature and use in many places -- are subject to losses not covered by the homeowners forms which can be covered by the "open perils" coverage provided by scheduling. For example, neither the ISO schedule HO 60, HO 61 or the Personal Article Floater exclude loss by flood or earthquake, but virtually all underlying homeowners policies do. If the only concern of the client is "all-risks" coverage, the Special Personal Property Coverage Endorsement (HO 00 15) may be attached to an HO 3, or the Unit-Owners Coverage C, Special Coverage (HO 17 31) Endorsement may be attached to the HO 6, or an HO 5 policy (equivalent to the HO 3 form with the HO 15 endorsement attached) may be available. Although the special personal property coverage endorsement (HO 00 15) in conjunction with an HO-3 form (or the HO-5) provides "all-risks" coverage on unscheduled personal property, the vast majority of homeowners policies provide personal property coverage on a named perils basis. High - Valued Property Homeowners policies typically provide coverage on personal property equal to 50 percent of the amount of insurance on the dwelling. For most families, this amount of coverage is sufficient, however there are cases in which the value of contents in a home exceeds this 50 percent limit. Even though the Coverage C limit can be increased, it is often considered more desirable to purchase specific coverage on these high-valued items by using an inland marine floater. The client's outside interests and hobbies, such as photography, sports, and collections which may call for additional insurance. Although these particular items are not limited by dollar amount in the basic policy, there may not be enough insurance to cover all of them plus the other unscheduled personal property in the home.


Because the homeowners policy deals with unscheduled personal property, other problems could result following a loss. When an insured owns unusual, high-valued items that have been stolen or completely destroyed, it is sometimes difficult to prove that these items actually existed or that they were as valuable as claimed. This loss would be easier to substantiate if the high-valued item were specifically described on a floater policy. Personal articles type insurance may be written in conjunction with a homeowners policy using homeowners scheduled personal property endorsement HO 04 61. The language of the insuring agreement in endorsement HO 04 61 corresponds to other homeowners open perils insuring agreements referring to "risks [not "all risks"] of direct loss to property described only if that loss is a physical loss to property." Like the homeowners policy, the personal articles coverage, despite its appearance simply as an endorsement attached to the homeowners policy, functions as a separate contract. The personal inland marine manual rules require that although the inland marine coverage may be provided in conjunction with the homeowners policy, the terms and conditions of the supplemental floater be the same as if the policy were separately issued. Careful thought should also be given to the insuring of personal property under a separate personal articles policy compared to insuring under the homeowners coverage C, written on a replacement cost basis. When property subject to depreciation is involved, an insured may be penalized in the event of loss by the actual cash value provisions of separate personal articles coverage. But if the personal articles coverage is provided by using endorsement HO 04 61, in conjunction with personal property replacement cost endorsement HO 04 90, scheduled articles other than those specifically excluded from the replacement cost coverage are covered for their replacement cost.

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PERSONAL INLAND MARINE FLOATERS

Background

Personal Inland Marine refers to forms that insure special classes of personal property having the following characteristics:

Is subject to little (or no) coverage under a homeowners policy

Has a very high value, especially in proportion to its size

Has a high vulnerability to loss or destruction, particularly by theft

Is likely to be the subject of fraudulent claims The Personal Articles Floater is a form of inland marine coverage, which is one of the insurance industry’s oldest forms of insurance. Inland Marine was derived from Ocean Marine insurance. Ocean Marine commonly covers perils faced by property traveling over bodies of water. Inland Marine policies are used to cover structures that facilitate land travel such as tunnels and bridges, as well as property in transit. The term “inland marine” is a term that dates back to the days of sailing ships, when ocean marine coverage was the most common form of insurance. With the development of the railroad and trucking industries, a need arose for insurance to cover cargo from the time the goods left the premises of the shipper until they arrived at the final destination. Marine insurers broadened their coverage to include land exposures. The policies that covered movable personal property on land were called personal inland marine floaters. A floater is an insurance policy designed to cover property that "floats" or moves, rather than remains at a fixed location. The first of these policies was the jewelry floater, which was written to include broad "all-risks” coverage, followed by the fur floater, fine arts floater, camera floater, and musical instrument floater. The most commonly used personal inland marine policy today is the Personal Articles Floater.

Filed vs. Non-filed Forms

Most classes of personal inland marine insurance are filed classes, which means that insurers (or rating bureaus that act on their behalf) are required to file forms and rates with the state regulators. Filed classes include cameras, fine arts, golf equipment, musical instruments,


personal furs, personal jewelry, silverware, and stamp and coin collections. Several classes can be scheduled under a single personal articles floater or can be insured individually under a floater covering only that class, such as a fine arts floater or a musical instruments floater. Many insurers also offer personal inland marine programs to cover non-filed classes of property. Examples of non-filed classes of personal inland marine insurance are home computers, recreational vehicles, guns, antique autos, and hobby collections. Agents should consult their company-underwriting manual to find out what is available.

Characteristics of Inland Marine Floaters

Inland marine floaters are designed to cover property that has special value or that is frequently moved from one location to another, including jewelry, furs, fine arts, silverware, cameras, stamp and coin collections, luggage, sports equipment, and musical instruments. Inland marine floater policies share the following general characteristics, which benefit the insured:

The insured can select the appropriate policy limits. With the inland marine floater, an insured can obtain higher limits for certain specific property.

Floaters are typically written for "all-risks" of direct physical loss or damage subject to policy exclusions and conditions.

Most floaters provide coverage anywhere in the world for the described property.

Inland marine floaters are usually written without a deductible.

Types of Personal Inland Marine Floaters

Although many personal inland marine exposures are covered under homeowners policies (often by attaching endorsements), several separate personal inland marine floaters are available to meet specific needs. The personal articles floater is the principal inland marine form for insuring the filed personal inland marine classes. The other two commonly used inland marine forms are the personal effects floater and the personal property floater. The coverage can also be tailored to the specific type of property to be insured, such as a jewelry floater, camera floater, or musical instruments floater.


Personal Articles Floater (PAF) The Personal Articles Floater (PAF) is the most commonly used inland marine policy. Identical coverage can be attached to the homeowners policy as an endorsement (HO 04 61 or HO 04 60) or written as a separate inland marine policy. Coverage is written, only for specific classes of property. Each class of property will be discussed separately in this course.

Personal Property Floater (PPF)

The Personal Property Floater (PPF) is designed to provide contents coverage for a residence. It has become less popular since the introduction of the homeowners policy. The PPF is still useful, however, for applicants who do not have homeowners policies or for applicants in temporary living arrangements.

Personal Effects Floater (PEF)

The Personal Effects Floater (PEF) is designed to protect property carried by travelers. Although such property is covered by a homeowners policy, the PEF would be appropriate for an applicant who does not have a homeowners policy or who has unique exposures involving property away from the residence.

Individual Article Floaters – Used to insure one category of personal property only. We will discuss each of these in detail in the following sections of this course.


Scheduled Personal Property Endorsements

Scheduled Personal Property Endorsements are now available in two standard forms in addition to many variations available from individual insurers. The newest of the ISO standard forms is the HO 04 60 which settles claims on virtually all property on an agreed value basis, as opposed to the HO 04 61 which settles losses on every type of property except fine arts on an ACV basis. This new form helps to meet the insured’s expectations that if a piece of jewelry, for instance, is insured for a certain amount, which is the amount they will receive if it is stolen or destroyed.

HO 04 60 10 00

HO 04 60 10 00

SCHEDULED PERSONAL PROPERTY ENDORSEMENT (WITH AGREED VALUE LOSS

SETTLEMENT) SCHEDULE*

We cover the classes of personal property which are indicated in the Schedule above by an amount of insurance. This coverage is subject to the: 1. Definitions; 2. Section I - Conditions; and 3. Sections I and II - Conditions; In the policy and all provisions of this endorsement. Any deductible stated in this policy does not apply to this coverage.


NEWLY ACQUIRED PROPERTY

An important benefit of scheduling is the automatic coverage for newly acquired items of jewelry, furs, cameras, musical instruments and fine arts. The insured must report new property to the insurance company within a certain number of days (refer to the specific type of property for the applicable number of days) and pay the additional premium from the date the new property was acquired.

A. Newly Acquired Property - Jewelry, Furs, Cameras And Musical Instruments Only 1. We cover newly acquired property of a class of property already insured. The lesser of the following limits applies: a. 25% of the amount of insurance for that class of property; or b. $10,000. 2. When you acquire new property you must: a. Report these objects to us within 30 days; and b. Pay the additional premium from the date acquired.

NEWLY ACQUIRED PROPERTY OTHER THAN FINE ARTS This limitation applies to:

Jewelry

Furs

Cameras

Musical instruments If a specific class of property is already scheduled, newly acquired property in the same class will be covered at the lesser of the following:

25% of the amount of insurance for that class of property, or

$10,000.

New acquisitions that fall into the above property classes must be reported to the insurer within 30 days. The property is added and any additional premium is calculated according to the day the property is acquired. The insurer may specify lower limits.


NEWLY ACQUIRED FINE ARTS

B. Newly Acquired Fine Arts When Fine Arts are scheduled, we cover objects of art acquired during the policy period for their actual cash value. However, we will pay no more than 25% of the amount of insurance for fine arts scheduled. For coverage to apply for newly acquired fine arts you must: 1. Report these objects to us within 90 days; and 2. Pay the additional premium from the date acquired.

When fine arts are scheduled, coverage applies to other objects of art that an insured acquires during the policy period. However, coverage is:

Usually settled according to the new property’s actual cash value,

Restricted to no more than 25% of the amount of insurance applicable to fine arts already scheduled,

Limited to property of the same class for which coverage already exists and,

Lost if the new property is not reported within a specified reporting period, typically as long as 90 days.

The additional premium an insured owes on the new fine art acquisition is computed pro rata from the date of purchase.

PERILS INSURED AGAINST

C. Perils Insured Against We insure against risks of direct loss to property described only if that loss is a physical loss to property; however, we do not insure loss caused by any of the following: 1. Wear and tear, gradual deterioration or inherent vice. 2. Insects or vermin. 3. War, including the following and any consequence of any of the following: a. Undeclared war, civil war, insurrection, rebellion or revolution; b. Warlike act by a military force or military personnel; or c. Destruction, seizure or use for a military purpose. Discharge of a nuclear weapon will be deemed a warlike act even if accidental.


4. Nuclear Hazard, to the extent set forth in the Nuclear Hazard Clause of Section I - Conditions. 5. If Fine Arts are covered: a. Repairing, restoration or retouching process; b. Breakage of art glass windows, glassware, statuary, marble, bric-a-brac, porcelains and similar fragile articles. We cover loss by breakage if caused by: (1) Fire or lightning; (2) Explosion, aircraft or collision; (3) Windstorm, earthquake or flood; (4) Malicious damage or theft; (5) Derailment or overturn of a conveyance. We do not insure loss, from any cause, to property on exhibition at fairgrounds or premises of national or international expositions unless the premises are covered by this policy. 6. If Postage Stamps or Rare and Current Coins collections are covered: a. Fading, creasing, denting, scratching, tearing or thinning; b. Transfer of colors, inherent defect, dampness, extremes of temperature, or depreciation; c. Being handled or worked on; d. The disappearance of individual stamps, coins or other articles unless the item is: (1) Described and scheduled with a specific amount of insurance; or (2) Mounted in a volume and the page it is attached to is also lost; or e. Shipping by mail other than registered mail. However, we do not insure loss, from any cause, to property in the custody of transportation companies or not part of a stamp or coin collection.

Coverage

The form insures property against all risks of direct physical loss except losses caused by excluded perils. This extremely broad coverage is applicable anywhere in the world for most insured items and is not subject to a deductible.


Exclusions

The scheduled (described) property is subject to a limited number of coverage limitations. The coverage does not insure against loss or damage caused by:

Wear and tear

Gradual deterioration

Insects or vermin

Inherent vice

Nuclear activity (reaction, radiation or contamination) whether loss is direct or indirect. However, direct loss by fire that results from nuclear activity is covered

War, including the following and any result of the following: o Undeclared war; o Civil war; o Insurrection; o Rebellion or revolution; o Warlike act by a military force or military personnel; or o Destruction, seizure or use for a military purpose. o Any weapon of war employing atomic fission or radioactive force

Nuclear hazard, to the extent set forth in the nuclear hazard clause of Section I – Conditions (Discharge of a nuclear weapon, regardless of the circumstances, is considered to be a warlike act, and it is not a covered loss.)

Additional exclusions apply to specific classes of property: FINE ARTS

Fine arts include works of art and items of rarity or historic value. If fine arts are insured, coverage does not apply to damage caused by repairing, restoration, or retouching. Losses to property exhibited at fair grounds or national or international expositions are not covered unless the exhibition premises are covered by the policy. Breakage of art glass objects, statuary, marble, bric-a-brac, porcelains, and similar fragile items is covered only when caused by fire, lightning, explosion, aircraft, collision, windstorm, earthquake, flood, malicious damage, theft, or derailment or overturn of a conveyance. All risk glass coverage may be available depending on the insurer. STAMP & COIN COLLECTIONS

There are some additional coverage restrictions faced by these property classes. Specifically, no protection is available for loss due to:

Fading

Creasing

Denting

Scratching

Tearing or thinning

Transfer of colors

Inherent defect


Dampness

Temperature extremes

Depreciation

Being handled or worked on

Disappearance of individual stamps, coins or other articles, unless the item is:

o Described and scheduled with a specific amount of insurance, or o Mounted in a volume, and the page it is attached to is also lost

Shipping by mail other than registered mail

Loss to property in the custody of transportation companies or

Property that is not part of a stamp or coin collection

TERRITORIAL LIMITS

D. Territorial Limits We cover the property described worldwide.

Under the latest version of this form, all property eligible for coverage, including fine arts, is protected worldwide. Under some insurer’s forms, fine arts are covered only while located in the United States, its territories or possessions, and Canada.

E. Special Provisions 1. Fine Arts: You agree that the covered property will be handled by competent packers. 2. Golfer's Equipment includes your other clothing while contained in a locker when you are playing golf. We cover golf balls for loss by fire or burglary provided there are visible marks of forcible entry into the building, room or locker. 3. Postage Stamps includes the following owned by or in the custody or control of the "insured": a. Due, envelope, official, revenue, match and medicine stamps; b. Covers, locals, reprints, essays, proofs and other philatelic property; or c. Books, pages and mounting of items in a. and b. 4. Rare and Current Coins includes the following owned by or in custody or control of the "insured": a. Medals, paper money, bank notes; b. Tokens of money and other numismatic property; or


c. Coin albums, containers, frames, cards and display cabinets in use with such collection.

Special provisions apply to four of the nine classes of personal articles: fine arts, golf equipment, postage stamps, rare and current coins; each of which will be analyzed in the individual class discussions later in this course. The remaining five classes: jewelry, furs, cameras, musical instruments, and silver ware; are not subject to these special provisions.

CONDITIONS

F. Conditions 1. Loss Settlement Covered property losses are settled as follows:

Agreed Value Basis

a. Agreed Value We will pay, for each article or property designated in the Schedule, the full amount shown in the Schedule which is agreed to be the value of that article or property. At our request, you will surrender that article or property to us if not lost or stolen.

Under the HO 04 60 endorsement, valuation is changed to “agreed value.” Agreed value means that in the event of loss or damage to the property, the insurance company agrees to pay the amount of insurance scheduled. The insured and the insurer agree on the value at the time the policy is written. Insurers may offer to endorse the Personal Articles Floater to provide Agreed Value coverage. Pair, Set, or Parts Clause

b. Pair, Set Or Parts If the scheduled article or property is a pair or set, or consists of several parts when complete, we will pay the full amount shown in the Schedule for that pair, set or complete article. At our request, you will surrender that article or property to us if not lost or stolen.

Pairs, sets, or parts are items with increased value because they are part of a group. The loss of part of the group greatly reduces the value of the items that remain. Losses are adjusted to take into consideration the economic loss to the whole group.


Covered property consisting of several parts presents a different problem. The policy agrees to pay for the value of the lost or damaged part. The insured is not entitled to receive payment for a total loss when only a part of an item is lost or damaged. Broad pair and set coverage may be added to the policy with respect to jewelry through the use of endorsement, which provides for recovery of the “full amount of the set as shown in the schedule” even if only one item is damaged or destroyed. The insured is then obligated to surrender the remainder of the items to the insurance company. Check with your companies to see what they offer.

2. Lost Or Stolen Articles In the event lost or stolen property is recovered and we have paid you the full amount shown in the Schedule for that property, you will surrender that property to us. 3. Buyback Of Surrendered Property We will, at your request, sell back to you, at a price you and we agree upon, any class of property or scheduled article you surrendered to us to comply with the terms in Paragraphs 1. or 2. above. 4. Premium Adjustment We will refund the unearned premium that applies to the scheduled article after the loss or you may apply it to the premium due for the replacement of that article.

Copyright, Insurance Services Office, Inc., 1999

If a scheduled item is lost or totally destroyed and a payment is made, the remaining limit is reduced by the value/payment of the lost item. Under this condition, any unearned premium will be refunded or, if the scheduled item is replaced, the unearned premium may be applied to the premium due for the replacement item.

HO 04 61 10 00

Most of the provisions on these two endorsements are virtually identical. The primary difference is that the HO 04 61 settles losses on an agreed value basis only on fine arts, while the HO 04 60 settles losses on all property on agreed value.


HO 04 61 10 00

SCHEDULED PERSONAL PROPERTY ENDORSEMENT SCHEDULE*

We cover the classes of personal property which are indicated in the Schedule above by an amount of insurance. This coverage is subject to the: 1. Definitions; 2. Section I - Conditions; and 3. Sections I and II - Conditions; in the policy and all provisions of this endorsement. Any deductible stated in this policy does not apply to this coverage. A. Newly Acquired Property - Jewelry, Furs, Cameras And Musical Instruments Only 1. We cover newly acquired property of a class of property already insured. The lesser of the following limits applies: a. 25% of the amount of insurance for that class of property; or b. $10,000. 2. When you acquire new property you must: a. Report these objects to us within 30 days; and b. Pay the additional premium from the date acquired. B. Newly Acquired Fine Arts When Fine Arts are scheduled, we cover objects of art acquired during the policy period for their actual cash value. However, we will pay no more than 25% of the amount of insurance for fine arts scheduled. For coverage to apply for newly acquired fine arts you must: 1. Report these objects to us within 90 days; and 2. Pay the additional premium from the date acquired. C. Perils Insured Against We insure against risks of direct loss to property described only if that loss is a physical loss to property; however, we do not insure loss caused by any of the following:


1. Wear and tear, gradual deterioration or inherent vice. 2. Insects or vermin. 3. War, including the following and any consequence of any of the following: a. Undeclared war, civil war, insurrection, rebellion or revolution; b. Warlike act by a military force or military personnel; or c. Destruction, seizure or use for a military purpose. Discharge of a nuclear weapon will be deemed a warlike act even if accidental. 4. Nuclear Hazard, to the extent set forth in the Nuclear Hazard Clause of Section I - Conditions. 5. If Fine Arts are covered: a. Repairing, restoration or retouching process; b. Breakage of art glass windows, glassware, statuary, marble, bric-a-brac, porcelains and similar fragile articles. We cover loss by breakage if caused by: (1) Fire or lightning; (2) Explosion, aircraft or collision; (3) Windstorm, earthquake or flood; (4) Malicious damage or theft; (5) Derailment or overturn of a conveyance. We do not insure loss, from any cause, to property on exhibition at fairgrounds or premises of national or international expositions unless the premises are covered by this policy. 6. If Postage Stamps or Rare and Current Coins collections are covered: a. Fading, creasing, denting, scratching, tearing or thinning; b. Transfer of colors, inherent defect, dampness, extremes of temperature, or depreciation; c. Being handled or worked on; d. The disappearance of individual stamps, coins or other articles unless the item is: (1) Described and scheduled with a specific amount of insurance; or (2) Mounted in a volume and the page it is attached to is also lost; or


e. Shipping by mail other than registered mail. However, we do not insure loss, from any cause, to property in the custody of transportation companies or not part of a stamp or coin collection. D. Territorial Limits We cover the property described worldwide. E. Special Provisions 1. Fine Arts: You agree that the covered property will be handled by competent packers. 2. Golfer's Equipment includes your other clothing while contained in a locker when you are playing golf. We cover golf balls for loss by fire or burglary provided there are visible marks of forcible entry into the building, room or locker. 3. Postage Stamps includes the following owned by or in the custody or control of the "insured": a. Due, envelope, official, revenue, match and medicine stamps; b. Covers, locals, reprints, essays, proofs and other philatelic property; or c. Books, pages and mounting of items in a. and b. 4. Rare and Current Coins includes the following owned by or in custody or control of the "insured": a. Medals, paper money, bank notes; b. Tokens of money and other numismatic property; or c. Coin albums, containers, frames, cards and display cabinets in use with such collection. F. Conditions 1. Loss Clause The amount of insurance under this endorsement will not be reduced except for a total loss of a scheduled article. We will refund the unearned premium applicable to such article after the loss or you may apply it to the premium due for the replacement of the scheduled article.

Loss Clause The amount of insurance under this endorsement will not be reduced, except for a total loss of a scheduled article.

2. Loss Settlement


Covered property losses are settled as follows: a. Fine Arts (1) We will pay, for each article designated in the Schedule, the full amount shown in the Schedule which is agreed to be the value of that article or property. At our request, you will surrender that article or property to us if not lost or stolen. (2) If the scheduled article or property is a pair or set, or consists of several parts when complete, we will pay the full amount shown in the Schedule for that pair, set or complete article. At our request, you will surrender that article or property to us if not lost or stolen. (3) In the event lost or stolen property is recovered and we have paid you the full amount shown in the Schedule for that property, you will surrender that property to us. (4) We will, at your request, sell back to you, at a price you and we agree upon, any class of property or scheduled article you surrendered to us to comply with the terms in (1), (2) or (3) above. b. POSTAGE STAMPS OR RARE AND CURRENT COIN COLLECTION IN CASE OF LOSS TO ANY SCHEDULED ITEM, THE AMOUNT TO BE PAID WILL BE DETERMINED IN ACCORDANCE WITH PARAGRAPH 2.c. OTHER PROPERTY. WHEN COINS OR STAMPS ARE COVERED ON A BLANKET BASIS, WE WILL PAY THE CASH MARKET VALUE AT TIME OF LOSS BUT NOT MORE THAN $1,000 ON ANY UNSCHEDULED COIN COLLECTION NOR MORE THAN $250 FOR ANY ONE STAMP, COIN OR INDIVIDUAL ARTICLE OR ANY ONE PAIR, STRIP, BLOCK, SERIES SHEET, COVER, FRAME OR CARD. WE WILL NOT PAY A GREATER PROPORTION OF ANY LOSS ON BLANKET PROPERTY THAN THE AMOUNT INSURED ON BLANKET PROPERTY BEARS TO THE CASH MARKET VALUE AT TIME OF LOSS.

Loss Settlement

Under this form, losses involving different classes of property are settled in different ways. Each class is described below: Fine Arts

Because of the unique characteristics and condition of items that are rare, historic, or artistic, replacing those items following a loss is difficult or impossible. That is especially true for antiques and one-of-a-kind items. Since establishing a value after a loss for such items is so difficult, fine arts are traditionally written on an agreed value basis. The insurance company will pay the amount shown on this endorsement for each scheduled article. That amount is agreed to be the value of the article.


