South Carolina Personal Lines Practice Exam

What is the special sub-limit for theft of jewelry, furs, and stones in HO policies?

1. $1,000

2. $1,500

3. $2,000

4. $2,500

The correct answer is: $1,500

The special sub-limit for theft of jewelry, furs, and stones in homeowner's insurance policies is typically $1,500. This sub-limit is important as it represents the maximum amount an insurer will pay for these specific types of personal property lost due to theft, regardless of the overall personal property limit in the policy. Homeowners insurance policies often have higher limits for general personal property but impose these specific sub-limits for certain categories because they are considered to carry more risk. High-value items like jewelry and furs can be more susceptible to theft, so insurers manage their exposure by capping coverage for losses in these categories. Understanding these sub-limits is crucial for policyholders who own items that fall into these categories since it influences how much they can claim in the event of a loss. If the value of the stolen items exceeds this limit, the insured would only receive the sub-limit amount unless they have additional coverage or endorsements specifically for higher-value items.