South Carolina Personal Lines Practice Exam

What is the maximum limit for the Worldwide Personal Property Coverage Extension?

1. Up to 5% of personal property limit

2. Up to 10% of personal property limit

3. Up to 15% of personal property limit

4. Up to 20% of personal property limit

The correct answer is: Up to 10% of personal property limit

The correct answer is based on the typical provisions regarding Worldwide Personal Property Coverage Extension provided by homeowners insurance policies. The maximum limit for this extension is indeed up to 10% of the personal property limit under the standard policy terms. This allowance is designed to provide additional coverage for personal items that are removed from the insured residence to cover personal property anywhere in the world, acknowledging that valuable belongings might accompany individuals while they travel. This provision helps ensure that policyholders are not left without coverage for personal items that may otherwise be exposed to various risks when taken away from their primary residence. It's a crucial aspect of homeowners insurance, making it flexible and beneficial for individuals who travel frequently or have items that are not always stored in the home. Therefore, the choice indicating up to 10% appropriately reflects this standard coverage structure, ensuring that policyholders can secure protection for their personal belongings globally while adhering to the limitations set forth in typical personal lines coverage.