In case of loss to a pair or set, the insurance company will pay the full amount of the set as shown in the schedule, and the insured agrees to surrender the remaining article or articles of the set to the insurance company. Recovered items are the property of the insurer (once the loss has been settled). The insured has the option to contact the insurer about buying the recovered item back. The two parties will work out the value of the item and proceed with the sale. Postage Stamps or Rare and Current Coin Collections

Stamp and coin collections may be covered on either a blanket or scheduled basis. In case of loss to any scheduled item, the amount to be paid has to be determined after such property has been lost or damaged. The settlement will pay no more than the least of the following amounts:

The actual cash value of the property at the time of loss or damage

The amount for which the property could reasonably be expected to be repaired to its condition immediately prior to the loss

The amount for which the article could reasonably be expected to be replaced with one substantially identical to the article lost or damaged, or

The amount of insurance However, when coverage is on a blanket basis, the insurer will pay the cash market value at time of loss, but not more than:

$1,000 on any unscheduled coin collection

$250 for any one stamp, coin or individual article or any one pair, strip, block, series sheet, cover, frame or card.

Another restriction is that the company will not pay a greater proportion of any loss on blanket property than the amount insured on blanket property bears to the cash market value at the time of loss. This limitation protects insurers in instances that an insured “blankets” property valuable enough to have been separately scheduled as well as in instances when the aggregate property substantially appreciates in value.

c. OTHER PROPERTY (1) THE VALUE OF THE PROPERTY INSURED IS NOT AGREED UPON BUT WILL BE ASCERTAINED AT THE TIME OF LOSS OR DAMAGE. WE WILL NOT PAY MORE THAN THE LEAST OF THE FOLLOWING AMOUNTS: (a) THE ACTUAL CASH VALUE OF THE PROPERTY AT THE TIME OF LOSS OR DAMAGE; (b) THE AMOUNT FOR WHICH THE PROPERTY COULD REASONABLY BE EXPECTED TO BE REPAIRED TO ITS CONDITION IMMEDIATELY PRIOR TO LOSS;


(c) THE AMOUNT FOR WHICH THE ARTICLE COULD REASONABLY BE EXPECTED TO BE REPLACED WITH ONE SUBSTANTIALLY IDENTICAL TO THE ARTICLE LOST OR DAMAGED; OR (d) THE AMOUNT OF INSURANCE. (2) THE ACTUAL CASH VALUE CONDITION IN PARAGRAPH (1)(a) ABOVE DOES NOT APPLY IF, AT THE TIME OF LOSS, COVERAGE C - PERSONAL PROPERTY COVERED IN THE POLICY TO WHICH THIS ENDORSEMENT IS ATTACHED IS SUBJECT TO REPLACEMENT COST LOSS SETTLEMENT. 3. PAIR, SET OR PARTS OTHER THAN FINE ARTS a. LOSS TO A PAIR OR SET IN CASE OF A LOSS TO A PAIR OR SET WE MAY ELECT TO: (1) REPAIR OR REPLACE ANY PART TO RESTORE THE PAIR OR SET TO ITS VALUE BEFORE THE LOSS; OR (2) PAY THE DIFFERENCE BETWEEN ACTUAL CASH VALUE OF THE PROPERTY BEFORE AND AFTER THE LOSS. b. PARTS IN CASE OF A LOSS TO ANY PART OF COVERED PROPERTY, CONSISTING OF SEVERAL PARTS WHEN COMPLETE, WE WILL PAY FOR THE VALUE OF THE PART LOST OR DAMAGED.


Other Property Property values are determined at time of loss or damage rather than upon any agreed value. Except with respect to fine arts, special provisions apply to loss to a pair, set, or parts. When loss occurs to a pair or set, the insurer has the option of repairing or replacing any part to restore the pair or set to its value before the loss. The insurer may, as an alternative, pay the difference between the actual cash value of the property before and after the loss. If loss occurs to any part of covered property consisting of several parts, the insurer will pay the value of the damaged or lost parts. Even when an individual item is specifically scheduled, a company can opt to replace the item with one of similar quality. The insurer must obtain a complete and accurate description of each scheduled item. Descriptions (and serial numbers if possible) aid in recovering stolen items. Complete descriptions also allow a company adjuster to exercise the settlement option of replacing an item. Much of the property commonly insured by means of the personal articles form -- jewelry, cameras, silverware – can be replaced by insurance companies at a discounted price. Insurers


frequently offer replacement of the lost or damaged property rather than a cash payment. For an insured who rejects the replacement offer, cash recovery could still very well be limited to "the amount for which [the insured] could reasonably be expected to replace the article" if that replacement amount is the lesser amount. Since an amount of insurance is stated for each scheduled item in the policy, many people believe that the amount shown in the schedule will be paid in the event of a loss. The loss settlement provision of the personal articles floater, stipulates that value of the property insured is not agreed upon but will be ascertained at the time of loss or damage."

Replacement Cost Basis

The HO 04 61 contains the same valuation clause as the freestanding Personal Articles Floater. However, the valuation clause of HO 04 61 is amended if the Personal Property Replacement Cost Endorsement (HO 04 90) is also attached to the homeowners policy. The HO 04 90 provides replacement cost coverage on property insured under Coverage C of the homeowners policy. The replacement cost extends to property within the classes of jewelry, furs, cameras, musical instruments, silverware, and golf equipment that is covered under the Scheduled Personal Property Endorsement attached to the same policy. For a loss to this covered property, the insurer pays the least of the following five amounts:

1. Replacement cost at the time of loss without deduction for depreciation 2. The full cost of repairs at the time of loss 3. The limit of liability that applies to Coverage C 4. Any special limit of liability stated in the policy 5. The amount of insurance listed for any scheduled item

When both the HO 04 90 and the HO 04 61 endorsements are attached to a homeowners policy, the result is that the settlement amount is changed from ACV to replacement cost for property within the classes of jewelry, furs, cameras, musical equipment, silverware, and golf equipment. This provides somewhat broader coverage under the endorsement than the separate Personal Articles Floater. The HO 04 60, which applies valued basis would still be preferable if available.

PAF Blanket Coverage

The alternative to scheduling individual items is to write coverage on a blanket basis, when an amount of insurance provided for the total class of property being insured, without specifically describing and showing an amount of insurance for each item. Silverware and golf equipment are the only filed classes of property that can be written on a blanket basis under the personal articles floater. A limited amount of blanket coverage can be written for the following classes:

Stamp and coin collections

Cameras, musical instruments, and fine arts


Blanket Stamp and Coin Collections The policy can be issued with a limit of up to $1,000 of blanket coverage on unscheduled numismatic or philatelic property, and a limit of $250 on any one unscheduled stamp or coin or other individual article. Numismatic items are paper money and coin collectibles. Philatelic items are postage stamp collectibles. Blanket Cameras, Musical Instruments, and Fine Arts Blanket coverage can be written up to 10 percent of the amount of scheduled coverage for the individual property class. A 100 percent coinsurance clause applies to the blanket items. Under homeowners policies, personal property (Coverage C) excludes coverage for "articles separately described and specifically insured in that or other insurance." That exclusion prevents the unscheduled personal property coverage from being used as an excess coverage for scheduled personal property. However, this exclusion does not apply to coverage on property insured on a blanket basis under the personal articles floater.


Personal Articles Floater Policy

The Personal Articles Floater (PAF) is the basic form used to insure certain classes of personal property on an itemized and scheduled basis. Coverage for all nine categories of the PAF is similar to coverage available through the scheduled personal property endorsement (HO 04 61). This policy was introduced in 1953 to allow various classes of property to be insured on a scheduled “all-risks” basis under a single policy instead of under multiple floaters. The Personal Articles Floater is written most frequently to protect the insured for gaps found in the homeowners policy because of the following:

Coverage limits

Limited perils

Difficultly in valuation of an item after a loss

Limits of Insurance – Scheduled Property

A limit of insurance must be inserted in order to trigger coverage for a class of property. The limit shown, however, is not an agreed value for the property, with the exception of fine arts property, which is scheduled as agreed values. The amount an insurer pays for a claim is based on the valuation clause. The limits shown in the schedule define the maximum amount of insurance available for a class of property. Some insurers may offer a form or endorsement to change coverage to agreed value on other classes of property.

PAF Eligible Classes of Property

The Personal Articles Floater (PAF) can provide coverage on nine different classes of personal property:

1. Jewelry 2. Furs 3. Cameras 4. Musical Instruments 5. Silverware and goldware 6. Golf equipment 7. Fine arts 8. Stamp collections 9. Coin collections


Each item must be shown in the “schedule” (list) on the policy. Coverage for items in each of the PAF classes applies only when an amount of insurance and premium for that class is shown on the floater. A complete application, showing all types of property to be insured with a proper description and value for each item scheduled, is required. The premium for scheduled property is based on the insured’s representation that the property is located at the specific address shown on the form. It is a particular underwriting concern when scheduled property is kept at a location that differs from the home address. The reason for having a separate location may be a practical one, such as a secure fur storage location or property being kept in a bank vault. However, the need for a different location may also be due to situations that are more hazardous, such as other ownership interests, or a use for the property that disqualifies it for coverage.

PERSONAL INLAND MARINE DECLARATIONS PAGE

Typically, information regarding scheduled personal property coverage appears on endorsements to homeowner policies. However, insurers that offer separate coverage will typically develop their own Personal Floater (Inland Marine) Declarations to meet their particular needs. The most common items on an inland marine floater Declarations include:

The name and address of the insurer, with or without a company logo

Policy number

Name and mailing address of the agency

Name and mailing address of the insured

Policy period including effective and expiration date with month, day and year, as well as time of day

Address of another location where property may be stored

Individual item or class of property limits of insurance

Valuation of each item (replacement cost or actual cash value)

Rates for coverages, where required by state

Optional coverage selected for each item

List of forms and endorsements that apply to the personal inland marine coverage

Total personal inland marine coverage premium The Personal Inland Marine Declarations may divide the necessary information into two parts; the first being the property classes and premiums if applicable, the second being supplemental information, such as separate property schedules/itemized list.

SAMPLE PERSONAL INLAND MARINE DECLARATIONS

INSURER NAME INSURER LOGO INSURER ADDRESS POLICY NUMBER: XXXXXXXXXX Type of Policy (New/Renewal) Type of Billing (Annual, monthly, etc.)


POLICY PERIOD: FROM XX-XX-XX TO XX-XX-XX AT 12:01 A.M. AT THE INSURED’S MAILING ADDRESS INSURED NAME AGENCY NAME INSURED MAILING ADDRESS AGENCY MAILING ADDRESS AGENCY PHONE NUMBER AGENCY CODE THE DESCRIBED LOCATION (if different from the insured’s mailing address) LOCATION ADDRESS OF ANY LOCATION WHERE PROPERTY MAY BE STORED Location #1: Location #2: Location #3: IF Applicable, Dates property is stored: _________ to __________ Property Description and Premiums Limits Premiums Property Type/Class A xxxxx xxxxx Property Type/Class B xxxxx xxxxx Property Type/Class C xxxxx xxxxx Property Type/Class D xxxxx xxxxx Property Type/Class E xxxxx xxxxx Forms and Endorsements Applicable to this Coverage: (All those that apply to policy) AA XX XX XX, BB XX XX XX CC XX XX XX In return for your payment of the premium, and subject to all of the terms of this policy, we agree with you to provide insurance as stated in this policy. TOTAL PERSONAL INLAND MARINE PREMIUM: $ __________ Countersigned by ______________________________________________________ Authorized Representative Authorized Company Officer These declarations together with the coverage form(s), policy conditions, forms and endorsements, if any, issued to form a part therefore, complete the above numbered policy.

Inland Marine Floater Policy Provisions

Form IPL 01 01 sets forth the insuring agreement, the general conditions, and the general exclusions that are used with all personal inland marine coverage forms. The insuring agreement promises to “provide the insurance described in this policy,” which is all risks of direct physical loss, subject to the exclusions and conditions found in the policy.


The inland marine floater form, in conjunction with the personal articles floater covers listed personal property of the insured, or a member of the insured’s family living in the same household. It may also be written on property owned jointly by persons who are not related but who reside together. It may be issued to an executor or administrator of a decedent’s estate to cover estate property. The following provisions commonly appear in inland marine floater policies. Each floater also contains other conditions and exclusions that apply specifically to the particular coverage provided.

AGREEMENT

The floater policy agreement is similar to the general agreement of other easy-to-read policies:

We will provide the insurance described in this policy in return for the premium and compliance with all applicable provisions of this policy.

Persons Insured Covered persons are generally the named insured and members of the insured’s family living in the same household.

Throughout this policy, "you" and "your" refer to the "named insured" shown in the policy and "we", "us" and "our" refer to the company providing this insurance. In addition, the word "insured" means you, your spouse and relatives of either whom are residents of your household.

General Conditions

Many conditions appear in an inland marine floater covering personal property. The most important inland marine conditions are discussed below. Conditions 1. and 2. are also found in other policies such as the general provisions of the PAP and need no special explanation. Other conditions in inland marine policies are similar to those in other property policies, including suit against the insurer, appraisal, and cancellation. Conformity to State Law

1. Conformity to State Law. When any policy provision is in conflict with the applicable law of the State in which this policy is issued, the law of the State shall apply.


Concealment or Fraud

2. Concealment or Fraud. We do not provide coverage for any insured that has intentionally concealed or misrepresented any material fact or circumstance relating to this insurance.

Loss Settlement

3. Loss Settlement. Unless otherwise stated in this policy, the value of the property insured is not agreed upon but shall be ascertained at the time of loss or damage. We will not pay more than the least of the following amounts: (a) The actual cash value of the property at the time of loss or damage; (b) The amount for which the property could reasonably be expected to be repaired to its condition immediately prior to loss or damage; (c) The amount for which the article could reasonably be expected to be replaced with one substantially identical to the article lost or damaged; or (d) The applicable amount of insurance.

With certain exceptions, such as fine arts, the amount paid for a covered loss is the least of the four following amounts:

1. The actual cash value of the insured property at the time of loss or damage 2. The amount for which the insured could reasonably be expected to have the property

repaired to its condition immediately prior to loss 3. The amount for which the insured could reasonably be expected to replace the property

with property substantially identical to the article lost or damaged 4. The amount of insurance stated in the policy

The insurer must be “reasonable” in establishing a repair or replacement cost figure. This loss settlement provision applies to all kinds of property insured in an inland marine floater, unless a special valuation provision applies, as is the case with some kinds of property. Loss to a Pair, Set or Parts

4. Loss to a Pair, Set or Parts (a) Pair or Set. In case of a loss to a pair or set we may elect to: (1) Repair or replace any part to restore the pair or set to its value before the loss; or (2) Pay the difference between actual cash value of the property before and after the loss. (b) Parts. In case of a loss to any part of covered property, consisting of several parts when complete, we shall pay for the value of the part lost or damaged.


Inland marine floaters are often used to insure items that come in pairs, sets, or parts. In the event of loss or damage to an item in a pair or set, the amount paid is not based on a total loss of the value of the pair or set. The insurer may elect to do either of the following:

1. Repair or replace any part to restore the pair or set to its original value before the loss 2. Pay the difference between the actual cash value of the property before the loss and the

actual cash value of the remaining piece or pieces after the loss The insured may receive more than 50 percent of the value of a pair when one part is lost. Loss Clause

5. Loss Clause. The amount of insurance under this policy shall not be reduced except for a total loss of scheduled article. We will refund the unearned premium applicable to such article after the loss or you may apply it to the premium due for the replacement of the scheduled article.

The loss clause determines if insurance on an item continues after a loss: A scheduled article is one that is insured on a particular policy. The amount of insurance is not reduced in case of partial loss to a scheduled article since it is assumed that the property will be repaired or otherwise restored. However, should a total loss occur to a specifically listed and scheduled article, the amount of insurance is automatically reduced by the limit on that article. The insurer refunds unearned premium for that article, or the insured can apply the unearned premium to the premium due if the scheduled article is replaced. Appraisal

6. Appraisal. If you and we fail to agree on the amount of loss, either one can demand that the amount of the loss be set by appraisal. If either makes a written demand for appraisal, each shall select a competent, independent appraiser and notify the other of the appraiser's identity within 20 days of receipt of the written demand. The two appraisers shall then select a competent, impartial umpire. If the two appraisers are unable to agree upon an umpire within 15 days, you or we can ask a judge of a court of record in the state of your residence to select an umpire. The appraisers shall then set the amount of the loss. If the appraisers submit a written report of an agreement to us, the amount agreed upon shall be the amount of the loss. If the appraisers fail to agree within a reasonable time, they shall submit their differences to the umpire. Written agreement signed by any two of these three shall see the amount of the loss. Each appraiser shall be paid by the party selecting that appraiser. Other expenses of the appraiser and the compensation of the umpire shall be paid equally by you and us.

If there is a disagreement as to the amount of the loss, an appraisal procedure is described.


Your Duties After Loss

7. Your Duties After Loss. In case of a loss to which this insurance may apply, you shall see that the following duties are performed: (a) Protection of Property -- Protect the property from further loss and take all steps possible to minimize the loss. If expenses are incurred in doing so, they shall be borne by you and us proportionate to our respective interests. (b) Notice of Loss -- Report as soon as practicable in writing to us or our authorized representative any loss or damage which may become a claim under this policy. (c) Proof of Loss -- File with us, or our authorized representative, a detailed proof of loss signed and sworn by you setting forth to the best of your knowledge and belief the facts of the loss and the amount thereof within 90 days after discovery of the loss.

The insured is required to report any loss as soon as practicable in writing and to file a sworn proof of loss within 90 days after discovery of the loss. The insured is also required to cooperate with the company in the settlement of claims. Examination Under Oath

8. Examination Under Oath. You agree: (a) to be examined under oath; (b) that employees, members of your household or others will be produced for examination under oath to the extent that it is within your power to do so; (c) to produce, if requested, the remains of the insured property; and (d) to produce such records as we may need to verify the claim and its amount; and to permit copies of such records to be made if needed.

Coverage is void if the insured has intentionally concealed or misrepresented any material fact concerning the insurance or its subject. Whether the fraudulent act occurs when the floater is written or when a claim is presented, fraud will void the policy. Loss Payment

9. Loss Payment. Unless a claim has been paid by others, we will pay any loss covered under this policy within 60 days after we reach agreement with you, entry of a final judgment, or the filing of an appraisal award with us.

Valid claims must be paid within 60 days after agreement is reached with the insured, or after a court judgement is entered or an appraisal award if filed with the insurer.


Suit Against Us

10. Suit Against Us. No action shall be brought unless there has been compliance with the policy provisions and the action is started within one year after the occurrence causing loss or damage.

If both parties comply with the policy provisions, but the insured is unsatisfied with the loss settlement, the insured can sue the insurer provided the action is brought within one year. Claims Against Others

11. Claim Against Others. In the event of loss, which we believe may be collectible from others, we may pay in the form of a loan to be repaid out of any recoveries from others. You will cooperate in every way possible to assist in such recovery from others and we shall, at our expense, take over your rights against others to the extent of our payment.

This provision is basically a subrogation clause. The insurer has the right to seek reimbursement for its loss payment to the insured from the person or parties responsible. The insured is expected to cooperate with the company in its attempt to recover payment from those responsible for the loss. Insurance Not To Benefit Others

12. Insurance Not To Benefit Others. No person or organization having custody of the property and to be paid for services shall benefit from this insurance.

The “no benefit to bailee” provision has been renamed “insurance not to benefit others.” It specifies that anyone who has custody of the property insured, and is being paid for their services, will not benefit from this coverage. The insurer’s right of subrogation against the negligent party is preserved. Other Insurance

13. Other Insurance. If at the time of loss or damage there is available any other insurance which would apply to the property in the absence of this policy, the insurance under this policy shall apply only as excess insurance over the other insurance.

The insurance provided by the floater policy is considered excess insurance over any other valid and collectible insurance, which applies to the property at the time of loss.


Canceling the Policy

14. Canceling the Policy. (a) You may cancel this policy by returning it to us or our authorized representative or by advising us or our authorized representative in writing stating the future date you want it to be cancelled. (b) We may cancel this policy by written notice to you at the address shown in this policy or last known address. The cancellation will be effective as of the date shown on the Cancellation Notice, but not less than ten (10) days after mailing to the address in this policy or last known address. The mailing of notice is sufficient proof of notice of cancellation. Delivery of notice shall be equivalent to mailing. (c) When you request cancellation, the return premium will be based on our short rate procedure. When we cancel, the return premium will be pro rata.

Changes in Policy

15. Changes in Policy. No change in this policy may be made except by us in writing.

Liberalization Clause

16. Liberalization Clause. If we adopt any revision, which would broaden the coverage under this policy without additional premium within 60 days prior to or during the policy period, the broadened coverage will immediately apply to this policy.

GENERAL EXCLUSIONS

Perils Excluded

We do not cover loss caused directly or indirectly by any of the following. Such loss is excluded regardless of any other cause or event contributing concurrently or in any sequence to the loss. 1. War, including undeclared war, civil war, insurrection, rebellion, revolution, warlike act by a military force or military personnel, destruction or seizure or use for a military purpose, and including any consequence of any of these. Discharge of a nuclear weapon shall be deemed a warlike act even if accidental. 2. Nuclear Hazard meaning any nuclear reaction, radiation or radioactive contamination, all whether controlled or uncontrolled or however caused, or any consequence of any of these.


(a) Loss caused by the nuclear hazard shall not be considered loss caused by fire, explosion, or smoke, whether these perils are specifically named in or otherwise included within the Perils Insured Against [and Limitations] (b) This policy does not apply to loss caused directly or indirectly by nuclear hazard, except that direct loss by fire resulting from the nuclear hazard is covered.

The inland marine floater policy excludes coverage only for loss caused by the following perils:

Wear and tear, gradual deterioration, or inherent vice

Insects or vermin

Mechanical or electrical breakdown or failure

War and warlike actions

Nuclear hazard Other exclusions, which apply specifically to the type of coverage being provided, will be discussed in the next section.

Large Schedule Endorsements

When the number of items to be insured under the camera, fine arts, musical instrument, or stamp and coin class would result in a very long schedule, one of the following endorsements may be attached to the personal inland marine floater: IPA 06 11 or IPA 06 12. The former endorsement can be used by individuals, and the latter by companies that have personal articles at risk.


Details By Class of Property

In this section, the special provisions and exclusions in the personal articles form relating to individual classes of property are discussed.

Personal Jewelry and Furs Insurance

Because of the susceptibility to theft and “mysterious disappearance,” the premium to insure jewelry can be substantial, however, there are definite benefits in scheduling; the most important of which is open perils coverage.

Reasons for Scheduling Jewelry and Furs

Homeowners often think that coverage for jewelry and furs is included in their HO policy. The actual coverage available under a typical homeowner policy however, is extremely limited. Scheduled coverage often includes protection against losses that are unique to fur and jewelry. Limited coverage is available for newly acquired jewelry or furs. Scheduled coverage on specific items increases the amount of protection available for unscheduled personal property on the HO policy, increasing an insured’s overall insurance protection.


Jewelry and Fur insurance may be provided under:

A separate personal floater

The Personal Articles Floater, or

A Scheduled Personal Property endorsement (HO 04 61) to a Homeowners policy Any of these coverage options can be used to cover scheduled personal jewelry or furs belonging to the insured or members of his or her family. Property is covered while located anywhere in the world.

Exclusions and Limitations

The policy does not insure against loss or damage caused by:

Wear and tear


Insects

Vermin, or

Inherent vice (a condition within the nature of the property that causes it to deteriorate)

Important Conditions

The personal inland marine floater policy may be written for persons who are not related only when they reside together and are co-owners of the property to be insured. For engagement rings, wedding rings, and guard rings only, policies may be issued in the name of the two parties having an insurable interest in the property. In the event of loss, settlement would be based upon each of their share of interest.

Newly Acquired Property

The policy covers newly acquired property provided the insured reports the newly acquired property to the company within 30 days after its acquisition and pays an additional premium. The amount of protection for newly acquired furs or jewelry is limited to 25% of the amount of insurance (for that class of property) or $10,000, whichever is less. It is extremely important that insureds report and pay for additional property as soon as possible. This coverage does not extend past the policy period.

In Event of Loss

The insured must report, as soon as practical, every loss or damage that may become a claim under the policy. Within 90 days from the date of loss, an insured must also file a detailed sworn proof of loss. Failure by the insured to follow this procedure may invalidate a claim under the policy. All adjusted claims must be paid within 30 days after a sufficient proof of loss is filed and accepted by the insurance company.


Policy Assignment

The insurer may require the insured to assign all rights of recovery (subrogation) against any party for loss or damage to the extent that payment is made by the company.

Action Against the Insurer

Any suit, action, or proceeding for the recovery of any claim under the policy must be initiated within 12 months of the date the insured discovers the occurrence that creates the claim. If the laws of the state where the policy is issued render this limitation invalid, however, any such actions are void unless such action, suit or proceeding is initiated within the shortest limit of time permitted by that state’s laws.

Pair and Set Clause

The insurer has the right to repair or replace any part to restore the pair or set to its value before the loss, or to pay the difference between actual cash value before and after the loss. The insurer is not obligated to pay the value of the entire pair or set. For jewelry items only: for an additional premium (on a per $100 or per $1,000 basis) on the total amount of insurance, this optional endorsement pays the full amount of insurance shown in the schedule in the event of a total loss of any article or articles that are part of a pair or set. The insured agrees to relinquish the remaining article or articles of the set to the insurer.

Jewelry in Vaults

Specific items of jewelry kept in the vault of a specified bank or non-bank security facility may be covered by endorsement at a reduced premium. If any item is removed from the vault, the policy ceases to cover that item unless the insured notifies the company in advance. Typically, the regular jewelry rate is paid during the time the jewelry is outside of the vault. Specific items of the jewelry schedule may be insured for a reduced premium if the policy is endorsed (JF 10 12) and they will be kept in a bank vault in a non-bank security facility acceptable to the insurer. The endorsement states that coverage on those articles ceases if the company is not given advance notice of removal from the scheduled premises. The insured must also pay an additional premium for the time the articles are out of the vault.

Renewals

Jewelry values generally rise over time and the amount of insurance on policies should be adjusted accordingly. The new value should be set by competent jewelers with the expertise to appraise jewelry. If jewelry has not been appraised recently for insurance purposes, it should be done and insurance revised accordingly.


Agreed Value

A bill of sale or jeweler’s or furrier’s appraisal is the basis for proper valuation. In the event of a loss, the insured will not necessarily be given the amount listed on the schedule. The company has the option to pay the least of the following: the actual cash value at the time of the loss, the amount it would cost to repair or replace the item, or the amount of insurance on the item. Coverage is also offered on an agreed value basis, subject to the limit of insurance on the schedule and is not subject to deduction or depreciation. Clients may be tempted to schedule jewelry for less than the appraisal amount, so as not to pay premium on something they will not recover. However, this is unwise, because if the insurer cannot replace the jewelry the amount paid will be the amount of insurance. The better option is to write jewelry on an agreed value basis.

Eligibility

Jewelry is the most commonly insured item on personal articles floaters, and diamonds are the most frequently covered valuable stones. The highest premium volume in any of the classes eligible for personal inland marine coverage is in the jewelry class. Jewelry items eligible for coverage include articles of personal adornment that are composed in whole or part of silver, gold, platinum or other precious metals and alloys, whether or not containing pearls, jewels, precious or semi-precious stones. Most companies prefer not to include items valued at less than $100. Pens, pencils, flasks, smoking equipment, cigarette cases, trophies, and similar items may also be insured as jewelry. However, this category does not include silver, silverware, plated ware, bullion, gold, and other precious metals or unmounted gems. Property of this type must be included under the rules and rates for silverware, discussed later. All jewelry items must be individually scheduled, since the personal articles floater does not allow blanket coverage. Each article must be completely described and a specified amount of insurance shown for each. For watches the form must show the kind, style, material, and movement numbers. Each necklace and other strand should be described by the number of stones of which it is composed and precious stones should be described by weight or size, color or luster, and the type of setting or mounting. Most jewelry losses tend to be total losses. The most common losses are theft, mysterious disappearance, loss, and the cracking or chipping of a stone. Claims commonly involve items forgotten in a public restroom, lost in the plumbing, accidentally thrown away, or dropped into the garbage disposal. Jewelry losses tend to peak just before the Christmas season.


Furs

Personal furs, including imitation furs, garments trimmed with fur or consisting principally of fur, and fur rugs may be insured under the Personal Articles form. This includes all furs that have been fashioned into coats, hats, gloves, or garments. Each insured article must be listed separately with a specified amount of insurance applying to it. An ensemble, such as a coat, muff and hat, may be scheduled as a single item. No miscellaneous items may be covered on a blanket basis. Coverage It is relatively common practice to settle losses involving furs on the basis of the amount of insurance applying to the particular item, if the value was substantiated by a reliable appraisal when the contract was written. Depreciation is customarily applied to losses during the second or third year, and this should be explained carefully to the insured when the policy is written. Under this endorsement, the insured agrees that a specified percentage of depreciation will apply on each anniversary date of the policy. No additional exclusions or limitations affect fur coverage. Since furs are susceptible to loss by wear and tear, gradual deterioration, vermin, and insects, clients should be advised that coverage does not apply to such losses. Companies writing insurance customarily reduce the amount of insurance applicable to a scheduled item under a renewal policy of 10 percent per year. Sometimes factors act to reduce the normal degree of depreciation, such as an upward trend in the price of furs. This would contribute to reducing the effect of depreciation. A new appraisal is usually the basis for the amount of insurance under a renewal policy. Newly acquired furs are covered for 25% of the amount for that class of property already insured, or $10,000, whichever is less. The insured must notify the company within 30 days of acquisition, and pay the additional premium from date property was acquired. An important peril for furs is theft. Furs are normally stored during warm weather, which tends to reduce the exposure. A new covered exposure has recently surfaced for vandalism by animal rights activists; spray painting the garment and the wearer. Because of this, the popularity and value of furs have dropped substantially in the U.S.


Camera Insurance

Under either the Personal Articles Floater or the Scheduled Property endorsement, coverage is available for cameras, accessories and similar equipment for personal use. As with other high-valued property, the need for special coverage is typically due to the limited coverage provided by most homeowner policies. Under the homeowner policy, property would only be protected against causes of loss, such as:

Fire

Lightning

Windstorm/hail

Smoke

Vandalism

Theft (with various restrictions)

Falling Objects

Weight of Ice, Snow or Sleet

Accidental discharge

Other sources of loss, including volcanic action Coverage for items in this class is not limited or excluded by homeowners policies, however, cameras and related equipment are especially susceptible to perils, such as breakage, which are not covered on the HO policy. Although cameras are not limited by the homeowners policy, their value can quickly amount to a large exposure for some insureds. In the event of a large loss, the camera collection might use up much of the limit of coverage C, leaving little for other personal property. The Camera Floater is a personal lines Inland Marine form used to insure photographic equipment against loss or destruction on an open perils basis. The cause of loss is covered UNLESS it is specifically excluded from coverage. Cameras and their lenses are fragile items and subject to breakage. Even if the insured has purchased open perils on contents (by using ISO endorsement HO 00 15 with an HO 3 or the HO 5 form), breakage is still excluded. Breakage of cameras is covered however, when scheduling them, as well as loss resulting from flood and earthquake, which are also covered under homeowners forms.


Coverage Coverage is broad, including losses such as accidentally dropping a camera overboard. Scheduled coverage for cameras only applies to scheduled items. An item is covered only if a detailed description of the property appears on the policy. The policy applies to property of the insured or property of others in the custody or control of the insured while located anywhere in the world. Traditionally, items eligible for coverage under this class of property include the following:

Cameras

Projection machines and accessories (such as screens and tables or stands)

Lighting equipment

Carrying/storage cases

Motion picture equipment, including sound, recording and playback accessories

Home video cameras

Playback recorders

Related equipment

Miscellaneous property o Film o Binoculars o Telescopes o Microscopes used in conjunction with cameras or photographic equipment

Today, all of the items used in an insured’s camera hobby for handling, processing and storing digitized photographs could be considered photographic accessories, eligible for scheduled protection. Property that could be considered camera equipment includes video cassette recorders, video players, camcorders, DVDs, digital cameras, special batteries, battery chargers, AC adapters, memory cards and readers, and so on.


Property not covered:

Television cameras and equipment

Coin or token operated devices

Cameras or related property for the benefit of dealers or manufacturers

Aerial cameras or radar cameras It is more appropriate for such property to be covered by commercial camera insurance since it faces exposures which are not contemplated by a personal property floater (or endorsement).


Perils excluded:

Wear and tear


Insects

Vermin

Inherent vice

Special Clauses and Conditions

Parts and Sets Under the policy, any loss valuation involving damage to article or articles, which are part of a set, will be a reasonable and fair proportion of the total value of the set. Loss settlement will include consideration of the importance of the article or articles, but in no event is such loss or damage considered to be a total loss of the set. Loss or damage to property that is a part or a component to property that consists of several parts, is covered only for the part or component and not the entire value of the property. Blanket Items Individual items must be scheduled with an appropriate amount of insurance shown for each item. Blanket coverage can be written for miscellaneous items, as long as the amount does not exceed 10 percent of the total amount of scheduled coverage. The blanket coverage amount is used to cover low-valued equipment, such as lens covers, filters, carrying cases, tripods, and film. Manual rules permit the use of one of the large schedule endorsements when insuring property in the camera class. Additional Acquired Property Newly acquired cameras and equipment are covered for 25% of the amount of insurance for that class of property or $10,000, whichever is less. The insured must report the new items within 30 days of acquiring them, and pay the premium from the date of acquisition.

In Event of Loss

The insured must quickly report claims involving scheduled cameras and related property, and must also give the insurer a detailed sworn proof of loss within 90 days from date of loss. If he or she fails to do so on time, the insured could lose coverage for the loss. Once a loss has been reported and the insured has proven the extent of the loss as well as his or her insurable interest in the lost or damaged property, the insurer has a maximum of 60 days to settle the loss. If another party is legally liable for causing the loss, the insurer may ask the insured to assign their rights to the company, to allow the insurer to pursue reimbursement from the other party.


In event of a covered loss, settlement is the least of the following:

Actual cash value at the time of the loss

The amount of repair or replacement

The amount of insurance.

Musical Instruments Insurance

Eligibility The policy may be used to cover individuals; orchestra, bands, chamber music ensembles, and similar groups; and schools, boards of education and municipalities. When the policy is written for a musical organization, it is not required that insured instruments be owned by the organization itself. A specific provision in the rules allows policies to include instruments owned by individual members of the organization. Such policies may be written only for a formally organized performing group by stipulating that groups with no closer bond than membership in the same union, management by the same booking agent, attendance at the same school, etc., are not eligible risks. Musical instruments, sheet music, and equipment pertaining to musical instruments may be insured under the personal articles form against all risks of physical loss on a worldwide basis. Many households own musical instruments of various kinds and values, which can usually be protected on their homeowners insurance; however, other people have high value instruments which need specialized coverage. Musical instruments are not limited or excluded by the homeowners policies, however, they are susceptible to damage by perils not generally covered. However, many instruments represent a significant investment and are quite important to their musician owners. Such clients need extra protection.

Purpose

The insured is typically required to provide full information about any income for public performances using the insured instruments during the policy term. A policy covering musical instruments would have to be endorsed to remove the exclusion for paid performances.


Coverage

A musical Instruments floater may be written to cover instruments (cornets, drums, trumpets, flutes, saxophones) of all types, excluding household instruments not customarily moved from the insured’s premises. An important coverage limitation exists for large organs that are immobile fixtures. Loss or damage caused by mechanical or electrical breakdown and failure, or repairing, adjusting, servicing or maintenance operations are not covered. However, if a fire or explosion ensues from any of the prohibited sources of loss, the policy would cover the ensuing fire and/or explosion damage. Coverage for musical instruments is usually provided on a scheduled basis with limits reflecting either replacement cost or, for higher valued, older instruments, agreed value. It often makes sense to provide some portion of coverage on a blanket basis to handle more numerous and lesser-valued musical property such as:

Sheet music

Bows

Picks

Strings

Instrument cases

Metronomes

Sticks, mallets

Drum accessories

Miscellaneous percussion

Music stands

Tuning Equipment

Valve guards

Extra mouthpieces

Repair kits

Flex brushes

Mutes, etc. The musical instrument coverage can be written as broad form (IMI 11 01) or limited form (IMI 11 02). The Floater may be written as part of a Personal Articles Floater or on a Scheduled Personal Property endorsement attached to the Homeowners policy. Coverage applies while the insured property is located anywhere in the world.

BROAD FORM

The Broad Form Musical Instruments floater covers individually itemized articles, with agreed valuation applicable to each. The protection is against direct physical loss or damage except for causes of loss that are specifically excluded. The Broad Form is designed principally to cover expensive instruments such as valuable violins, violas, cellos, and harps owned by reputable private individuals and professional artists.


It is possible to include one or more specifically described blanket item equaling not more than 10% of the total amount of insurance on scheduled items. The option to use blanket protection is especially useful in connection with sheet music and equipment related to musical instruments. The same rates apply as those used for scheduled property. Newly Acquired Property There is coverage for newly acquired property, the lesser of 25% of the amount already scheduled for musical instruments, or $10,000. Usually, an insured is given 30 days to report new acquisitions, however, the reporting period may be as long as 90 days. The policyholder must pay the additional premium, calculated from the day the property was acquired. Broad Form Exclusions The following are excluded under the Broad Form Musical Instruments floater:

Loss or damage caused by: o Wear and tear, o Gradual deterioration, o Insects, vermin, or, o Inherent vice.

Loss or damage while the insured receives income for playing the covered instrument IF the premium was not charged for professional exposure.

Coverage on musical instruments under the personal articles form excludes instruments played for remuneration unless appropriate higher rates are paid. Rather than an exclusion, professional use of an insured instrument results in the policy being voided. The exact provision states that the insured agrees not to perform with any of the insured instruments for pay unless such performance is specifically provided for in the policy. This provision may be deleted for bands, orchestras, other similar musical groups, school boards, and municipalities; and for individuals paying professional rates. The exclusion of instruments played for remuneration, etc., does not only apply to professional musicians. The provision applies to an instrument played for remuneration at any time during the policy period, including by amateur musicians who play occasionally for pay. In order to be properly covered, these instruments need to be rated for professional use.

LIMITED FORM

A Limited Form Musical Instruments floater covers individually scheduled (described) articles, with an agreed valuation applicable to each. The primary purpose of the limited form is to provide coverage on instruments of standard manufacture owned by private individuals or groups for use in churches, educational institutions, fraternal and glee club bands, drum corps, orchestras, or just for their own enjoyment.


Coverage is usually provided on a specified peril basis, covering hazards such as:

Fire

Lightning

Wind

Flood

Theft (except from unattended vehicles)

Collision

Other transportation perils It is also possible to include one or more specifically described blanket items totaling not more than 10% of the insurance on scheduled items. Limited Form Exclusions The following situations are ineligible for coverage under the Limited Form Musical Instruments floater:

Loss or damage to the property while left unattended in or on any automobile unless in the custody of a common carrier,

Loss or damage while he insured receives income for playing the covered instrument IF the premium was not charged for professional exposure.

Under either form, there is no coverage for damage resulting from intended use such as broken strings, bows, sticks, drum or conga heads, etc.

Definitions

Professionals Under Musical Instruments forms, professionals are persons who teach or receive any compensation for playing musical instruments insured during the policy term. A professional refers to a person who is compensated for playing a COVERED instrument. The policy clause related to professional use of instruments may be deleted from policies covering:

Individuals, when written at the professional rates,

Bands, orchestras, chamber music ensembles, and similar groups, and

Boards of education, or municipalities. Orchestras, bands and similar groups Formally organized groups of musicians who perform as musical units before the public at regular or frequent intervals. Instruments owned by bona fide members of such organizations are covered. A combination of individuals or bands controlled by booking agents, unions, associations, sales organizations, professional musical schools, or similar organizations, however, cannot be rated as a single risk.


Covered Instrument Typically refers to the instrument or instruments specifically described in the policy, as well as an instrument that is borrowed or is a substitute for a covered instrument, due to maintenance or repairs.

IN EVENT OF LOSS

Loss procedure follows the one found in the basic Scheduled Property Floater policy to which the Musical Instrument floater form is attached.

Special Coverage Options

Loss In Value When a covered instrument is damaged, an insurer has the option to replace, repair, or pay a cash sum to settle the loss. Temperature Coverage

Some insurers offer an option to protect against direct damage caused by extremes in temperature. Many instruments are quite sensitive and fragile, particularly those made of wood. Claims-free credits Some insurers allow premium credits for loss-free experience. Rental or Extra Expense Coverage Protection may be available for the cost of acquiring a temporary, substitute instrument.

REQUIRED INFORMATION

The following information is typically required to write a Musical instruments floater:

Name and address of insured

Effective date and term of policy

Amount of insurance

Complete description of instruments to be insured, including (when possible): o Manufacturer o Make o Model o Serial number

Receipts (acceptable for new instruments)

An appraisal by a reputable dealer (recommended on instruments involving more than $300 value)

o Amount of insurance applicable to each item must be stated


Business and approximate age of insured o If insured plays for remuneration, extent of such playing, its nature and

approximate related income,

Past loss experience and whether any company has declined or canceled similar insurance

Coverage Each instrument must be individually scheduled on the personal articles floater with an amount of coverage. Blanket coverage, available for musical instruments for up to 10 percent of the total amount insured on scheduled items, is useful for sheet music, carrying cases, reeds, strings, music stands, and amplifying equipment the insurer may increase the 10 percent limit. Except for those items insured on a blanket basis, the schedule should include complete descriptions of the instruments covered, including serial numbers whenever possible. It is usually desirable to obtain bills of sale or appraisals on instruments valued at $1,000 or more.

SCHOOL OWNED INSTRUMENTS

School-owned musical instruments may be insured by schools, boards of education, or municipalities on a blanket basis. Blanket coverage is limited however, and is subject to the following (or similar) clause, which eliminates the policy clause regarding additional property acquired by an insured:

“The company shall not be liable for a greater proportion of any loss of or damage to the property covered hereunder than the amount insured under this policy bears to 100% of the aggregate value (as determined by the Valuation clause contained in this policy) of said property at all places where coverage is afforded herein at the time such loss shall occur.”

This wording protects an insurer from a policyholder (organization) who:

Fails to properly assess the true value of the instrument inventory,

Has a growing instrumental music program but overlooks adjusting the insurance limits as more instruments are purchased,

Overlooked the value of some instruments when the blanket insurance limit was originally determined


RATE AND PREMIUM

Broad Form Policies Premiums for broad coverage typically use annual rates, such as .35 per $100 of insured value. Programs are also subject to minimum premiums that range from $50 to $250 annually. A much lower minimum may apply to coverage provided as an endorsement to a homeowner policy. Limited Form Policies Premiums for limited coverage forms are typically determined by discounting broad form rates by some amount such as 10%.

NON-MOBILE ORGANS

A non-mobile musical organ is a unique musical instrument exposure. Non-mobile organs represent a structural and territorial exposure to loss. Only the Broad Form policy may be used to cover this class of property. An additional exclusion applies to “non-mobile” organs: no coverage is provided for loss or damage caused by mechanical or electrical breakdown or failure or by repairing, adjusting, servicing, or maintenance operations unless fire or explosion ensues and then only for the loss or damage caused by such ensuing fire or explosion.

Specialty Coverage Exclusions

Many insurers offer special, very broad coverage for musical instruments. Typical hazards that are excluded from musical instrument coverage are:

Irradiation or nuclear activity,

War, warlike acts,

Confiscation of property due to Nationalization (a commercial exposure),

Property that is contraband or part of any illegal trade or activity,

Riots, civil commotion,

Earthquake or volcanic activity,

Theft by persons to whom covered property was entrusted,

Climatic extremes,

Breakdown of transistorized components (in electronic equipment or instruments).


Silverware Insurance

NEED FOR COVERGE

Under the typical Homeowners policy, there is a special limit of $2,500 for “loss by theft of silverware, silver-plated ware, gold ware, gold-plated ware and pewter ware. The limitation applies only to theft. The value of “silverware” has risen sharply in recent years. Insureds who own significant amounts of silver items should be encouraged to update their property inventory and determine if additional coverage is appropriate. Some insureds with Homeowners policies will be properly covered with the limited, “built-in” policy coverage. In order to obtain sufficient coverage however, an endorsement or “all risks” coverage form may be required to increase the special limit. The necessary insurance amount should be determined by current sales receipts or qualified appraisals. It is important to remember that if separate coverage is purchased, it replaces any coverage available under the homeowner policy. The separate coverage amount should reflect the full value of silverware since it is no longer included in the limit provided under the homeowners. Many clients are unaware of policy limitations that create a special coverage need. Many people have numerous items of silver that they use only on special occasions and have not recognized the value of these items. Increases in silver and gold values might leave many homeowners underinsured. Eligibility Silverware includes both “silver plate” and “flatware.” Silver plate is an item with a “plating of silver”. It can also be “domestic flatware and hollowware of silver or of a silver-plated base metal.” Flatware is tableware that is usually formed or cast in a single piece. “Silverware”, typically refers to all of the following:

Silverware

Silver-plated ware

Gold ware

Gold-plated ware

Pewter ware

Platinum ware


Coverage

As with other classes of property insured under this policy, this is all risks coverage on a worldwide basis. It is not always practical to schedule each item of property in this class, so the protection may be written on a blanket basis. Personal property identified as “silverware” may be insured under a Personal Articles Floater policy on an “all risks” basis. Individual articles may be itemized subject to a stated amount of insurance or agreed valuation, or written on a blanket basis. Certain types of property are not eligible for coverage under the silverware classification since they are insurable as jewelry. Pens, pencils, flasks, smoking implements, and articles of personal adornment are in this category. Silverware is not one of the classes of property which automatically cover additionally acquired property. Any newly acquired property in this class must be specifically added to the policy if coverage is desired. Scheduled articles must be individually itemized subject to applicable amounts of insurance or agreed valuations. Coverage applies while items are anywhere in the world. There is no Coinsurance clause in the Personal Articles Floater Policy, or in the Scheduled Personal property endorsement under a Homeowners policy. It is usually more convenient and practical to write “silverware” coverage on a blanket amount of insurance, while the scheduled basis is more appropriate for individual objects of high value. In either case, insurance should be based on bills of sale and/or appraisals.

No special exclusions or limitations affect silverware coverage. The exposure to loss of silverware is much less than that of jewelry. Silverware is used almost exclusively in the home, while jewelry is worn in various places and is subject to various perils. Determining the value of silver is not difficult. For patterns still being manufactured, the client can obtain a current price list, which most companies will accept as a form of valuation. For patterns that are no longer being manufactured, clients can have them appraised, or obtain a price list from a silver replacement company. Antique silver pieces other than silverware, should be appraised by a competent appraisal service.

Exclusions And Limitations

The policy does not cover loss or damage caused by:

Wear and tear,

Gradual deterioration,

Insects,

Vermin, or

Inherent vice


PREMIUM

Rates are identical for insuring “silverware” on a blanket basis, or scheduling it with an amount of insurance applicable to each described item. Rates typically are quoted on an annual, per $100 rate.

Golfer’s Equipment Floater

An avid golfer may have clubs and equipment worth thousands of dollars. These items are often away from the home and in places that may not be very secure, such as on a golf cart, in the car, or in a locker room. Although the exposure is not excluded by homeowners policies, it is often desirable to purchase specific “all-risks" coverage with no deductible. Eligibility The newly acquired property clause does not apply to golfer’s equipment, so new items must be reported to the insurer immediately for coverage to apply. Insurance on golfer’s equipment covers golf clubs, golf clothing and golf equipment belonging to the named insured. It also covers other clothing belonging to the insured while it is kept in any locker situated in a clubhouse or other building used in connection with golfing. Golf balls are covered for loss by fire or burglary, as long as there are visible marks of forcible entry into the building, room or locker. In order to qualify for coverage, there must be evidence that a person broke into a covered location, and that balls were taken from within a building.

COVERAGE

This coverage protects the named insured for the loss of golfing related property and equipment. Insurance protection is provided against any source of direct physical loss (except those excluded) when written under a Personal Articles Floater policy or under a Scheduled Personal Property Endorsement attached to a Homeowners policy, to increase the limits and widen the scope of coverage. The policy insures against all risks of physical loss to the insured property located anywhere in the world, on either a scheduled or a blanket basis.


By scheduling golf equipment, the insured obtains open perils coverage, including coverage for mysterious disappearance and accidental breakage. As with other scheduled items, the insured golf clubs are not subject to a deductible.

Fine Arts Insurance

NEED FOR SPECIALIZED INSURANCE

Paintings are included in the Unscheduled Personal Property coverage of a Homeowners policy. There are no special limits of coverage such as there are on money, jewelry, furs, and boats. Paintings are insured against the perils named in a Broad Form Homeowners policy in the same manner as furniture or clothing. The problem is that the limit of insurance under the homeowners coverage may not be sufficient for all property, including art objects, lost in a serious fire. Also, paintings and other objects of art are subject to risks of a special nature which may not be covered either named peril or special form HO policies. Fine Arts insurance provides protection against direct physical loss on the widest available coverage basis for owners of paintings, etchings, pictures, tapestries, art glass windows, and other works of art (such as valuable rugs, statuary, marble, bronzes, antique furniture, rare books, antique silver, manuscripts, porcelains, rare glass, and bric-a-brac) of rarity, historical value, or artistic merit. Items are scheduled using detailed descriptions. Their limits of insurance are based upon bills of sale or appraisals. Although coverage for fine arts is not excluded by the homeowners provisions, it is often desirable to provide broader coverage than allowed by the named perils of the homeowners. Some items may be eligible for coverage as fine arts under the PAF. In such cases, the insured should consider whether he or she wants actual cash value or valued coverage. A genuine Stradivarius violin should be insured as fine arts. An ordinary violin should be insured as a musical instrument. An old fiddle is probably adequately covered by the homeowners policy. There are several advantages to scheduling fine arts. First, losses are adjusted on an agreed value basis. In the event of a total loss, the amount to be paid will be the amount of insurance written on that particular item.


Second, breakage, which is excluded by both the homeowners policy and the personal property form, may be included if the insured agrees to pay a higher rate. Breakage caused by fire, lightning, explosion, aircraft, collision, windstorm, earthquake, flood, malicious damage or theft, or derailment or overturn of a conveyance, is covered. By purchasing breakage coverage the insured buys coverage for breakage not caused by one of these perils. Third, it is not uncommon for an insured to display artwork in his or her place of business, and subject to the homeowners policy limitation. Scheduling eliminates the problem. A wide variety of property qualifies for coverage as fine art. A typical fine art policy includes a number of significant coverage restrictions. Most fine arts coverage applies only to losses that occur within the United States, its territories, possessions and Canada. Because many fine arts articles are particularly fragile, there are policy restrictions regarding routine handling, as well as placing articles on public display. The insured must agree that the covered property will only be handled by competent packers. There is no indication, however, whether competent means professional, or just persons who handle the property without being clumsy or irresponsible.

Eligibility

Due to the broad coverage and large values involved, great care must be taken in the selection of risks, especially since fine arts coverage is vulnerable to fraudulent claims. All articles to be insured must be individually described with an amount of insurance assigned to each piece. It is permissible to include blanket items. In cases where bulky schedules involving a large number of items are concerned, policies may be issued without attaching the schedule of items. An endorsement stating that the policy covers the property document in a schedule dated and filed at the insurer’s office should be attached. Fine arts insurance provides protection against sources of direct physical loss or damage, except for the losses that are specifically excluded. Private collections of paintings, etchings, pictures, tapestries, art glass windows, and other bona fide works of art of rarity, historical value, or artistic merit are eligible. This includes valuable rugs, statuary, marble, bronze, antique furniture, rare books, antique silver, manuscripts, porcelains, and rare glass. Coverage is also available for miscellaneous items that are rare, have historical value or artistic merit. This insurance is designed for private collections, not property belonging to or in the custody of:

Dealers

Auction rooms

Museums

Art galleries

Art institutions (other than schools, colleges, universities) Fine Arts insurance on private collections is available for individuals, firms, corporations, or associations that are not dealers, auction rooms, museums, art galleries, or art institutions ordinarily open to the public. University, college, and school risks, as well as hotels, however are eligible for the insurance.


Also excluded from eligibility is property owned by and insured for the account of federal, state, county, or municipal authorities, and temporary exhibits of property not owned by the insured. Fine arts coverage for commercial risks is available through specialty markets.

Coverage

If fine arts are covered: (a) damage caused by any repairing, restoration or retouching process; (b) breakage of art glass windows, glassware, statuary, marble, bric-a-brac, porcelains and similar fragile articles. We cover loss by breakage if caused by fire, lightning, aircraft, windstorm, malicious damage, theft, explosion, earthquake, flood or collision, derailment or overturn of conveyance; (c) loss to property on exhibition at fair grounds or premises of national or international expositions unless the premises are covered by this policy.

Fragile articles are particularly susceptible to breakage. Exclusion (b) can be eliminated for an additional premium. Since the owner usually exercises loss prevention measures, the breakage losses do not cause great problems for insurers. The loss settlement condition of the PAF replaces the loss settlement clause of the inland marine floater policy. As a result, fine arts are insured on a valued basis, and the amount of insurance appearing on the schedule is the amount that will be paid at the time of the loss.

(a) Fine Arts-We will pay the amount shown for each scheduled article, which is agreed to be the value of the article. In cases of loss to a pair or set, we agree to pay you the full amount of the set as shown in the schedule and you agree to surrender the remaining article or articles of the set to us.

As with other classes of property eligible for the personal articles form, fine arts are covered on an open perils basis. However, coverage differs from other property coverage in the following ways:

Rare, historic objects or items of artistic merit are difficult to value. One-of-a-kind items are irreplaceable at any price. A rare, historic, or artistic item can be measured in monetary value, however objects with only sentimental value or age are not necessarily appropriate for fine arts coverage. A bill of sale or appraisal must be used to establish values. The pair, set, and parts clause differs from that provided for other classes of scheduled property. For fine arts that are part of a set, the insurer agrees to pay the full value of the set but then takes possession of any remaining part. If a work of fine art, which is part of a pair or set, is damaged or destroyed, the company has the right to pay the full amount for the pair or set and take possession of the remaining undamaged pieces. The way to avoid this situation would be to insure each item separately rather than as a set.


The insured also agrees when moving fine arts that competent packers will handle the covered property. The producer must accurately state the address on the application. The policy states, "This premium is based on your statement that the property insured is located at the following address." The insurer could deny coverage if the address is misstated or if the insured moves the property to another location during the policy term. There are no exclusions for loss caused by water damage or earthquake on the HO 04 61. Frequently a company will apply alarm credits to the premium. When establishing a value for fine arts, an appraisal is usually preferred to a receipt showing what the insured paid. It is the responsibility of the client to establish value, and to insure appropriately. Actually applying the fine arts definition to property is difficult. Many objects, such as paintings and sculpture, are clearly fine art, however other objects fall into various categories such as collectors' items, limited editions, and memorabilia. Fine Arts insurance is usually written on a special form basis and is designed to cover articles in private ownership, including collections. Insurance covers the property insured under the policy within the limits of the continental United States, Hawaii, Canada; off-premises coverage extends to property that is on exhibition (excluding fairgrounds or any national or international exposition), unless included by endorsement. Insured property located in Puerto Rico is subject to the same coverage conditions as in the continental United States and Hawaii. Regardless whether such property is covered by an endorsement or a separate policy, the form usually includes a schedule containing the following information, at a minimum:

Property class

Detailed property description

Insurance limit

List of property locations

Appraised value

COVERAGE OPTIONS

Insureds have options when insuring art objects. They may schedule each item, applying a specific amount of insurance to the objects in a Homeowners policy endorsement. The Unscheduled Personal Property coverage under the Homeowners policy may be increased by endorsement to accommodate the higher values, or they could write a separate Personal Articles Floater policy.

EXCLUSIONS AND LIMITATIONS

Several Personal Articles Floater exclusions apply only to fine arts. There is no coverage on fine arts for damage resulting from repairing, restoration, or retouching; nor is there coverage of



breakage of art glass windows, statuary, marble, glassware, bric-a-brac, porcelains and similar fragile articles unless the loss is caused by fire, lightning, aircraft, theft, windstorm, earthquake, flood, explosion, malicious damage or collision, derailment or overturn of a conveyance. Full open perils coverage may be arranged on specific fragile articles. The articles otherwise subject to the breakage exclusion must be scheduled separately for this coverage with a separate amount of insurance, subject to an additional premium. Fine Arts insurance does not cover:

Wear and tear, gradual deterioration, insects, vermin, or inherent vice (Inherent vice refers to the characteristics of physical property that are expected to cause deterioration to that property without outside help),

Damage caused by any repairing, restoring, or retouching process,

Breakage of art glass windows, glassware, statuary, marble, bric-a-brac, porcelains, and similar fragile articles. Loss by breakage is covered, however, if caused by fire, lightning, aircraft, windstorm, malicious damage, theft, explosion, earthquake, flood or collision, derailment, or overturn of conveyance.

There is an exclusion of property on exhibition at fairgrounds or on the premises of national or international expositions unless such premises are specifically covered by fine arts coverage. BREAKAGE COVERAGE The policy may be amended with a Breakage Coverage endorsement, typically covering breakage of the following types of property:

Art glass windows (i.e., stained glass),

Glassware,

Statuary marble,

Bric-a-brac, and

Porcelains and similar fragile articles.

IMPORTANT PROVISIONS

Because of the nature of fine arts and the special exposure to loss they represent, there are a number of conditions that apply to their coverage. The conditions are meant to minimize the likelihood of a loss. Typically these conditions include:

The covered property, whenever moved, must be packed and unpacked by competent packers.

The insurance will not operate to benefit any carrier or other bailee who has temporary control over the covered property.

In the event of the total loss of any article or articles, which are a part of a set, the company agrees to pay the insured the full amount of the value of the set as specified in the policy or endorsement schedule. The insured agrees to surrender the remaining article or articles of the set to the company.


NEWLY ACQUIRED PROPERTY

Coverage of up to 25% of the amount scheduled for fine arts is provided automatically for newly acquired art. The insured must report such new property to the company within 90 days and pay a pro rata premium from the date of acquisition. Since coverage under this provision is on an actual cash value basis, it is important to schedule items as soon as possible to obtain valued coverage.

BLANKET ITEMS

Items may be covered on a blanket basis, however such items must be described on the schedule and their total value must not exceed 10% of the total amount scheduled. A higher limit may be negotiated with the insurer. Coverage on blanket items is based on cash market value and is subject to a 100% coinsurance clause. No coinsurance clause applies to scheduled items.

DEFINITIONS

Primary location The permanent premises for the fine arts to which, whenever removed, the scheduled property will be returned. Additional or Secondary locations The temporary premises for fine arts, which were removed from a primary location. Other locations A separate premises for fine arts private collections not falling under the definitions of primary and additional or secondary locations.

IN EVENT OF LOSS

The insured must notify the company or its agent as soon as possible of every loss or damage that may become a claim under the policy. An insured is also required to file a sworn proof of loss within 90 days from the loss. Failure to follow this procedure will invalidate any claim. The insured must submit to examinations under oath by company representatives related to any claim. The insured must also assist a company in getting all other persons (including other insurable interests, household members and employees) to cooperate with examination requests. He or she is also required to make all account, bills, invoices and other vouchers, or certified copies available to the insurer and to permit the insurer to make extracts and copies. All adjusted claims are paid to the insured within 60 days after presentation and acceptance of satisfactory proof of interest and loss.


The insurance contributes pro rata with other applicable insurance: The company is not liable for more than the amount for the respective articles covered under the policy. The entire policy shall be void if the insured has concealed or misrepresented any material fact or circumstance concerning the insurance, and in case of any fraud or false swearing by the insured regarding any matter relating to the insurance, whether before or after a loss. Appraisal If the insured and the company fail to agree on the loss amount, either party can demand that the loss be submitted for appraisal. The request has to be in writing and it must be made no later than 60 days after the company has received a valid proof of loss. Once the appraisal option has been chosen, each party must:

Select a competent appraiser (the appraiser must be a disinterested party, and must not be in a position to benefit personally from the appraisal decision),

Agree to a (reasonable) time and place for the appraisal, and

Select a competent and disinterested umpire within 15 days. After the appraisers evaluate the loss, they must attempt to agree upon a loss amount. If they cannot agree, they must forward the decision to their umpire. A decision reached by any two of the three parties establishes the loss amount, as long as the amount is provided in writing. The insured and the company each pay its appraiser and equally share the other appraisal expenses including the cost of the umpire. Subrogation After an insurer pays a loss, the insurer obtains all of the insured’s rights of recovery against any person or organization. The insured must execute and deliver instruments and papers and do whatever is necessary to secure such rights for the company.

VALUATION

Fine Arts insurance is valued coverage. Bills of sale or appraisals should be obtained before coverage is issued. A temporary binder should be made contingent upon obtaining supporting documents that justify the listed amount of insurance. Some companies write insurance on an actual cash value basis by use of a Valuation endorsement. (At one time, this was accomplished by using a form called the Actual Cash Value Clause endorsement [IFA 08 11]). Underinsurance should be avoided by securing periodic appraisals. Even with items of lesser value, the existence of bills of sale and appraisals will facilitate adjustments and reduce questions of valuation.

RATE AND PREMIUM

Rates for Fine Arts Insurance are typically based on a per hundred or per thousand dollars of coverage basis.


ART AS INVESTMENT

Valuable paintings and other objects of art are often acquired and kept solely for aesthetic reasons. However, art collections are also popular as investments for individuals and homeowners. It is important that agents and insurers ask about the existence of fine art and other collectibles during personal insurance program reviews and renewals.

Inventory Recommended

To help an insured evaluate his fine art exposure an agent should recommend that a full inventory be created. The inventory may quickly point out that an insured owns more special property than he or she realized. Or, an insured may realize that he has no idea of their current value. Limited Edition Collectibles Limited edition collectibles can consist of precious and semiprecious metals, porcelain, or crystal collections. The owner receives a certificate of authenticity with the number of the particular object and the total number of objects produced. Memorabilia Objects up to twenty years old are considered collectible, and can be found in catalogs and antique malls. It must, however be an object of "rarity" with a value that can be determined at the time of loss. Scheduling an object as a fine art means that it will be insured on an agreed value basis. The listed value is the maximum that the insured can collect for the scheduled object. The insurer will pay that listed value at the time of the object's loss or destruction. Determining and substantiating the value of the fine arts is probably the most difficult part of underwriting fine arts. Exposure evaluation depends largely on the type of property involved and its value. The evaluation depends primarily on the protection class of the property as well as alarm systems or security measures used by the insured. The applicant's integrity is important to consider. The value of the fine arts coverage would be compared to the value of the applicant's other property. Occupation is an important factor in underwriting fine arts. Art dealers, antique dealers, museum curators, and people with similar occupations pose additional underwriting concerns. Oriental Rugs Oriental rugs are popular because they are attractive and a good investment. The majority of these rugs come from the Middle East. Oriental rugs are also produced in Eastern Europe, Spain, Egypt, Greece, Mexico, and Morocco. Native American rugs are also placed in the Oriental rug classification. The appraisals on the rugs should contain the following:


Place of origin or pattern. Tribal names are used to describe the pattern and place of production. The patterns can also be described according to the design.

Condition. The appraisal should provide comments regarding the condition of the fringe or binding and the rug overall.

Age. Rugs are classified as new (up to 50 years old), semi-antique (50 to 100 years old), or antique (over 100 years old).

Materials: Rugs are made of wool, cotton, silk, jute, or animal hair. Silk and lambs wool rugs are the most valuable.

Knots. Rugs of average quality have 90 to 250 knots per square inch. High-quality rugs have 400 to 700 knots per square inch.

Location. Walking on an Oriental rug improves the condition and appearance of the carpet.

A valuable rug should not be placed in an area where it can be soiled or damaged. Hanging a rug can cause stretching. Rolling and stacking rugs for an extended period can cause the foundation fibers to warp and break, and the pile to crush. Some insurers insist that valuable carpets be placed on the floor, away from main traffic areas.

Stamp and Coin Collection Insurance

Two of the most popular hobbies in the world are stamp and coin collecting. Collections are often worth many thousands of dollars. The large values combined with small, often delicate items create unique exposures. Collectors are very proud of their collections, and are extremely careful to protect them. Stamps and coins derive their value from their rarity, age, and condition, like fine arts. Individuals invest in valuable stamp or coin collections much as they do in paintings, antique furniture, and other fine arts.

Terms

The term “philatelic” or “philately” refers to stamp collecting. “Numismatic” refers to coin collecting. Because those two classes have a great deal in common, they are discussed together in the policy.


The descriptions permit not only coins and stamps to be scheduled, but also the property associated with the collections: albums, cabinets, and containers. The definition also allows scheduling of items other than the traditional postage stamps and U.S. coins, such as Christmas seals, subway tokens, and military medals. The category does not, however, include precious metals in the form of ingots or bullion.

Coverage

The collector should keep complete records about his or her collection, including descriptions of each piece, purchase date, purchase price, and current value (substantiated with an appraisal or current price guide). Coins are not as easily destroyed by fire as are stamps, but their value may depend upon their condition. Heat and smoke may tarnish or distort coins, reducing their value. Collections of current coins and currency may be subject to greater loss from theft, because the money can be spent. Safety precautions, such as a safe or central station alarm, may be required by an underwriter prior to insuring a large coin collection. Provides worldwide coverage on an all risks basis for stamps and other philatelic property and/or coins and other numismatic property owned by or in custody or control of the insured. Insurance may be written on a blanket or scheduled basis, using the Stamp and Coin Collection provisions of a Personal Articles Floater policy or Homeowners Scheduled Personal Property Endorsement. The rules allow coverage only for private collectors, not for dealers or auctioneers. The definition of "postage stamps" and rare and current coins in the personal articles floater allows a broad range of objects to be written in this class. Postage Stamps This term includes the following that are owned by or in custody or control of the “insured”:

Due

Envelope

Official

Revenue

Match

Medicine stamps

Covers

Locals

Reprints

Essays

Proofs

Other philatelic (stamp) property, and

Books, pages and mounting of items. Different rates are used for stamps and coins. The PAF separates stamps and coins into different classifications.


Rare and Current Coins The phrase “rare and current coins” includes the following that are owned by or in the custody or control of the “insured”:

Medals

Paper money

Bank notes

Tokens of money and other numismatic property

Coin albums

Containers

Frames

Cards, and

Display cabinets used with such collections Coverage is provided for all of the above and similar property in an insured’s possession or control. Insurance protection is typically provided against all risks of physical loss (except as excluded) and may be written on a:

Blanket basis,

Scheduled basis, or

Combination of blanket and scheduled coverage. The combination approach would be suitable for insureds who own individual pieces of property with high values, along with property that has substantial value on an aggregate basis.

Territory

Coverage applies while the property is located anywhere in the world.


The policy does not insure listed property against the following situations or sources of loss:

Wear and tear, gradual deterioration, insects, vermin, or inherent vice,

Fading, creasing, denting, scratching, tearing, thinning, or transfer of colors,

Inherent defect, dampness, extremes of temperature, or gradual depreciation,

Any damage from handling or working upon,

Disappearance of individual stamps, coins, or other articles; there are exceptions to individual items that disappear. Coverage is provided if the item is described and scheduled with a specific amount of insurance, or if the item is mounted in a volume and the page to which it is attached is also lost.

Loss to property in the custody of transportation companies,

Loss to property while shipped by mail (unless it is by registered mail),

Theft from any unattended automobile unless being shipped as registered mail,

Loss to property that is not an actual part of a stamp or coin collection.


The newly acquired property clause of the personal articles form does not apply to stamp or coin collections. When additions are made, coverage should be increased by endorsement immediately. Five special exclusions limit "all-risks" coverage on stamp and coin collections. Losses caused by the following are not covered: Coverage on stamps and coins under the personal articles form does not extend to:

a) Fading, creasing, denting, scratching, tearing, thinning, transfer of colors, inherent defect, dampness, extremes of temperature, gradual depreciation, or any damage from handling or being worked upon; b) Any damage from being handled or worked on c) Fading, creasing, denting, scratching, tearing, or thinning Transfer of colors, inherent defect, dampness, extremes of temperature, or deterioration d) Theft from any unattended automobile unless being shipped as registered mail; e) Disappearance of individual stamps, coins or other articles unless the item is described and scheduled with a specific amount of insurance, or if the item is mounted in a volume and the page to which it is attached is also lost; f) Loss to property in the custody of transportation companies; nor shipments by mail other than registered mail;

g) Loss to property which is not an actual part of a stamp or coin collection.

The unattended automobile exclusion can be deleted for an additional premium. Typically this option is available for an additional annual premium such as 5% of the premium charged for the entire stamp and coin collection.

Special Conditions

The conditions affecting valuation emphasize the desirability of scheduling items whenever feasible. If the loss involves individually scheduled stamps or coins, the company shall pay no more than the least of the following amounts: the actual cash value of the property at the time of loss or damage; the amount for which the named insured could reasonably be expected to have the property repaired to its condition immediately prior to loss; the amount for which the named insured could reasonably be expected to replace the article with one substantially identical to the article lost or damaged; or the amount of insurance. In case of loss of or damage to an individual article scheduled in the policy, the company will pay for the insured’s loss or damage. However, payment will not exceed the limit of insurance listed for the item.


In case of loss or damage to property scheduled as pairs, strips, blocks, series, sheets, covers, frames, cards or other sets, the insurer will:

Total Loss – pay up to the maximum dollar amount that appears as the applicable insurance limit unless it is possible to replace the property.

Partial Loss – pay an amount equal to the cash market value of the entire pair or set, minus the cash market value of the remaining property at the time of loss. Besides being subject to the availability of replacing or repairing the property, there is another limitation on any settlement amount. The insurer will pay up to the maximum amount equal to the proportion that the limit of insurance bears to the cash market value when the affected property is insured for less than its cash market value.

Special loss settlement provisions apply to stamp and coin collections as follows:

(b) Postage Stamps or Rare and Current Coin Collection – In case of loss to any scheduled item, the amount to be paid will be determined in accordance with the 3 Loss Settlement provisions, under General Conditions in the policy. When coins or stamps are covered on a blanket basis, we will pay the cash market value at the time of loss but not more than $ 1,000 on any unscheduled coin collection nor more than $250 for any one stamp, coin or individual article or any one pair, strip, block, series, sheet, cover, frame, or card. We will not pay a greater proportion of any loss on blanket property than the amount insured on blanket property bears to the cash market value at the time of loss.

Blanket Coverage

Policies may be written on a blanket basis subject to a limit of $1,000 on unscheduled numismatic or philatelic property and subject to a limit of $250 for any one unscheduled stamp, coin, or other individual article or any one pair, strip, block, series, sheet cover, frame, card, etc. The cash market value at the time of loss is the basis of recovery, A 100% coinsurance clause also applies to unscheduled property. The company will not pay a greater proportion of any loss on blanket property than the amount insured on blanket property bears to the cash market value at the time of loss. This limitation protects insurers in instances that an insured “blankets” property valuable enough to have been separately scheduled as well as in instances when the aggregate property substantially appreciates in value.

Required Of Insured

Schedules and insurance values must be determined with care. Policies typically contain a condition that voids coverage if the insured has concealed or misrepresented any material fact or circumstance concerning the insurance. Fraud, attempted fraud, or false swearing by the insured in connection with the insurance or a claim renders the policy void.


Individual stamps or coins are not always listed. They are generally grouped or classified and listed with an amount of insurance for each group or class. A premium credit is allowed if the insured agrees to keep at least 75% (by value) of the insured stamps or coins in a fireproof combination-locked safe or vault when the collection is not being used or exhibited.


OTHER PERSONAL INLAND MARINE FLOATERS

PERSONAL EFFECTS FLOATER (PEF)

The personal effects floater (PEF) provides "all-risks" coverage on personal property such as luggage, clothes, cameras, and sports equipment normally worn or carried by tourists and travelers. The PEF covers property worldwide, but only while the property is away from the residence premises. Coverage applies to property belonging to and used or worn by the named insured, spouse, and unmarried children who permanently reside with the named insured. The PEF excludes coverage for certain perils and certain types of property. In addition to the standard inland marine exclusions, the PEF excludes coverage for personal effects while in the following circumstances:

On the insured’s residence premises

In storage; however coverage is provided for property at places en route during travel

In the custody of students at school except for loss by fire

In an unattended automobile unless the automobile is equipped with a fully enclosed body compartment, the automobile or compartment is locked, and marks of forcible entry are visible

Certain maximum amounts of insurance apply to jewelry, furs, or property stolen from an unattended automobile. With the payment of an additional premium, the following may be included in the PEF:

Additional insureds, including persons residing permanently with the named insured

Property of students away at school

Contents of an owned or leased automobile trailer or trailer home

Theft of property from unattended automobiles that have no visible signs of forcible entry

Property while contained in the residence premises

Need for Personal Effects Coverage

The personal effects floater was popular before homeowners policy forms were standardized in the 1970s. Homeowners policies at that time limited coverage on unscheduled personal property away from the residence premises to 10 percent of the on-premises limit for


unscheduled personal property. The named perils coverage of the HO form was also inadequate. Homeowners forms today cover unscheduled personal property away from the residence premises for the full policy limit on Coverage C and can be endorsed to provide “all-risks” coverage with the Special Personal Property Coverage – HO 00 15. Since most insureds who have a homeowners policy are adequately insured for the exposures covered by the personal effects floater, the personal effects floater has limited application today. There are, however, persons and situations where the floater’s coverage represents a viable form of insurance. Traveling exposes personal property to a unique set of risks, many of which are not covered under an H03 policy. The open perils coverage of the personal effects floater fills this gap. Although the homeowners policy covers personal property worldwide, some persons are ineligible for homeowners coverage and might need a PEF. For example:

Persons who live on their boats and do not own a home need personal effects coverage when they travel.

Retired persons who live in retirement homes or with others need coverage for their personal effects when they travel.

Other persons covered under a homeowners policy might want broad "all risks" coverage for the increased hazards to which their personal property might be exposed while being transported.

Situations that still make this form useful include:

Some homeowners policies still have a 10 percent limitation on unscheduled personal property away from the residence premises. If eligible property exceeds that amount, the personal effects floater can provide additional coverage.

"All-risks" coverage on unscheduled personal property might be unavailable under a particular insurer's homeowners program.

An individual who no longer has a homeowners policy might need this coverage for travel.

PEF Valuation

The PEF will pay the least of the following settlements for a loss to property covered by the policy:

ACV

Cost of repairs

Cost of replacement with a substantially identical article Losses to pairs, sets, or parts are settled in the same manner as previously described for the PAF policy.


Property Covered

1. Property Covered

We cover Personal Effects usually carried by tourists and travelers, belonging to and used or worn by you and your spouse and your unmarried children permanently residing with you.

2. Property Not Covered

We do not cover: automobiles, motors, motorcycles, bicycles, boats or other conveyances or their accessories; accounts, bills, currency, deeds, evidence of debt, letters of credit, passports, documents, money, notes, securities, transportation or other tickets, household furniture, animals, automobile equipment, salesmen’s samples, physicians’ and surgeons’ instruments, contact lenses, artificial teeth or limbs, merchandise for sale or exhibition, theatrical property, or any property specifically or otherwise insured.

The term personal effects typically means articles normally worn or carried on the person. It is not as broad as the term unscheduled personal property, as covered on the homeowners policy. To be eligible for coverage, property must not only be used or worn by an insured but must also belong to an insured. There is no coverage for articles an insured rents or borrows.

Perils Insured Against and Limitations

The exclusions and limitations for coverage under the personal effects floater include the following:

War and nuclear risks.

Wear and tear, gradual deterioration, insects, vermin, inherent vice, or any damage from being worked on.

Breakage of articles of a brittle nature unless caused by thieves, fire, or accident to conveyances.

Theft from an unattended auto, unless the auto is equipped with a fully enclosed body or compartment and the loss is a direct result of forcible entry. Such a loss is covered for no more than 10 percent of the total amount of the loss or $250, whichever is less. (This limit can be deleted by endorsement.)

3. Perils Insured Against and Limitations We insure for all risks of physical loss to the property described except: a. Wear and tear, gradual deterioration, insect, vermin, inherent vice or any damage from being worked upon;


b. breakage of articles of a brittle nature unless caused by thieves, fire or accident to conveyances

Coverage is on an open perils basis with the exclusions characteristic of open perils inland marine policies, such as wear and tear, inherent vice, etc., and breakage of fragile items unless caused by thieves, fire or vehicle accident.

4. Conditions We do not cover personal effects a. while on the premise of your domicile; b. while in storage; however, we do cover the property at points and places en route during travel; c. in the custody of students while in fraternity or sorority houses, dormitories, or on the premises of educational institutions. However, in these situations we cover against the risk of fire only. 5. Limitations on Certain Personal Effects We cover the following personal effects for a maximum of 10% of the total amount of insurance of this policy, subject to a limit of $100 on any one such article. a. Jewelry, watches, articles consisting in whole or in part of silver, gold or platinum. b. Furs or articles trimmed with or consisting principally of furs.

Property on the premises of the "insured's domicile" is not covered. Domicile is not defined in the policy, but is generally considered to be the permanent home and principal establishment, to which, whenever absent, the insured intends to return. Coverage for jewelry, watches, and furs is limited to $100 per article. Vehicles, bicycles, currency, and travel tickets are not covered. PEF coverage applies worldwide except at the home. Loss occurring to property in storage is excluded. Property is not "in storage," however, when left at points and places en route during travel. The policy is not intended to cover property that is not ordinarily carried by travelers. All coverages are provided for a blanket amount. No coinsurance clause applies. The following three provisions help to define the extent of coverage:

1. Personal effects while on the “premises of the named insured’s domicile” are not covered. This provision can be deleted by endorsement.


2. Personal effects while in storage are not covered. This provision has an exception

that allows coverage if the property is “at points and places en route during travel.” Insured property in the custody of students and located in fraternity or sorority houses or dormitories or on the premises of educational institutions is covered only against the peril of fire.

3. Only fire coverage is provided for personal effects in the custody of students while in a fraternity, sorority house, dormitory, or other premises at school or college, due to the high risk of loss to property in a communal living environment. The provision does not apply to students who live in private homes or rooming houses not on the premises of the school or college. This provision can be deleted by endorsement.

A 10 percent limitation of up to $100 applies to loss to jewelry, watches, silver, gold, platinum, and furs.

6. Theft from an Unattended Automobile (a) We do not cover loss or damage caused by theft to your personal effects from an unattended automobile unless 1. the automobile is equipped with a fully enclosed body compartment; and 2. the loss is a direct result of forcible entry (of which there is visible evidence) into a fully enclosed body, the doors and windows of which shall have been securely locked, or from a compartment which shall have been locked. (b) Loss Settlement: In any one loss, we shall pay no more than 10% of the total amount of insurance of this policy or $250, whichever is less.

Any one loss of property by theft from an unattended automobile is covered only up to 10% of the policy amount or $250, whichever is less, and requires that visible evidence of forcible entry into the locked automobile itself or into a locked compartment exists.

Standard Endorsements

Coverage provided under the basic personal effects floater may be modified through the use of any of seven optional endorsements. Five of these options increase the scope of coverage as indicated below:

Additional insureds. "Insured" includes only the name insured, his or her spouse, and unmarried children living at home. Others, if residing permanently with the named insured, may be named as additional insureds. The endorsement requires an additional premium for each additional person.

Students at schools or colleges. This endorsement amends the coverage from fire only to open perils. Rules call for a percentage increase in policy premium subject to a minimum additional charge.


Automobile trailer contents. This endorsement adds coverage for furniture and furnishings of an auto trailer or trailer home owned or leased by the insured. Coverage applies only to such property contained in or used in connection with one trailer and does not extend to built-in equipment and accessories or equipment usually attached to an "ordinary automobile of the private passenger or truck type."

The endorsement excludes marring and scratching, dampness of atmosphere, extremes of temperature, mechanical breakdown, and electrical damage. (Ensuing fire damage in connection with either of the latter two perils is covered).

A separate amount of insurance is to be specified in the endorsement and an additional premium considerably higher than for basic coverage is charged on the basis of this amount.

Theft of property from unattended automobiles. The requirement of visible signs of forcible entry may be deleted for a flat additional charge.

Domicile risks. For a premium increase of 25%, personal effects coverage may be extended to eligible property while on the premises of the insured's domicile. This coverage is subject to the equivalent of a 100% coinsurance requirement; in the computation of the value of all insured property for purposes of determining the insured's compliance with this requirement, the value of covered jewelry, watches, precious metals, and furs is excluded.

Two optional endorsements may be used to limit the basic coverage:

1. For a substantial reduction (typically 50%) in the flat charge portion of the premium, a $25 deductible may be applied to each claim under the floater. The deductible amount is subtracted from either the amount of the adjusted claim or the applicable amount of insurance, whichever is less.

2. The perils of theft or attempted theft, larceny, burglary, robbery, mysterious

disappearance, and vandalism or malicious mischief may be excluded for a premium credit. The percentage credit applies to the basic premium as well as the additional premiums charged in connection with endorsements pertaining to domicile risks, unattended automobiles, students' property, and auto trailers.


PERSONAL PROPERTY FLOATER (PPF)

Coverage for specific classes of property, such as money, securities, jewelry, watches, furs and other items of high value, is subject to special limits, just as they are under a homeowners policy. But these limits may be raised by attaching individual article floaters which show scheduled amounts of coverage. The comprehensive coverage provided by the PPF is relatively expensive, and the form is designed for people who have significant amounts of personal property and travel extensively. Others probably would not be willing to pay the high premiums for worldwide all risk coverage. The personal property floater (PPF) provides "all-risks" coverage on unscheduled personal property owned or used by the insured and normally kept at the insured's residence. Permanent coverage on property "regularly situated throughout the year" elsewhere than at the residence specified in the policy is available only by endorsement and for an additional premium. The coverage at other locations endorsement requires that the locations at which covered property is regularly situated be specified and that an amount of insurance be specified for each of the 13 categories of insurable property. Unscheduled personal property is property that is not specifically listed (scheduled) on a policy. Development of the Personal Property Floater The personal property floater was developed in the 1950s to provide “all-risks” coverage for personal property, when increasing use of the automobile created the need for insurance coverage away from an insured's home. Fire insurance policies at the time provided an extension of 10% of the contents limit for property away from the residence and provided only named perils coverage. Two perils often faced by a traveler, theft and the perils of transportation, were not covered. This floater provided coverage for a much broader set of perils. The personal property floater was developed to bridge these gaps. The personal property floater has broad perils and covers the insured's personal property anywhere in the world. Furniture, clothing, and similar unscheduled personal articles are covered under a blanket amount of insurance. Valuable items (such as jewelry, furs, etc.) may be scheduled with a specific amount of insurance on each item. The personal property floater provides open perils coverage for most of the kinds of personal property found in a typical home, including, under certain circumstances, property of others. The insured's additions and alterations to the part of the residence occupied by the insured as a


tenant or to a condominium unit owned by the insured may also be covered. In circumstances where the insured has large collections of personal property, which he or she does not want to cover under the homeowners form, the separate inland marine personal property coverage may be valuable.

PPF Covered Property

The primary difference between the personal property floater and the personal articles floater reviewed in the previous section is that the PPF covers unscheduled property while the PAF covers scheduled property. The personal property floater may be used to insure an insured's personal property on an unscheduled basis. A separate amount of insurance applies to each of 13 categories. The amount of insurance indicated for each category represents the insured's aggregate limit of recovery for any one loss of property in that category. The personal property floater is designed to cover household contents normally located at the insured's residence, subject to an amount of insurance selected by the insured for the following classes of property. The floater provides blanket protection on unscheduled personal property as a class. Specific items may be taken out of the blanket protection and scheduled, using the appropriate separate form. Jewelry and furs are often treated in this way, though they can be allowed to remain unscheduled if the insured is content with the more limited coverage available on that basis. The personal property floater describes insured property as "unscheduled personal property owned or used by an insured which is regularly situated at your residence." The same property is also covered while temporarily away from the insured's residence anywhere in the world.

We cover unscheduled personal property owned or used by an insured normally kept at your residence. This property is also covered while temporarily away from your residence anywhere in the world. At your request, we will cover unscheduled personal property of guests or servants while at your residence.

The PPF also provides worldwide coverage on the same property when it is temporarily away from the residence premises. The PPF can be used to insure thirteen classes of unscheduled personal property. A separate amount of insurance applies to each of the following classes:

1. Silverware, goldware, and pewterware 2. Clothing 3. Rugs and draperies 4. Musical instruments and electronic equipment 5. Paintings and other art objects 6. China and glassware 7. Cameras and photographic equipment 8. Guns and other sports equipment


9. Major appliances 10. Bedding and linens 11. Furniture 12. All other personal property, and professional books and equipment while in the

residence 13. Building additions and alterations

The total amount of insurance in each category is the maximum limit of recovery for any single loss to property in that category. The total amount for the thirteen categories is the total policy limit. A deductible applies to each loss. As always in "all-risks" policies, specific exclusions apply. The importance of the personal property floater has decreased with the availability of worldwide coverage for personal property under homeowners policies. This coverage is still available, however, for individuals who do not wish to insure, or do not qualify for, their personal property under a homeowners policy. The following are situations when an insured might purchase a personal property floater:

An insured who has sold their home is taking an extended trip around the world. The PPF could provide coverage for personal property the couple has stored at a friend's house or in a storage facility.

An insured whose mortgage payments include his homeowners policy premium might wish to insure valuable property under a separate PPF to lower the monthly mortgage payment.

The personal property floater (PPF) is similar to the homeowners "Special Personal Property Coverage Endorsement" (HO-15), which provides all risk coverage on a worldwide basis for unscheduled personal property. The HO 00 15 and HO 17 31 "all-risks" endorsements for personal property can be attached only to the HO-3 and HO-6 respectively. Insureds in apartments are eligible only for HO-4.) Newly Acquired Property (All Classes)

We cover newly acquired property of a class of property described above. The lesser of the following limits applies: 1. 10% of the Total Amount of Insurance, or 2. $2,500

This amount may be applied to any of the numbered classes, however, it does not increase the total amount of insurance.


Property Located in a Newly Acquired Principal Residence

We cover property in a newly acquired principal residence for the 30 days from the time you begin to move the property there.

A special provision of the personal property floater concerns moving to a newly acquired principal residence. Property is covered at the new residence, subject to the amounts of insurance for various listed categories, for 30 days after the insured begins moving it there. Other Personal Property

We cover the following unscheduled property. The limit for each numbered class shown below is the total limit for each loss for all property in that numbered class. 1. $100 on: a. money, numismatic property, bullion; and b. precious metals 2. $500 on: a. securities, notes, accounts, bills, deeds, evidences of debt, letters of credit; b. stamps, philatelic property; and c. passports, documents, tickets or other papers of value 3. $500 on: a. jewelry, watches, furs; and b. precious or semi-precious stones or gems

Money and Securities Maximum liability for any one loss of money is $100 and of securities, $500. Money may be raised to as much as $500 and securities to as much as $1,000 for an extra premium. The money limit also applies to numismatic property (coin collections) and to precious metals and bullion. The securities limit also applies to notes, accounts, bills, deeds, evidences of debt, letters of credit, passports, documents, tickets, and other papers of value; and to philatelic property (stamp collections). These collections may be scheduled or additional blanket coverage may be written on them. Unscheduled Jewelry, Watches, Furs The policy limitation having to do with unscheduled jewelry (including precious or semiprecious stones or gems), watches and furs, often involves too much concentrated value to be included


under the unscheduled coverage of the personal property floater. Recovery in any one loss of jewelry, watches and furs is limited to a total of $500 for any one loss in one, two, or all three categories involving one, a few, or many pieces. It is usually advisable to schedule jewelry, watches, and furs. Property Covered - Building Additions and Alterations

We cover building additions, alterations, fixtures, improvements or installations made or acquired at your expense, to that part of a residence you occupy as a tenant, or in a condominium unit you own.

The building additions and alterations coverage applies, in the amount indicated under category 13 of insured property, to additions, alterations, fixtures, improvements, and installations made or acquired at the insured's expense. These alterations may have been made either by an insured tenant to the part of the residence occupied by him or by a condominium unit owner to the unit. Covered Perils The personal property floater is "all-risks," except for the following perils:

War and nuclear loss

Water damage from flood, surface waters, or water that backs up through sewers

Loss caused by animals owned or kept by the insured marring or scratching

Breakage of eyeglasses, glassware, marble, and collectibles (such as statues and figurines)

The perils exclusions of the personal property floater are those commonly associated with open perils coverage. There is also the common exclusion found in most property forms for water losses. The water damage exclusion applies even when weather conditions contribute to the loss. Excluded as water damage are flood and other types of surface water; water backing up through sewers or drains; and water beneath the surface of the ground. There is an exclusion dealing with so-called "pet damage," referring to loss caused by animals owned or kept by an insured. Damage done by a pet belonging to a guest or neighbor is not excluded. The policy does not cover loss or damage caused by wear and tear, insects, vermin, deterioration, or inherent vice, or loss or damage caused by mechanical breakdown. There is an exclusion of loss or damage caused by dampness of the atmosphere or extreme changes of temperature. This exclusion does not apply, however, if the loss is caused directly by rain, snow, sleet, hail, or bursting of pipes or apparatus.


Damage caused by work performed on any covered property other than jewelry, watches, and furs is excluded. There is also an exclusion of loss or damage to electrical apparatus caused by electricity other than lightning. This does not affect coverage of damage by ensuing fire. The personal property floater also contains an exclusion of breakage of eyeglasses, glassware, statuary, marbles, bric-a-brac, porcelains, and similar fragile articles. The exclusion does not apply to breakage occasioned by theft or attempted theft, vandalism, malicious mischief, fire, lightning, windstorm, earthquake, explosion, rioters, strikers, collapse of building, or accident to conveyance. An exclusion of marring and scratching also except damage by the perils mentioned here. An exclusion of loss caused by acts or decisions of any person, group, organization, or governmental body is incorporated into the personal property floater as it is into other open perils forms in order to counter claims based on the concurrent causation doctrine. There are the customary war risks and nuclear hazards exclusions. These exclusions apply "regardless of any other cause or event contributing concurrently or in any sequence to the loss." PPF Exclusions

We do not cover 1. Animals, fish or birds; 2. Boats; aircraft; trailers; campers. 3. Motor vehicles, including motorcycles and motorized bicycles, designed for transportation or recreational use. 4. The equipment, accessories and furnishings of the vehicles in 2. and 3. above are not covered unless they are removed from the vehicle and are at your residence. We do cover invalid chairs and similar conveyances. 5. Owned property pertaining to a business, profession or occupation. We do cover your professional books, instruments and equipment while they are at your residence. 6. Property normally kept elsewhere than at your residence throughout the year.

Specifically excluded are the following:

Live animals, fish, and birds


The personal property floater excludes animals -- the family pet or any other. (Damage by pets is also excluded.)

Boats, aircraft, trailers, campers, autos, motorcycles, and other motorized vehicles Motorized wheel chairs and similar conveyances are specifically covered. Also excluded are equipment and furnishing of these excluded vehicles or conveyances, but there is coverage of equipment or furnishings while removed from a vehicle or conveyance and at the insured's residence.

Owned property pertaining to any business or profession. Articles separately described and specifically insured by this or other insurance.

An exception exists for professional books, instruments, and other professional equipment owned by an insured, if it is actually within the stated residence of the insured at the time of loss. It must be of a class that is governed by manual rules. Otherwise coverage may be written only under nonstandard forms.

Property regularly located throughout the year at a residence other than the principal residence of the insured

We insure against risks of direct physical loss to covered property except loss caused by: 1. Animals owned or kept by an insured. 2. Insects or vermin. 3. a) Marring and scratching of property; or b) Breakage of: (1) eyeglasses (2) glassware; marbles; bric-a-brac (3) statues; porcelain and similar fragile articles unless caused by a. fire, lightning; windstorm; earthquake b. explosion; collapse of the building; accident to conveyances; or c. rioters; strikers; theft; attempted theft; vandalism; or malicious mischief. 4. Mechanical or structural breakdown or failure or damage to electrical apparatus caused by artificial electricity Loss caused by fire is covered 5. Wear and tear, deterioration or inherent vice. 6. Dampness or extreme changes of temperature


Loss caused by rain, snow, sleet, hail or bursting of pipes or apparatus is covered. 7. Any work on covered property other than jewelry, watches and furs. 8. Acts or decisions, including the failure to act or decide, of any person, group, organization or governmental body. However, any ensuing loss not excluded is covered. The following is added under GENERAL EXCLUSIONS of the policy 3. Water Damage, meaning a. flood, surface water, waves, tidal water, overflow of a body of water, or spray from any of these, whether or not driven by wind; b. water which backs up through sewers or drains; c. water below the surface of the ground. This includes water, which exerts pressure on, or seeps or leaks through a building, sidewalk, driveway, foundation, swimming pool or other structures This exclusion also applies if weather conditions contribute in any way with water damage to produce the loss. Loss caused by fire, explosion or theft resulting from water damage described above is covered.

Valuation The PPF will pay the least of the following for property covered by the policy:

ACV

Cost of repairs

Cost of replacement with a substantially identical article

Losses to pairs, sets, or parts are settled in the same manner as previously described for the PAF policy.

The personal property floater states that, in the event of a covered loss, the company shall not be liable for more than the actual cash value of the property, with deduction for depreciation, however caused. In any event, recovery is to be limited to the amount for which the property could reasonably be expected to be repaired or replaced with substantially identical materials. This clause relates to actual cash value at the time of the loss, not at the time the policy was written. Two additional clauses affect the amount of recovery. These are the so-called "pair and set" clause and a clause limiting recovery to the value of a lost or damaged part of any property consisting, when complete for use, of several parts. The pair and set clause gives the insurer


the option of (1) repairing or replacing part of a set to restore its pre-loss value; or (2) paying the difference between the actual cash value of the property before and after the loss. Broad pair and set coverage may be applied to jewelry items. When To Write the PPF Coverage is available by endorsement attached to the PPF for property "regularly situated throughout the year" somewhere other than at the residence listed in the policy. An additional premium is charged for the endorsement. The policy could be useful for covering property for a couple taking a trip around the world. If they have sold their home or canceled their lease, they are no longer eligible for a homeowners policy. This floater could provide coverage for contents the couple has stored at a relative's home or in a storage facility. Some situations in which the PPF is still useful include the following: Customers who are in temporary living arrangements, such as a hotel room, might benefit by having a PPF. This floater could provide temporary coverage. The floater provides blanket protection on unscheduled personal property as a class. Specific items may be taken out of the blanket protection and scheduled, using the appropriate separate form. Jewelry and furs are often treated in this way, though they can be allowed to remain unscheduled if the insured is content with the more limited coverage available on that basis. Scope of Coverage The ISO personal property floater is a simplified-language contract subject to the provisions of the personal inland marine floater. Scheduling is a particularly important option with respect to certain types of valuable property -- jewelry, furs, fine arts, etc. Because the words "personal property" are not defined in the form, the legal definition of the term must be used. "Real property" is land and objects attached to the land. "Personal property," then, is any property that is not real property. The three groups of personal property are:

1. Movable objects. 2. Evidence of ownership in property -- e.g., stocks, bonds, etc. 3. Objects attached to land, but that retain their identity as personal property through a

special arrangement, such as a building on leased land where the lease specified that the building remains the property of its owner.

The term “insured” is defined in the policy as the named insured, the named insured's spouse, and relatives of either who are residents of the named insured's household. However, "relative" is not defined. Presumably it means related by blood, marriage, or adoption. The status of "foster children" or "wards" is unclear. “Your residence” is defined in the floater as the residence identified in the policy declarations. The manual rules indicate that only the main residence and out buildings that are related to the activities of the main residence are to comprise a single residence. Buildings adjacent to the


main residence that can be occupied as a residence from time to time by persons other than the named insured are to be considered separate residences. Since relatives of the named insured enjoy the status only of an insured, their homes, even if adjacent to the named insured's residence, would constitute separate residences.

Perils Insured Against and Exclusions

Additional Coverage

We cover the real property at your residence for an amount up to $2,500 for loss caused by: 1. Theft or attempted theft; and 2. Vandalism or malicious mischief to the inside of your residence in addition to the amounts of insurance specified for the 13 categories of insured property; the personal property floater provides coverage up to $2,500 for damage to real property at the named insured's residence caused by theft, by attempted theft, or, with respect to the interior of the residence, by vandalism or malicious mischief.

Additional Living Expenses Additional living expense coverage may be obtained by endorsement for an additional premium. The coverage is for any necessary increase in living expenses occasioned by a loss to the named insured's residence caused by a peril covered under the personal property floater. The increased living expense is intended to allow the named insured's household to maintain its normal standard of living while the residence is under repair. It applies, up to a stated limit, for the shortest time required to repair or replace the premises, or, if the premises are not reoccupied by the insured, the shortest time required for the insured's household to settle elsewhere. Coverage with respect to a covered loss under the additional living expense endorsement does not expire with the floater itself, but continues in accord with the time limits described above. Deductibles The personal property floater requires a $100 deductible applicable to each separate loss. For a premium credit, the amount of the deductible may be increased to either $250 or $500. Special deductible amounts may apply to losses caused by windstorm or hail. Limit of Insurance There is no coinsurance or similar clause in the personal property floater. Instead, the insured is required to indicate an amount of insurance for each of the 13 categories of insurable property. The total of these 13 amounts then becomes the total policy limit on unscheduled property. This establishes not only an aggregate limit of recovery for a loss of all personal property, but also individual limits of recovery for losses within any of the listed categories.


If no amount of insurance is set down for a category, no coverage on property in that category exists. A manual rule specifies that if no coverage on a particular category is desired, then that fact must be signaled by insertion of the word "nil" or "none" under "amount of insurance." Manual rules set $15,000 as the minimum amount of insurance for property at the insured's principal residence and $10,000 as the minimum for property at any secondary residence covered by endorsement. Maximum limits are subject to individual companies' underwriting requirements. To help keep total insured values current, a number of automatic increases in insurance endorsements are available. These endorsements provide for an automatic increase in the total policy limit at the end of each three-month period after the policy takes effect. Because some items may increase in value faster than others, the agent and insured are advised to examine all values on a regular basis. Other Insurance While the personal lines inland marine policy specifies itself as excess over other insurance, the personal property floater amends that provision. It says that in the event of other insurance, the insurance provided by the personal property floater for unscheduled property will be void, unless the other insurance is endorsed on the policy. Other Provisions Other provisions of the personal property floater include a clause stipulating that the policy is void if the insured has concealed or misrepresented any material fact or circumstance concerning the insurance or its subject. This also applies to fraud, attempted fraud or false oath, whether before or after a loss. The insured is required to report a loss as soon as practicable and to file proof within 90 days. The company must pay or "make good" within 60 days after acceptance of proof. There is a detailed statement that the insured and others "agree to be examined under oath," if required, and to produce records of various kinds. The form contains standard subrogation, suit against insurer, cancellation, and liberalization clauses. When to Schedule It is sometimes to an insured's advantage to remove certain property from the unscheduled coverage available under the personal property floater and insure it on a scheduled basis with the attachment of a personal articles form. There are three advantages to scheduling: 1. No deductible clause applies to scheduled coverage. 2. Increased limits are available on certain classes of property. 3. There is no exclusion of loss by flood, surface and subsurface waters, etc., in the

provisions for scheduled coverage.


An article of jewelry or a fur coat worth more than $500 should be scheduled, because of the policy limitation on unscheduled jewelry, watches and furs. Even though no particular piece of jewelry, etc., is worth more than $500, if the aggregate value of such items is above this figure, they should be scheduled, since all might be subject to a single loss. Scheduling of fine arts items puts the coverage on a valued basis. Scheduling also opens the opportunity to avoid the marring and scratching portion of the breakage exclusion with respect to fine arts. The breakage exclusions on both the scheduled and unscheduled forms make similar, but different, exceptions for breaking caused by certain named perils such as fire, lightening, windstorm, and so on. Stamp and coin collections and physicians' and surgeons' equipment are written according to their separate rules and rates, whether blanket or scheduled. This reference to "blanket" coverage does not mean the general unscheduled coverage of the personal property floater, which includes up to $500 on stamp collections and up to $100 on coin collections under the securities and money limitations. Those limitations may be increased to as much as $1,000 and $500, respectively. There is, however, no express maximum upon the amount of coverage that may be written on collections. It is usually prudent to write these under the Personal Articles Stamp and Coin Collection Floater, on either a blanket or scheduled basis. There is also limited coverage on physicians' and surgeons' equipment under the Personal Property Floater, but the Physicians' and Surgeons' Equipment Floater should be added to the basic policy in cases where substantial exposures.


Individual Article Floaters

A number of individual article floaters may be used to insure specific types of personal property for scheduled amounts. These are usually issued as inland marine forms. Separate floaters are available to insure bicycles, cameras, fine arts, golfer's equipment, jewelry and furs, musical instruments, stamp and coin collections, silverware, and other items. Individual floaters would be used instead of a personal articles floater when an individual's need to insure personal property was concentrated in one or two classes of property. When there is a need to insure multiple classes of property, it is more practical to issue the PAF.


Bicycle Floater

A standard form is available from the Insurance Services Office for insuring bicycles. The bicycle floater is used with and is subject to the general conditions of the personal inland marine floater.

1. Amounts of Insurance -- Scheduled Property Article Description Amount of Insurance

Bicycles are scheduled by name of article, physical description and the amount of insurance on each piece of property.

Insuring Agreement and Exclusions

2. Perils Insured Against and Limitations

We insure for all risks of physical loss to the property described except:

(a) wear and tear, gradual deterioration, rust, inherent vice, mechanical breakdown or derangement; (b) Damage from handling or being worked upon, unless caused by fire or explosion. 3. Deductible

We will not pay any claim unless the loss exceeds $5. 4. Theft of Property

You agree to report as soon as possible to the police any theft of property covered by this policy. 5. Territorial Limits We cover the property described while it is only within the limits of the Continental United States, Hawaii, Puerto Rico and Canada.


All types of bicycles can be covered except motorbikes or other motor powered vehicles or conveyances against all risks of physical loss, subject to specified exclusions. These exclusions include wear and tear, gradual deterioration, rust, inherent vice, and mechanical breakdown or derangement, war and nuclear hazard, damage resulting from handling the bicycle or repairing it, unless the loss is caused by fire or explosion. A deductible of $5.00 applies to each claim regardless of the number of bicycles involved in the claim.

Conditions

The bicycle floater provides for recovery on an actual cash value basis. If an insured bicycle or is stolen, the insured is required to notify the police. Coverage applies only within the limits of the continental United States, Hawaii, Puerto Rico, and Canada. Coverage may be written for one year, or for a period of three years for three times the annual premium.


Underwriting Personal Articles Floaters

Of all floaters written for personal property, the personal articles floater or its equivalent endorsement attached to the homeowners policy is the most common. The following section about underwriting concentrates on the classes of property commonly insured by that form. One of the concerns about many of the forms of personal inland marine property is the volatility of the value of items. In the past two decades, the value of silver and gold has fluctuated greatly. The value of collectible gemstones fluctuates with the market and availability. The personal inland marine schedules should be monitored to keep values current with the market. If scheduled values fall far below current market values, the insured can lose if a loss occurs. Fluctuations also create an underwriting concern if the market value diminishes. An unscrupulous insured can create a fraudulent insurance loss.

Eligibility And Information Requirements When Personal Articles Floater insurance is written on the basis of an application signed by the insured, it is important that the applicant fully understands the importance of providing accurate and complete information.

The insurer must rely upon a signature as protection against moral hazard and fraud. Accurate information results in proper insurance and improved claim settlement when loss occurs. When insurance is written on forms involving scheduling, limits of insurance should be determined using current values. Receipts are valid for newly-acquired property (copies should be given to the insurer). Valuable property, such as paintings, other art objects, expensive jewelry and furs should be re-valued periodically. This will establish a proper amount for insurance purposes and eliminate problems in event of loss. So that lost or stolen property may be identified, a detailed description of scheduled articles is essential. Photographs of articles are recommended.

Underwriting Jewelry

Submissions for jewelry coverage should usually be accompanied by a recent bill-of-sale or a qualified appraisal from a gemologist or jeweler. A good jewelry description contains the following:

The general description, including the character of the metal and the manufacturer's name, if applicable

The weight and clarity of any stones


The color of the item

Flaws or degree of perfection of any stones The producer should become familiar with the appraisal requirements of the insurers represented and with qualified local appraisers to whom clients can be directed. In investigating the applicant, the underwriter reviews:

The applicant's credit history, to identify any financial pressure.

The loss history, including searching an underwriting/claims database (if available).

A comparison of the value of the jewelry to the home or salary of the applicant.

The extent of the applicant's travel, and the precautions taken to safeguard jewelry while the applicant is traveling; the care taken to protect jewelry left in the home while the applicant is away.

The underwriter evaluates the exposure to loss at the applicant's residence with an emphasis on the safeguards the applicant has taken to minimize exposure to theft.

Insuring jewelry requires careful underwriting. The potential moral hazard involved and the responsibility of the prospective insured are very important considerations. Even an insured who has satisfactory financial resources and is of high moral character may have the careless habit of misplacing or losing articles. Insurers may require that applicants have the personal recommendation of the agent or broker who produces the business. An application must usually be submitted containing full data as to the applicant's history, occupation, reputation and standing, financial capacity, etc. If the applicant has more than one occupation, all should be given. Companies also require the original bills of sale or a complete signed appraisal (at the applicant's expense) from a reputable jeweler. The appraisal must also show the physical condition of the property at the time of the appraisal. Jewelry known to be in need of repair, and stones in need of resetting are not usually accepted until restored or repaired. The underwriter will frequently look at whether the jewelry schedule is in line with the client's lifestyle. If an insured's occupation appears to subject him or her to abnormal risk of theft, the underwriter may choose not to insure the jewelry. Depending upon the underwriting guidelines of a particular insurer, most will accept risks with extra jewelry values. Once the total schedule exceeds the guidelines, the underwriter should be contacted for authorization and perhaps for an excess rate. Some companies also have a limit on the value of any one piece of jewelry in the collection. The insurer will evaluate the prospective insured, any safety precautions taken by the client with regard to the jewelry, and the quality of the schedule itself. Most insurance companies are looking for clients who are prudent, average, everyday citizens. Since jewelry readily lends itself to insurance fraud, many times the underwriter will need information the client may perceive as an infringement on his or her privacy. The underwriter needs as clear a picture as possible of this person and his or her lifestyle. Often underwriters hesitate to write expensive jewelry, particularly rings, for men, because men are perceived to be less careful about jewelry than are women. Another consideration is that a man's diamond ring is frequently larger than a woman's and more prone to attract attention.


The insurer may require extra safety precautions. The underwriter may inquire where the jewelry is kept when not being worn, and if the client has a central station alarm. Local alarms are usually not considered good enough. Underwriters are often faced with items of extremely high value. Those items can be insured for a reduced premium if the policy is endorsed to provide that they will be kept in a bank vault or a vault in a non-bank security facility. The insurer must then be given advance notice if the items are to be removed from the vault. The insured pays an additional premium for the time that the articles are out of the vault. The insurer may require that large individual items be kept in a bank vault when not being worn, and will usually offer a rate credit in exchange for this promise. The insured must notify the company before removing the item and again when it has been returned to the vault. Notifying the agent meets the terms of this requirement. The agent should stress the importance of this requirement to the insured. If the client does not notify the company that jewelry has been removed from the vault and a loss occurs, some company endorsements eliminate coverage completely; others will pay only a percentage. Usually, the company will not charge any extra premium for the short time the piece of jewelry is out of the vault, unless there is a loss. If a loss occurs to jewelry out of vault when the insured has failed to notify the company, there is coverage under the homeowners policy (subject to the applicable perils, limits, and exclusions). The homeowners policy excludes coverage for "articles separately described and specifically insured in this or other insurance." But, when the item is out of the vault under these circumstances, it is not "specifically insured." It is not enough, for purposes of excluding coverage, that the item is "separately described." The purpose of this limitation is to avoid a double recovery by the insured, and there is no danger of that in this situation. An insurer may, as well as requiring jewelry be kept in a vault, use a different rate for large items. Through use of a "consent to rate" form, by which the insured agrees to a different rate, an insurer can increase the premium proportionately with the perceived risk. Another method of controlling the exposure the insurer may use is to cushion itself from a large jewelry loss through the use of a deductible. However, this is most effective on a schedule with a large number of pieces. Placing a $1,000 deductible on a $50,000 ring will not mitigate a loss, except for the loss of a stone from the setting. The agent should carefully explain the deductible to the insured. The underwriter will also consider the quality of the schedule itself. The agent should check with the company for its appraisal requirements. For items under a certain dollar amount a description of the item is often enough. For larger items most companies require an appraisal from a reputable jeweler or certified gemologist. There are two appraisal systems currently in use in the United States. These are the American Gem Society (AGS) and the Gemological Institute of America (GIA) systems. Acceptability A problem often arises when attempting to properly establish the value of jewelry or furs for insurance purposes. When coverage is first written, the agent should provide the insurer with a sales receipt or an appraisal of the item that documents its current value. This information may be copied and the originals returned to the insured once the amount of insurance is determined. Any previous losses should be thoroughly documented, getting complete information on what


was lost, how it was damaged, whether the property was replaced, and even how the settlement amount was determined. Personal jewelry and furs insurance should be sold only to persons who meet all necessary underwriting standards. Rate and Premium Jewelry and furs rates used by numerous companies are established on a territorial basis according to loss experience in each area. They are reviewed periodically and are subject to change. By way of comparison, jewelry rates are usually at least three times more than the rates applicable to furs in the same area. This reflects the fact that jewelry is a more popular class of expensive property and is more vulnerable to loss (because of its size-to-value ratio). Rates can vary significantly among different insurers, but premiums typically offered are around one or two percent of the item’s value (subject to minimum premiums).

Underwriting Furs

A primary consideration in insuring furs is the moral responsibility of the prospective insured. Companies usually restrict this protection to people of high integrity with satisfactory financial resources, and require either a personal acquaintance on the part of the agent or broker or satisfactory references. The insurer usually requires information regarding the insured's background and occupation or source of income. When insuring furs, the agent needs to be aware of the insured's lifestyle. Often furs are ready targets for thieves and vandals. The price of furs often varies more than the price of other types of clothing. Many companies will require new appraisals of furs regularly. The insured must understand that furs are "high ticket" items that depreciate dramatically. Insuring a new mink coat for $10,000 will probably result in a much lower settlement than anticipated should a loss occur. For new risks, companies generally require a completed and signed application containing a statement showing when and where the insured furs were purchased and the price paid for them, or an appraisal by a reliable furrier. On renewal this is not always required. Most insurance companies will not permit furs to be covered for more than the original purchase price regardless of the garment's present appraisal value or the fact that it might have been purchased at some special price. Many underwriters prefer to have the bill of sale, even when an appraisal is furnished. Underwriters tend to pay closer attention to a high-valued, single item fur. Some companies specify that furs be depreciated 10 to 15 percent per year unless a new appraisal is furnished. Occupation can be an underwriting factor. Applicants who travel frequently have an increased exposure for those items they take with them and those items left in an unattended home.

Underwriting Cameras

This class of property requires very careful selection by the producer and the underwriter. Applications for coverage should be checked for indications of any unusual or unwanted loss exposures. It is important to ask the right questions about the cameras and equipment. Of


course, the extent of additional information pursued should be related to the type and extent of the property to be covered. Items to consider are: How the equipment is used Normal personal use is expected, but it makes sense to avoid persons who are obsessive about securing dangerous photos or footage. The type of equipment Equipment that is used for regular purpose is desired. You may wish to avoid persons who own equipment that may represent unusual use or exposure. There may be an acceptable explanation, but documentation is critical. The value of the equipment A person who owns many thousands of dollars’ worth of new, state-of-the-art equipment may be a warning flag. It may indicate a professional photographer who needs to buy commercial insurance. The fact that his or her application shows some other full-time job is no reason to assume that a professional exposure doesn’t exist. A part-time or free-lance professional photographer should not be written under a camera floater policy. The extent of the equipment This is also a good indicator of the exposure you’re being asked to write. An unusually high amount of processing equipment and materials could indicate that you’re dealing with a professional. Even if he or she is an amateur, you should determine whether you are comfortable with the insured’s set-up. Is there a separate darkroom? Where is it? Are processing chemicals stored safely? Does the hobbyist safely operate his equipment? It is very important to ask enough questions to determine the true exposure. The insured’s or applicant’s loss history Any loss information should be fully developed, especially details that might provide underwriting insight on the insured’s camera hobby. Two camera equipment owners may have experienced two theft claims in the last two years. There’s a difference between owner A, who still keeps much of his equipment if full display in his home and garage, and owner B, who installs a central alarm system and keeps all of his equipment in a room dedicated to his hobby. Loss details could also reveal other concerns. When insuring camera equipment, insurers are looking for someone who is careful with his or her property and who can afford photography as a hobby. The exposure presented by a professional photographer is not contemplated in the rates. Camera coverage provided by the personal articles floater is intended for cameras used nonprofessionally. The first question an underwriter must ask is whether the camera equipment is used professionally. The key to deciding whether a professional exposure exists is whether the insured receives remuneration for the photography. The primary causes of loss to camera equipment are theft, unexplained disappearance, and breakage. The chance of loss from those perils increases away from the owner’s residence.


Important underwriting factors are:

The applicant’s travel habits,

The value of the equipment normally taken while traveling, and

The applicant’s loss history.

Underwriting Musical Instruments

Prospects for Musical Instruments floater insurance may be found among the following: Individuals, bands, civic groups, colleges, fraternal orders, lodges, musicians, orchestras, school boards, schools, universities, and veteran’s groups. The privately owned instruments of members of either professional or amateur orchestras or bands may be insured under one policy either with or without the instruments belonging to the organization. Each such privately owned instrument must be specifically scheduled with a complete description, the owner’s name, and amount of insurance to apply to it. Company underwriting practice, however, varies with respect to dance (a.k.a. club or bar) bands. Sometimes they are eligible for coverage only on a limited basis. Consult your supervising office on all such risks. These risks have a much higher exposure to loss due to the activities surrounding their performance (particularly when alcohol is served) and at the locations where they may perform. Some locales may have a higher theft hazard. The underwriting process is similar when evaluating both cameras and musical instruments. The instrument's type and use should be considered. A grand piano has less theft exposure than a violin. A keyboard with extensive sound amplification equipment indicates that it is being used in a rock group. Musical instruments played in the local school band and instruments used for hobbies are probably the most common exposures that underwriters encounter. Such instruments are subject to fewer losses than other musical instruments because they have relatively low values and because school personnel usually lock music rooms to protect the instruments.

Underwriting Silverware

Silverware is similar to jewelry in that it is made of precious metals, but its exposure to loss is much less than that of jewelry. Silverware is generally harder to dispose of than jewelry, so it is relatively easy to underwrite. In the early 1980s, the price of silver skyrocketed from $7 a troy ounce to $55 a troy ounce. Silver became a target for theft, and scheduled values had to be increased substantially to keep pace with the replacement cost values. The price of silver has since stabilized, and so has the underwriting of silver. The total value of the scheduled silverware normally dictates how much underwriting is required. The location of the residence, fire protection, and security devices or systems are primary underwriting concerns.

Underwriting Golf Equipment

Insurers asked to review a substantial golf risk may be concerned with any moral hazard since coverage is typically written on a blanket basis. Although certain types of golf equipment are expensive, particularly the various types of clubs and bags, the bulk of any aggregate golf


property consists of smaller, less expensive property such as balls, clothing and minor accessories. To minimize adjustment and coverage problems, care should be taken to gather proper information on the less expensive property so that appropriate items are written on a blanket basis. Exceptionally expensive items, such as custom or specialty clubs, should be scheduled at agreed values, with the insured amounts being supported by receipts or appraisals. Other important underwriting considerations include:

Acquiring information on coverage available from the clubhouse where the insured usually keeps his clubs and equipment

What golf property is typically kept at home and what is kept at another location (golfing club)

Information on security at a golfing club

Loss experience of the applicant, particularly regarding golf-related losses

Loss experience of location where scheduled/insured golf equipment is typically kept

Does insured travel frequently with covered golf equipment

Is there evidence that an insured is a golf professional

Length of time insured has been a golfer Again, experience and other coverage are meaningful compensating factors. Rate and Premium Annual rates charged vary by insurer and are usually based on some modest amount per $100 of coverage. Premium amounts are generally the same whether items are scheduled at agreed values or are covered on a blanket basis. Golfer's equipment is covered under the contents coverage of the homeowners policy without limitation and includes enough perils to cover most probable losses. A nonprofessional golfer who is active enough in the sport to have invested $ 1,000 to $3,000 in equipment might want coverage. The purchase price information and appropriate descriptions of the property (including any serial numbers) are usually all that is needed to verify its value.

Underwriting Fine Arts

Other concerns about fine arts, such as stolen artwork and reproductions, receive additional mention, as follows. Stolen Artwork

Auction houses, galleries, and dealers sometimes find themselves unknowingly distributing stolen artwork. Thieves target lesser-known works of famous artists, which have not been photographed and published widely. The International Foundation of Art Research (IFAR) is an organization that catalogs stolen artwork and assists law enforcement agencies internationally in searching for stolen objects. Major certified art appraisers have access to that system. However, art purchased from small, non-certified appraisers and dealers stands a chance of being stolen. If the object is discovered years later, a court battle could result between the current "owner" of a stolen piece of art and its original owner.


Reproductions

The nostalgia interest in American memorabilia has brought with it people who are creating reproductions to help meet the demand for memorabilia. Reproductions are appearing in all areas of American collectibles. Reproductions can be valuable, but they are not as valuable as originals. Reproductions should not be mistaken for high-value originals. Experts detect the reproductions by identifying differences in the molds and patterns. A knowledgeable dealer should review any large collection to verify its actual value.

Stamps and Coins

Underwriting stamps and coins focuses on the property's value and its possible exposures to loss. Stamp and coin collectors are generally proud of their collections and exercise a high degree of care to prevent loss or damage to the property, especially when the collections include rare items that are not easily replaceable. Items are typically listed in catalogs, and the collections are frequently kept in a fire-resistive safe to minimize the exposure to theft or fire. Underwriters should also consider home security features, such as alarm systems, in light of a collection's total value. Collectors often attend stamp or coin exhibitions, which involve exposures away from the residence premises. The underwriter should determine how frequently the insured's collection is exhibited, how the items are being transported, and what safeguards are used while the property is on exhibit. Acceptability The best prospects for Stamp and Coin Collection Floater insurance are individuals who seriously collect stamps or other philatelic property or coins or other numismatic property. Most earnest collectors take pride in their special property, often exercising great care in handling and protecting their collections. Applications for the insurance should be rejected where there is any indication of a moral hazard. Policies may not be issued to dealers, auctioneers, societies, clubs, organizations, or in other instances under which insurance or replacement property is granted to or enjoyed by individuals under an insurance certificate (group coverage). However, subject to individual company requirements, a policy may be issued to stamp, coin, or similar societies to cover special exhibitions IF the event is held under the name and supervision of an insured. Coverage is typically only available in the name of two or more persons when the insureds are related and reside together. Property that is jointly owned by two or more unrelated parties can be problematic to handle in the event of a loss. Requests to provide coverage on a blanket basis should be carefully reviewed, making certain that the amount of insurance requested is in line with the actual cash value of the property. Specific description of major items with the balance covered on a blanket basis is often a smart coverage option. Underwriting Guidelines It is important to get a complete list of the items to be insured under stamps or coins separately. For bulky items or large collections, it is not essential to schedule each item, but it is necessary to obtain a description and values of the items insured, and to store the information in agency


and/or company files. Values for this class of property fluctuate by nature, so it is important to review insurance limits at least annually. Owners of collections of substantial value often keep the property in fireproof safes or vaults. Such use is a valid suggestion when considering applicants or insured who do not use special safeguards or precautions. In order to avoid or minimize customer disappointment, any special property limitations should be fully explained, such as loss involving:

Mysterious disappearance, theft from unattended automobile

$250 valuation on certain limits

Transportation Problems can be avoided by discussing such basic limitations with the insured when coverage is arranged. Rate and Premium Annual rates in widespread use typically are quoted per $100 of insurance; $.45 or greater for stamps, and $1.25 or greater for coins may be found in the insurance market. Credit premiums (typically 10%) is applied to the total premium if a fireproof safe or vault is used to store the property. Sometimes an insured has to agree that a minimum level of covered property is always kept in the safe or vault (such as 75%).

Residential Security Systems

Throughout the review of inland marine exposures and coverages, residential security systems have been mentioned as desirable for insureds who have large collections or highly valued items. A home burglary occurs in the United States every fifteen seconds, for an estimated 2 million burglaries annually. The need for residential home security for a residence with valuable property is mandatory. Professional thieves seek the path of least resistance when they select a home for robbery. Target neighborhoods are those that can be accessed easily from major highways and roadways. Homes are selected that require the least amount of time to enter undetected. Thieves prefer homes having the following features:

Privacy fences or bushes that cover windows or cover the view from the road

Windows that slide up from the bottom

A lack of lighting inside or outside (or a spotlight that creates a glare that thieves can hide behind)

Thieves avoid homes with the following loss prevention features:

Deadbolt locks.


Alarm systems (they can identify the fake stickers in homes that have no alarm).

Open view from the street and neighbors.

Homes lighted inside and outside, if the lighting covers enough of the yard and house to make detection easy. Thieves avoid homes lit on the inside with no covering over the windows.

Crime watch neighborhoods. In protecting a house from a break-in, homeowners should consider how they would get into their homes if they lost their keys. If entry requires breaking only one window, entry is easy for a thief (and the thief would be much less reluctant to break a window than the owner). Assess Security The underwriter should assess the security the insured uses to protect his or her home. By inspecting doors, windows, and locks, the underwriter can determine whether the home is properly protected. Doors

Doors are the most obvious barriers to theft. Residences normally have solid wood doors, metal doors, or doors that have glass panel insets. When windows are set in the doors or along the side of the door, extra precautions are required. A wire mesh screen can be sandwiched in the glass, or the door should be equipped with a double cylinder deadbolt lock that requires a key to open the door from both sides. Without one of these, access into the home is easy. Windows

Glass windows require additional physical or electronic protection for safety against burglary. Protective glazing normally used in residences is tempered glass that is five times as resistant to breakage as plate glass. Windows can be in metal frames for added protection. A window lock should be placed so that it cannot be easily accessed through a broken windowpane. Windows can be secured with electronic sensors that detect the opening of a window. These sensors are part of the alarm systems that will be discussed later in this chapter. Locks

Some locks that are commonly installed in residences deter break-ins. Following are descriptions of locks that provide such protection.

Deadbolt locks

Deadbolt locks have a latch that cannot be manually pushed back into place - without a key. A lock with such a bolt is a deadlock.

Deadbolt locks usually have a square latch bolt that cannot be pushed into the lock by closing the door. The lock is given its name because once the bolt is extended, it is "dead" and cannot be pushed back into place. Other locks, such as spring locks, have a beveled or rounded edge that allows the striker plate to force the latch bolt into the lock


each time the door is closed. This spring action also allows the door to be opened if a credit card or comb is inserted between the door and the jamb. Conversely, the deadbolt requires a key to open and close the latch bolt. The doorjamb into which the bolt slides should be secured into the supporting frame by screws so that the door cannot be kicked in and the doorjamb broken.

Single-Cylinder Deadlocks

Single-cylinder deadlocks require a key to open from the outside but can be opened with a latch from the inside. They afford no protection from exiting premises through the door after gaining entry by other means. These locks are not preferred where glass is present in or beside the door, since the glass can be broken and the lock can be turned from the inside.

Double-Cylinder Deadlocks

A double-cylinder deadlock requires a key to open or close from either side, making exiting the premises as hard as entering. This is also an effective lock for a door with glass window or glass sidelights. Even if the window is broken, the burglar cannot reach inside and unlock the door.

Mortise Double-Cylinder Deadlocks

A mortise lock is designed to be installed in a cavity made within a door rather than applied to the door's surface. Mortise double-cylinder deadlocks offer excellent protection if the deadbolt is long enough to prevent prying the door away from the jamb. This lock often appears on aluminum frames, which are easily pried open. The deadbolt should be at least one and one-half inches on such doors to prevent entry.

Alarms

Alarms are recommended when there is property of considerable value in a home. Consideration should be given to the attractiveness of the valuable items to a potential thief. Detection systems can also include alarms that notify a fire department in the event of a fire.

Underwriters Laboratories

Underwriters Laboratories (UL) tests and certifies electronic devices, alarm systems, and many other items for safety and accuracy of operation. An Underwriters Laboratories Certificate is issued for all UL-approved alarm installations. A certificate number, the date installed and certified, and the type and kind of installation are provided whenever an installation of this type is certified. Premises alarm systems are classified A, B, or C as follows:

Class systems must have sufficient staff for two guards to respond to all alarms in an average elapsed time of not more than ten minutes.


Class B systems must have sufficient staff for one guard to respond to all alarms in an average elapsed time of not more than fifteen minutes.

Class C systems must have sufficient staff for one guard to respond to all alarms in an average elapsed time of not more than thirty minutes.

Alarms systems are rated 1, 2, or 3 as follows, based on the extent of protection:

o Installation #1 is a system protecting all building openings and vulnerable exterior walls.

o Installation #2 is a system protecting all building openings. It also provides motion

detection inside the residence. o Installation #3 is a system protecting all building openings and provides a web of

motion detection sensors that is more extensive than that of #2. Local Alarms

A local alarm is a detection device connected to a bell, siren, or gong on the exterior of the premises. The detection device must be connected to the bell or alarm by a tamper-proof cable. The alarm appliance should be capable of providing an output of at least eighty-five decibels at ten feet to be effective in alerting neighbors. This alarm is not effective for a residence in an isolated area. Central Station Alarms

A central station alarm is a detection device connected to an alarm receiving station by leased telephone wires or by home telephone lines with a preemptor that disconnects any telephone call and dials the central station when the alarm is activated. The receiving station is staffed by a security company that dispatches guards and notifies the police when an alarm is received. Protected premises must be within fifteen minutes' traveling time from the central station to be effective. Underwriters Laboratories certifies alarm companies as well as alarm system components. A UL certified alarm system has to have all UL listed components installed in accordance with their listings by a certified alarm company. UL inspects installations by certified alarm companies and reviews their response to alarms to make certain they perform up to UL's standards. Proprietary Alarms

A proprietary alarm is like a central station alarm, but the receiving station is usually on the premises and staffed by security guards employed by the premises owner. The guards respond to all alarms.

In the event of a break-in, a local alarm creates a loud clamor that can be heard only at the premises.

In the event of a break-in, a central station alarm contacts a security company that responds to the residence and contacts the police.


In the event of a break-in, a proprietary alarm notifies a security guard on the premises, who responds.

Police Connection

A police connection is a detection device connected via telephone or private lines to a local police station. It is sometimes used in combination with a local alarm or proprietary alarm system. Because the size and value of items insured in residences can become large, home security becomes an important underwriting consideration. Locks and alarm systems are not foolproof, but they can delay or discourage an attempted break-in. Floaters written to cover personal property are almost always written on an "all risk" basis. Common exclusions are wear and tear, gradual deterioration, damage caused by animals and insects, and inherent vice.


Inland Marine Appraisals

Scheduled coverage for special property centers around documenting the property’s value. An important method of valuation is the use of appraisals. An appraisal involves use of a knowledgeable source to examine a piece and then use his or her judgment to determine the piece’s current replacement cost. The level of individual judgment reflected in an appraisal has a direct relationship with the value of item or items being appraised. Technology has an increasing impact on the ability to quantify certain features and apply them to a given item. Unique features and elements of a given piece bear greatly on its value.

Appraisals supplement the inventory process. An inventory should assist an insured’s knowledge about the property (s)he owns, provide proof of the property’s existence, help determine the property’s value, and provide details that aid in recovering lost or stolen property. An appraisal helps establish value, which helps with securing proper coverage.

General Appraisal Information

A number of elements are always part of an appraisal, whether it involves an oil portrait or an emerald necklace. Common items include:

Identifying owner information: o Full Name o Street Address o City, State/Province, Zip/Postal Code

Detailed description (of the item that is to be evaluated): o Current Condition problems o Previous restorations o Previous repairs o Existing cracks o Other visible “problems” o Hidden problems of which the owner is aware

Special Features: o Documentation concerning physical item o Background information that may affect value

Photographs of the object:


o Including views of problems or special features o Should be higher quality, color photographs (at least 35mm)

Item Documentation: o Dated receipts o History o Old appraisals o Other pertinent written documentation o Recorded with special property registry

Information on the party performing the appraisal including: o The appraiser’s experience o Relevant certification or qualifications o Additional comments about the articles (in addition to items on the form) o Whether the appraisal is guaranteed

Jewelry Appraisals

Diamond values are based on quality – the “four C’s” of diamonds – cut, color, clarity, and carat weight. As carat weight increases, diamonds become rarer and more expensive, regardless of stone quality. A one-carat diamond is eleven times more valuable than a one-quarter-carat diamond of equal quality. The "four C's" that affect the value of a diamond are cut, color, clarity, and carat weight.

"Cut" refers to the quality of the cutting itself, rather than the shape, which means, for example, round, pear, or marquise (also known as fancy shapes). Cut is so important that a diamond's value may be significantly affected. Consequently, a larger diamond may be less valuable than a smaller well cut diamond.

"Color," the next of the "four C's," refers to the presence of color in a diamond. A colorless stone is rarely seen and is quite valuable. Most diamonds on the market have a trace of yellow, gray, or brown. The color of a diamond can be enhanced and an appraisal should note this.

"Clarity" refers to the presence of blemishes on the surface of the diamond, or inclusions within it. A flawless diamond is extremely rare; most diamonds readily available contain one or more flaws. If a stone's clarity has been enhanced, this must be disclosed on the appraisal.

Finally, "carat" refers to the weight of a diamond. One carat equals .2 gram. Carat weight has the most impact on value.

Jewelry appraisers may vary greatly in their abilities. A certified gemologist has completed course work and passed examinations. If uncertain, the client can contact the American Gem Society (702-255-6500; http://www.ags.org), or the National Association of Jewelry Appraisers (301-261-8270; P.O. Box 6558, Annapolis, MD 21401-0558) for the name of a reputable appraiser in their area. Members of both organizations agree to abide by a strict code of ethics.


Often clients are hesitant to leave their jewelry out of their sight for an extended time while it is being appraised. This is a legitimate concern and can be handled by using a reputable jeweler in the area who will perform the appraisal with the insured present. The second is a somewhat new method. There are also firms that, for a flat fee, will come into a client's home and do appraisals. This may ease the client's mind about the safety of his or her jewelry.

Besides the general items, a jewelry appraisal should also include:

Item’s height or length

Item’s width

Item’s depth

If the piece is round, its diameter

Description of setting, type of precious metal, precious metal content

Appraisals are used to describe jewelry items and to establish their value. An appraisal is usually required on jewelry items worth $500 or more. Even if an appraisal is not required, a complete and accurate description of the items of jewelry is extremely important. The value of diamond rings varies greatly, depending on the quality of the stones. The adjuster can exercise the loss settlement option of replacing the item rather than pay the face value shown on the schedule. An insurance company can replace diamond jewelry for 50 percent of the retail value. Equivalent property refers to articles that are “substantially identical.” The replacement feature of the personal articles floater allows an insurance company to settle a loss by providing an item of equivalent property. A complete description of a piece of jewelry begins with a detailed description of the item and specifies whether the item is designed to be worn by a man, a woman, or either. A detailed appraisal specifies the value of each stone and the type and weight of the metal. Diamonds have an extremely high markup from the wholesale market (which insurance companies can access for replacements) to the retail market. Metals and Alloys

Each jewelry item is mounted in gold, silver, or platinum, and the value of each mounting is primarily based on the weight of the metal and the workmanship. Gold is measured in karats (k) and pennyweight (dwt) or grams. An appraisal should specify the type of metal and its weight. Because gold is soft and wears away quickly, it is usually found in the form of an alloy, which means it is mixed with other materials. The higher the gold content, the more valuable the piece.


The following descriptions appear frequently on jewelry appraisals:

24 karat gold is pure gold

18 karat gold is 75 percent pure gold (18/24=75%)

14 karat gold is 58 percent pure gold (14/24=58%)

31 grams is 1 troy ounce Other items used in describing metal used in jewelry are as follows:

What is generally considered solid silver is often described as “sterling silver,” which legally means 925 parts of silver with 75 parts of copper. Sterling is often stamped with the number “925” or the word “sterling”. “Silver plate” is a thin plating of silver over another metal and is much less valuable than sterling silver.

“Gold filled” and “vermeil” refer to a gold plating that is placed over another metal. “Vermeil” usually means a gold plating over sterling silver.

The method of mounting should also be considered: Platinum is often used to form the prongs that secure a large stone to the ring band. Platinum alloy is a very durable metal (and it has the added feature of a white color, which accentuates the color of the diamonds). A diamond’s security depends on the number of prongs holding it in place. Five or more prongs provide more security for the stone than four. “Channel set” diamonds are set in a groove in the ring or other jewelry. The ridge along the groove holds the stones on two sides. A “bezel” setting is a ridge surrounding a single stone. Channel and bezel settings are very secure. Colored Stones Colored gemstones (such as sapphires, rubies, and emeralds) can be appraised by cut, clarity, and carat weight in the same way diamonds are; however, more emphasis is placed on color than on the other gemstone qualities. With diamonds, the whiter and clearer, the better. In contrast, with colored stones, richer color is better. The value of colored gemstones is also based on their transparency or translucency. Colored stones are described using names such as Siberian emeralds and Kanchanaburi sapphires. Color names are also used, such as a cornflower blue sapphire, a pigeon-blood ruby, or a smoky topaz. These names are important in helping to identify jewelry items and values. It is also important to know whether a stone has been treated to intensify the color. Some processes, like irradiation and heat treatments, intensify and change the natural color of stones. Unfortunately, treated stones can later lose their color. Natural stones are much more valuable.


Pearls

An appraisal for pearls should indicate the size, luster, and color: white, pink, cream, gold, or black. Pearls can also be irradiated to change their color. Pearls come in the following shapes:

Cultured pearls and natural pearls are usually round

Baroque pearls or mabe pearls have irregular shapes

Freshwater pearls are irregular in shape and have bumpy surfaces

A half-pearl has a broken surface The description should include the type of the jewelry item, including its length. Pearls are strung either in uniform size or in graduated sizes.

Fur Appraisals

New furs can be valued at the purchase price established by a bill of sale, but proper valuation of older furs depends a great deal on their condition. Depreciation tends to decrease a fur’s value, however, inflation tends to increase the value of an older fur. For fur garments more than one or two years old, current appraisals are essential and are provided by furriers. The value of furs depends largely on the following three factors:

1. The garment’s condition 2. The accuracy of the appraisal of the garment’s value 3. The changing popularity of furs and the variability of prices in the garment trade

Despite price fluctuations, the sales price of the garment is usually the best substantiation of value.

Silverware Appraisals

Silverware can be written on a scheduled basis, blanket basis, or combination basis. Underwriters usually require expensive pieces or sets of silverware to be individually scheduled, allowing blanket coverage for the miscellaneous, lower-valued pieces. The descriptions on individually scheduled items should include enough detail to readily identify the property for valuation or replacement. They should include the number of pieces, the manufacturer, the type of items, and the individual pattern. Besides the general items, silverware appraisal should also include:

A description that includes complete details on marks found on a piece’s back or bottom

A description of any decorative motif

Number of each piece owned

Name of manufacturer An appraisal should not be a mysterious document to an insured. A policyholder could benefit by a trip to a bookstore or library for books that contain helpful information on identifying marks, patterns, nomenclature (terms particular to class of property), motifs and, certainly, value.


Fine Arts Appraisals

Because fine arts are unique and are automatically written on an agreed value basis, value substantiation is important. Most insurers require an appraisal by an expert in that field of art for an object with a value exceeding $1,000. Members of national organizations such as the American Society of Appraisers and the American Appraisal Association are good sources. Local museum curators, members of auction houses specializing in fine arts, and local dealers are also good sources for expert opinions on the value of an object. The artist who provides an appraisal on his or her own work is not a good source. Fine arts are generally not replaceable, so a detailed description of the property is important to substantiate the value at the time coverage is issued. An appraisal should include the following information:

Artist

Type of painting (such as oil on canvas)

Setting or title of picture

Style of furniture (such as Chippendale, Queen Anne, or Louis IV)

Date of origin

Distinguishing features and marks

Condition of object

Antique Furniture Appraisals

Descriptions should include the following specifics:

Style

Furniture type

Furniture decorative motifs (on carvings or chair backs)

Feet and leg style

Type of wood or wood veneer

Stamp and Coin Appraisals

Because individual stamps or coins do not usually involve high values, appraisals are generally not requested to substantiate value. Nationally recognized stamp and coin catalogs published regularly list the values of most stamps and coins based on their condition. Conditions range from “proof” or “not circulated”, which indicates purchase directly from the United States Mint or United States Postal Service, to “good,” fair,” and “poor.” Most collectors use the catalogs and the condition of the items to estimate the values of their collections, which are usually adequate for insurance purposes. Professional appraisals are used to verify the quality and condition of high-value stamps or coins. Some stamp and coin dealers sell items at inflated prices or represent coins as having a better condition than they actually do. A professional appraisal can identify such inflated values.


Camera Appraisals

Specific appraisals on individual items are normally not required. The value of most cameras and other photographic equipment can be readily determined. Current prices are usually available. When scheduling cameras, a receipt showing what the insured paid for the item is usually enough. In some instances, it may be necessary to furnish evidence of the value of property to be insured. A full description should be obtained for each scheduled item, including the manufacturer, model and serial number, and date of purchase.

Finding a Qualified Appraiser

Unlike many other professions, there are no mandatory licensing or registering of appraisers. Therefore, some care should be taken in determining whether a person is qualified in evaluating the property under question. There are some societies, such as the American and International Societies of Appraisers. Some are reputable and are active in creating standards and peer review regarding their members’ abilities. Therefore, longer-term membership in a society or organization should be one indicator of qualification. Of course, there is such a wide variety of property that may require valuation that an insured should be suspicious of a generalist. In other words, a qualified person is much more likely to specialize in a fairly narrow area of knowledge. Or, if truly a generalist, a reputable one is more likely to render an initial opinion and then suggest a specialist for further evaluation. It always helps to ask questions in order to assess an appraiser’s expertise such as how long has he or she been an appraiser, what is the appraiser’s specialty, and what considerations go into the appraiser’s assignment of property value. Certainly references are helpful to establish an appraiser’s qualifications, so ask for them and actually check a few out. If the appraiser’s references include a variety of businesses, particularly banks or insurance companies, take the fact as a comforting sign. Finally, do not be shy to discuss fees. Appraisers are used for their expertise, but the price of their use must align with the value (or suspected value) of the property to be appraised. There is no point in finding a world-class jewelry appraiser to look at a ten-year-old class ring. It may also be helpful to consider how open an appraiser is to handling questions or explaining her findings. An appraiser who cannot help you to a better understanding of your property’s value may be of little practical use. An appraisal also indicates the appraiser’s credentials. Many appraisers can act as such by virtue of their professional experience. Other appraisers have studied a prescribed curriculum, passed tests, and gained professional certification from an appraisal association. Appraising involves an educated estimate of the value of jewelry. Trained professionals are more likely to determine a value within a close range. The higher the value of an item, the more important the certification of the appraiser becomes. One of the most highly regarded certifications in the jewelry appraisal field is the Graduate Geologist certificate offered by the Gemological Institute of America (GIA). The GIA has established standards of measurement and gradation of stones that provide a high degree of appraisal consistency. The GIA has established international standards for gemstone grading, especially for diamonds. All qualified appraisers should know those standards and include them in the description of the items on the appraisal. Stones of unusual color and/or high clarity are rarely found in a local


retail jewelry shop. If one appears on an appraisal, it is worthy of further investigation. Some appraisers upgrade the quality of the diamonds on an appraisal to justify higher retail price or to convince customers that they are receiving items worth more than the sale price they paid.


APPENDIX

HO 04 60 10 00

SCHEDULED PERSONAL PROPERTY ENDORSEMENT (WITH AGREED VALUE LOSS

SETTLEMENT)

SCHEDULE*

We cover the classes of personal property which are indicated in the Schedule above by an

amount of insurance.

This coverage is subject to the:

1. Definitions;

2. Section I - Conditions; and

3. Sections I and II - Conditions;

in the policy and all provisions of this endorsement.

Any deductible stated in this policy does not apply to this coverage.

A. Newly Acquired Property - Jewelry, Furs, Cameras And Musical

Instruments Only

1. We cover newly acquired property of a class of property already insured.

The lesser of the following limits applies:

a. 25% of the amount of insurance for that class of property; or

b. $10,000.

2. When you acquire new property you must:

a. Report these objects to us within 30 days; and

b. Pay the additional premium from the date acquired.

B. Newly Acquired Fine Arts

When Fine Arts are scheduled, we cover objects of art acquired during the policy

period for their actual cash value. However, we will pay no more than 25% of the

amount of insurance for fine arts scheduled. For coverage to apply for newly acquired

fine arts you must:

1. Report these objects to us within 90 days; and

2. Pay the additional premium from the date acquired.

C. Perils Insured Against


We insure against risks of direct loss to property described only if that loss is a

physical loss to property; however, we do not insure loss caused by any of the

following:

1. Wear and tear, gradual deterioration or inherent vice.

2. Insects or vermin.

3. War, including the following and any consequence of any of the following:

a. Undeclared war, civil war, insurrection, rebellion or revolution;

b. Warlike act by a military force or military personnel; or

c. Destruction, seizure or use for a military purpose.

Discharge of a nuclear weapon will be deemed a warlike act even if accidental.

4. Nuclear Hazard, to the extent set forth in the Nuclear Hazard Clause of Section I - Conditions.

5. If Fine Arts are covered:

a. Repairing, restoration or retouching process;

b. Breakage of art glass windows, glassware, statuary, marble, bric-a-

brac, porcelains and similar fragile articles. We cover loss by breakage if

caused by:

(1) Fire or lightning;

(2) Explosion, aircraft or collision;

(3) Windstorm, earthquake or flood;

(4) Malicious damage or theft;

(5) Derailment or overturn of a conveyance.

We do not insure loss, from any cause, to property on exhibition at fairgrounds

or premises of national or international expositions unless the premises are

covered by this policy.

6. If Postage Stamps or Rare and Current Coins collections are covered:

a. Fading, creasing, denting, scratching, tearing or thinning;

b. Transfer of colors, inherent defect, dampness, extremes of

temperature, or depreciation;

c. Being handled or worked on;

d. The disappearance of individual stamps, coins or other articles unless

the item is:

(1) Described and scheduled with a specific amount of insurance;

or


(2) Mounted in a volume and the page it is attached to is also

lost; or

e. Shipping by mail other than registered mail.

However, we do not insure loss, from any cause, to property in the custody of

transportation companies or not part of a stamp or coin collection.

D. Territorial Limits

We cover the property described worldwide.

E. Special Provisions

1. Fine Arts: You agree that the covered property will be handled by

competent packers.

2. Golfer's Equipment includes your other clothing while contained in a locker

when you are playing golf. We cover golf balls for loss by fire or burglary

provided there are visible marks of forcible entry into the building, room or

locker.

3. Postage Stamps includes the following owned by or in the custody or control of the "insured":

a. Due, envelope, official, revenue, match and medicine stamps;

b. Covers, locals, reprints, essays, proofs and other philatelic property;

or

c. Books, pages and mounting of items in a. and b.

4. Rare and Current Coins includes the following owned by or in custody or

control of the "insured":

a. Medals, paper money, bank notes;

b. Tokens of money and other numismatic property; or

c. Coin albums, containers, frames, cards and display cabinets in use

with such collection.

F. Conditions

1. Loss Settlement

Covered property losses are settled as follows:

a. Agreed Value

We will pay, for each article or property designated in the Schedule, the

full amount shown in the Schedule which is agreed to be the value of

that article or property. At our request, you will surrender that article or property to us if not lost or stolen.

b. Pair, Set Or Parts


If the scheduled article or property is a pair or set, or consists of several

parts when complete, we will pay the full amount shown in the Schedule

for that pair, set or complete article. At our request, you will surrender that article or property to us if not lost or stolen.

2. Lost Or Stolen Articles

In the event lost or stolen property is recovered and we have paid you the full

amount shown in the Schedule for that property, you will surrender that property to us.

3. Buyback Of Surrendered Property

We will, at your request, sell back to you, at a price you and we agree upon,

any class of property or scheduled article you surrendered to us to comply with the terms in Paragraphs 1. or 2. above.

4. Premium Adjustment

We will refund the unearned premium that applies to the scheduled article

after the loss or you may apply it to the premium due for the replacement of that article.


HO 04 61 10 00

SCHEDULED PERSONAL PROPERTY ENDORSEMENT

SCHEDULE*

We cover the classes of personal property which are indicated in the Schedule above by an

amount of insurance.

This coverage is subject to the:

1. Definitions;

2. Section I - Conditions; and

3. Sections I and II - Conditions;

in the policy and all provisions of this endorsement.

Any deductible stated in this policy does not apply to this coverage.

A. Newly Acquired Property - Jewelry, Furs, Cameras And Musical

Instruments Only

1. We cover newly acquired property of a class of property already insured.

The lesser of the following limits applies:


a. 25% of the amount of insurance for that class of property; or

b. $10,000.

2. When you acquire new property you must:

a. Report these objects to us within 30 days; and

b. Pay the additional premium from the date acquired.

B. Newly Acquired Fine Arts

When Fine Arts are scheduled, we cover objects of art acquired during the policy

period for their actual cash value. However, we will pay no more than 25% of the

amount of insurance for fine arts scheduled. For coverage to apply for newly acquired fine arts you must:

1. Report these objects to us within 90 days; and

2. Pay the additional premium from the date acquired.

C. Perils Insured Against

We insure against risks of direct loss to property described only if that loss is a

physical loss to property; however, we do not insure loss caused by any of the following:

1. Wear and tear, gradual deterioration or inherent vice.

2. Insects or vermin.

3. War, including the following and any consequence of any of the following:

a. Undeclared war, civil war, insurrection, rebellion or revolution;

b. Warlike act by a military force or military personnel; or

c. Destruction, seizure or use for a military purpose.

Discharge of a nuclear weapon will be deemed a warlike act even if accidental.

4. Nuclear Hazard, to the extent set forth in the Nuclear Hazard Clause of

Section I - Conditions.

5. If Fine Arts are covered:

a. Repairing, restoration or retouching process;

b. Breakage of art glass windows, glassware, statuary, marble, bric-a-

brac, porcelains and similar fragile articles. We cover loss by breakage if caused by:

(1) Fire or lightning;

(2) Explosion, aircraft or collision;

(3) Windstorm, earthquake or flood;


(4) Malicious damage or theft;

(5) Derailment or overturn of a conveyance.

We do not insure loss, from any cause, to property on exhibition at fairgrounds

or premises of national or international expositions unless the premises are

covered by this policy.

6. If Postage Stamps or Rare and Current Coins collections are covered:

a. Fading, creasing, denting, scratching, tearing or thinning;

b. Transfer of colors, inherent defect, dampness, extremes of

temperature, or depreciation;

c. Being handled or worked on;

d. The disappearance of individual stamps, coins or other articles unless

the item is:

(1) Described and scheduled with a specific amount of insurance;

or

(2) Mounted in a volume and the page it is attached to is also

lost; or

e. Shipping by mail other than registered mail.

However, we do not insure loss, from any cause, to property in the custody of

transportation companies or not part of a stamp or coin collection.

D. Territorial Limits

We cover the property described worldwide.

E. Special Provisions

1. Fine Arts: You agree that the covered property will be handled by

competent packers.

2. Golfer's Equipment includes your other clothing while contained in a locker

when you are playing golf. We cover golf balls for loss by fire or burglary

provided there are visible marks of forcible entry into the building, room or locker.

3. Postage Stamps includes the following owned by or in the custody or control

of the "insured":

a. Due, envelope, official, revenue, match and medicine stamps;

b. Covers, locals, reprints, essays, proofs and other philatelic property;

or

c. Books, pages and mounting of items in a. and b.

4. Rare and Current Coins includes the following owned by or in custody or

control of the "insured":


a. Medals, paper money, bank notes;

b. Tokens of money and other numismatic property; or

c. Coin albums, containers, frames, cards and display cabinets in use with such collection.

F. Conditions

1. Loss Clause

The amount of insurance under this endorsement will not be reduced except

for a total loss of a scheduled article. We will refund the unearned premium

applicable to such article after the loss or you may apply it to the premium due for the replacement of the scheduled article.

2. Loss Settlement

Covered property losses are settled as follows:

a. Fine Arts

(1) We will pay, for each article designated in the Schedule, the

full amount shown in the Schedule which is agreed to be the

value of that article or property. At our request, you will surrender that article or property to us if not lost or stolen.

(2) If the scheduled article or property is a pair or set, or

consists of several parts when complete, we will pay the full

amount shown in the Schedule for that pair, set or complete

article. At our request, you will surrender that article or property

to us if not lost or stolen.

(3) In the event lost or stolen property is recovered and we have

paid you the full amount shown in the Schedule for that property,

you will surrender that property to us.

(4) We will, at your request, sell back to you, at a price you and

we agree upon, any class of property or scheduled article you

surrendered to us to comply with the terms in (1), (2) or (3) above.

b. POSTAGE STAMPS OR RARE AND CURRENT COIN COLLECTION

IN CASE OF LOSS TO ANY SCHEDULED ITEM, THE AMOUNT TO BE

PAID WILL BE DETERMINED IN ACCORDANCE WITH PARAGRAPH

2.c. OTHER PROPERTY.

WHEN COINS OR STAMPS ARE COVERED ON A BLANKET BASIS,

WE WILL PAY THE CASH MARKET VALUE AT TIME OF LOSS BUT

NOT MORE THAN $1,000 ON ANY UNSCHEDULED COIN

COLLECTION NOR MORE THAN $250 FOR ANY ONE STAMP, COIN

OR INDIVIDUAL ARTICLE OR ANY ONE PAIR, STRIP, BLOCK,

SERIES SHEET, COVER, FRAME OR CARD.


WE WILL NOT PAY A GREATER PROPORTION OF ANY LOSS ON

BLANKET PROPERTY THAN THE AMOUNT INSURED ON BLANKET

PROPERTY BEARS TO THE CASH MARKET VALUE AT TIME OF LOSS.

c. OTHER PROPERTY

(1) THE VALUE OF THE PROPERTY INSURED IS NOT

AGREED UPON BUT WILL BE ASCERTAINED AT THE TIME

OF LOSS OR DAMAGE. WE WILL NOT PAY MORE THAN THE

LEAST OF THE FOLLOWING AMOUNTS:

(a) THE ACTUAL CASH VALUE OF THE PROPERTY AT

THE TIME OF LOSS OR DAMAGE;

(b) THE AMOUNT FOR WHICH THE PROPERTY COULD

REASONABLY BE EXPECTED TO BE REPAIRED TO ITS

CONDITION IMMEDIATELY PRIOR TO LOSS;

(c) THE AMOUNT FOR WHICH THE ARTICLE COULD

REASONABLY BE EXPECTED TO BE REPLACED WITH

ONE SUBSTANTIALLY IDENTICAL TO THE ARTICLE LOST OR DAMAGED; OR

(d) THE AMOUNT OF INSURANCE.

(2) THE ACTUAL CASH VALUE CONDITION IN PARAGRAPH

(1)(a) ABOVE DOES NOT APPLY IF, AT THE TIME OF LOSS,

COVERAGE C - PERSONAL PROPERTY COVERED IN THE

POLICY TO WHICH THIS ENDORSEMENT IS ATTACHED IS SUBJECT TO REPLACEMENT COST LOSS SETTLEMENT.

3. PAIR, SET OR PARTS OTHER THAN FINE ARTS

a. LOSS TO A PAIR OR SET

IN CASE OF A LOSS TO A PAIR OR SET WE MAY ELECT TO:

(1) REPAIR OR REPLACE ANY PART TO RESTORE THE PAIR

OR SET TO ITS VALUE BEFORE THE LOSS; OR

(2) PAY THE DIFFERENCE BETWEEN ACTUAL CASH VALUE

OF THE PROPERTY BEFORE AND AFTER THE LOSS.

b. PARTS

IN CASE OF A LOSS TO ANY PART OF COVERED PROPERTY,

CONSISTING OF SEVERAL PARTS WHEN COMPLETE, WE WILL PAY FOR THE VALUE OF THE PART LOST OR DAMAGED.



INDEX

A

Actual cash value ..................................... 50 Additional insureds ............................. 74, 78 Additional living expense .......................... 89 Agreed value ............................................ 22 AGS ......................................................... 97 All-risk ...................................................... 75 Antique ........................................ 5, 58, 113 Appraisal .................... 2, 5, 37, 66, 108, 113 Articles ..... 1, 4, 8, 10, 13, 22, 30, 32, 43, 46,

47, 51, 58, 59, 63, 69, 86, 91, 95 Automobile ......................................... 78, 79

B

Bands ...................................................... 53 Bicycle ................................................. 4, 93 Blanket ................1, 4, 30, 31, 49, 55, 70, 72 Breakage . 19, 20, 25, 47, 61, 64, 76, 84, 86,

117, 120 Bric-a-brac ............................................... 64 Broad ..................... 3, 23, 51, 52, 56, 60, 88 Building Additions and Alterations ........ 4, 84 Business property .................................... 10 Buyback ........................................... 23, 119

C

Cameras .. 1, 5, 8, 17, 24, 30, 31, 32, 47, 48, 81, 98, 116, 119

Canceling ............................................. 2, 40 Changes .............................................. 2, 40 Claims .................................. 2, 3, 39, 45, 54 Coin collections .................................... 8, 32 Coinsurance ............................................. 58 Collision ................................................... 53 Concealment ........................................ 2, 36 Conditions .... 2, 4, 16, 19, 20, 22, 24, 25, 26,

35, 43, 49, 71, 72, 77, 94, 113, 116, 117, 118, 119, 120, 122

Contents .................................................. 74 Coverage C ...................... 10, 11, 30, 31, 75 Creasing .................................................. 20 Credit ..................................................... 103

D

Deadbolt ........................................ 103, 104 Dealers .................................................... 61 Deductible ................................................ 93 Definitions ................ 3, 16, 24, 53, 116, 119 Denting .................................................... 20

Depreciation ............................... 21, 46, 112 Derailment .......................... 19, 25, 117, 121 Diamond ................................................. 109 Disappearance ............................. 21, 70, 71 Domicile ............................................. 77, 79

E

E&O .......................................................... 6 Earthquake ...............................................56 Eligibility ......... 2, 3, 4, 45, 50, 57, 59, 61, 95 Endorsement ............................ 7, 10, 11, 30 Endorsements .................. 2, 4, 6, 34, 41, 78 Ensuing ....................................................79 Excluded .................................. 1, 10, 40, 84 Explosion ........................... 19, 25, 117, 120

F

Fading .............. 19, 20, 25, 70, 71, 117, 121 Fine arts ..................... 8, 20, 32, 61, 62, 113 Fire ................... 19, 25, 47, 53, 80, 117, 120 Flatware ...................................................57 Floater 1, 2, 3, 4, 7, 8, 11, 13, 22, 30, 32, 33,

34, 43, 47, 51, 54, 58, 59, 63, 69, 80, 91, 93, 95, 102

Flood ........................................................53 Forms ............................................. 1, 13, 34 Fragile ......................................................62 Fraud ............................................. 2, 36, 72 Furs 2, 4, 5, 8, 17, 24, 32, 42, 46, 77, 83, 98,

116, 119

G

GIA ................................................... 97, 114 Gold ......................................... 57, 110, 111 Golf equipment ..................................... 8, 32 Gradual deterioration ........ 20, 43, 49, 52, 58 Guns ........................................................81

H

HO 00 15 ................................ 11, 47, 75, 82 HO 04 60 ... 1, 5, 6, 7, 11, 15, 16, 22, 23, 30,

116 HO 04 61 ... 1, 5, 6, 7, 12, 15, 16, 23, 24, 30,

32, 43, 63, 119 HO 17 31 ............................................ 11, 82 HO 3 .................................................. 11, 47 HO 5 .................................................. 11, 47 HO-15 ......................................................82


Homeowners .... 1, 6, 8, 9, 10, 11, 42, 43, 51, 57, 58, 59, 60, 63, 69, 74, 75

I

Individual Article Floaters ............... 4, 15, 92 Inherent defect ................................... 20, 70 Inherent vice .............. 20, 43, 49, 52, 58, 64 Inland marine floaters..................... 9, 14, 37 Insects ..... 18, 20, 25, 41, 43, 49, 52, 58, 86,

117, 120 Inventory .............................................. 3, 67 ISO .................................. 10, 11, 16, 47, 88

J

Jewelry 2, 4, 5, 8, 17, 24, 32, 42, 43, 44, 45, 77, 81, 83, 88, 95, 96, 98, 109, 116, 119

L

Liberalization ........................................ 2, 40 Lightning ............................................ 47, 53 Limited ...... 1, 3, 9, 18, 32, 42, 52, 53, 56, 67 Limited edition collectibles ....................... 67 Loss settlement ........................................ 49 Lost Or Stolen Articles ..................... 23, 119

M

Malicious damage .............. 19, 25, 117, 121 Memorabilia ......................................... 3, 67 Music ....................................................... 51 Musical instruments ... 8, 17, 50, 54, 81, 100 Mysterious disappearance ..................... 103

N

Newly Acquired Property ... 2, 17, 24, 43, 52, 82, 116, 119

Non-mobile .............................................. 56 Nuclear ............. 19, 20, 25, 40, 41, 117, 120 Numismatic ........................................ 31, 68

O

Orchestras ........................................... 3, 53 Oriental rugs ............................................ 67

P

Paintings ............................................ 60, 81 Pair, Set or Parts .................................. 2, 36 Partial ...................................................... 72 Pearls .................................................... 112 Perils 1, 4, 11, 18, 24, 40, 41, 49, 76, 84, 89,

93, 116, 120 Personal Articles Floater (PAF) .......... 15, 32

Personal effects ................................. 77, 78 Personal Effects Floater (PEF) .................15 Personal Property Floater (PPF) ..............15 Personal Property Replacement Cost 11, 30 Philatelic ...................................................31 Platinum ........................................... 57, 111 Policy period ............................................33 Premium ............. 4, 5, 23, 98, 101, 103, 119 Professional ................................... 103, 113 Proof ........................................................38

R

Rates ..................................... 33, 59, 66, 98 Real property............................................88 Receipts ............................................. 54, 95 Recovery ..................................................84 Replacement cost ....................................30 Residence ................................................83 Rugs ........................................ 3, 67, 68, 81

S

Schedule ... 1, 2, 4, 8, 16, 22, 23, 24, 27, 41, 90, 116, 118, 119, 122

Scheduled Personal Property Endorsement ............................... 1, 7, 8, 16, 30, 59, 69

Scratching ................................................20 Securities ....................................... 4, 10, 83 Security ...................................... 5, 103, 104 Settlement . 1, 2, 22, 26, 27, 36, 72, 78, 118,

122 Shipping ....................... 19, 21, 26, 118, 121 Silver ........................................ 57, 100, 111 Silver plate ....................................... 57, 111 Silverware ... 3, 5, 8, 30, 32, 57, 58, 81, 100,

112 Special Personal Property Coverage

Endorsement .................................. 11, 82 Special provisions ....................................22 Specialty policies ....................................... 6 Stamp collections ................................. 8, 32 Statuary ....................................................64 Stradivarius violin .....................................60 Students ...................................................78 Subrogation ..............................................66 Suit ....................................................... 2, 39

T

Tearing .....................................................20 Theft ... 10, 47, 53, 56, 70, 71, 74, 76, 78, 79,

89, 93 Total ............................................. 33, 72, 82


U

UL .................................................. 105, 106 Underwriting ........4, 5, 95, 98, 100, 101, 102 Unscheduled ...................... 4, 60, 63, 80, 83

V

Valuation .............1, 4, 11, 33, 55, 66, 75, 87 Vandalism .......................................... 47, 89 Vermeil .................................................. 111

Vermin.......................................... 43, 49, 58

W

War . 18, 20, 25, 40, 41, 56, 76, 84, 117, 120 Watercraft ................................................10 Wear and tear 18, 20, 25, 41, 43, 49, 52, 58,

64, 70, 76, 86, 117, 120 Windstorm .................... 19, 25, 47, 117, 120

Date post:	11-Sep-2021
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Scheduling Personal Property for the Homeowners Insured

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