INTRODUCTION
The Personal Articles Floater (PAF) covers 9 classes of Personal Property against risks of Direct Physical Loss. Coverage is worldwide except for fine arts. The following 9 classes of Personal Property can be insured:
1. jewelry
2. furs
3. cameras
4. musical instruments
5. silverware
6. golfing equipment
7. fine arts
8. postage stamps
9. rare and current coins
Certain classes of newly acquired property, such as: jewelry, furs, cameras and musical instruments, are automatically covered for 30 days if the insurance is already written on that particular class of property. The amount of insurance on newly acquired property is limited to 25% of the amount of insurance for that class of property or $10,000, whichever is lower. The property must be reported to the company within 30 days after acquiring it to continue the coverage, and an additional premium must be paid from the date of acquisition.
Jewelry ‑ any article of jewelry may be insured. The policy also covers silverware, plateware, pewterware, toilet articles, cigarette cases and trophies. Jewelry may be insured separately or together with furs. Each item of jewelry must be scheduled and a specific amount of insurance shown for it. Insurance on jewelry is carefully underwritten because of the moral hazard. Original bills of sale or a signed appraisal may be required before the jewelry is insured.
Furs ‑ any article of fur, or article trimmed with fur, in which fur represents the principal value (fur rugs and imitation furs). Each item must be listed separately and a specific amount of insurance shown for it. Furs also are carefully underwritten because of the moral hazard. If, during the term of the policy, the insured purchases additional furs, the newly purchased property is covered automatically. The insured must notify the company within 30 days of its purchase subject to the following condition:
1. Insurer is not liable for more than 25% of the amount of insurance already covered on that class of property or $10,000 covered under the policy.
Cameras and Camera Equipment ‑ Cameras, films, telescopes, binoculars, microscopes and projectors used in photography. Additional insurance can be purchased to cover the Blanket Insurance, but such insurance may not exceed 10% of the total amount on the scheduled items. This insurance is used to cover: filters, sunshades, meters and like smaller items. Not covered would be TV cameras and equipment, coin operated devices, area and radar cameras, camera property. Professional use is covered by endorsement and additional premium.
Musical Instruments ‑ Musical instruments, instrument cases, sound and amplifying equipment and similar equipment can be insured under the Personal Articles Floater. Keep in mind that musical instruments played for pay during the policy period are not covered unless an Endorsement is added and a higher premium paid. Radios, televisions and stereos are not eligible for insurance under this policy.
Silverware ‑ Silver and goldware can also be insured under the Personal Articles Floater however, pens, pencils, flasks, smoking implements, or jewelry cannot be insured as silverware. These types of property may be insured as jewelry.
Golfing Equipment ‑ Golfing equipment, including golf clothes, can be insured under the Personal Articles Floater. Other clothing contained in a locker while the insured is playing golf is also covered. Golf balls, however, are covered for loss only by fire and burglary if there are visible marks of forcible entry into the building, room or locker.
Fine Arts ‑ Fine arts include private collection of paintings, antique furniture, rare books, rare glass, manuscripts and bric‑a‑brac. Fine arts are insured on a valued basis. If a valuable painting is stolen, the amount of insurance stated in the Schedule for that item is the amount paid.
Newly acquired fine arts are automatically insured for 90 days, however, the insured is required to notify the insurer of the purchase within 90 days and pay the additional premium. The limit of such property is 25% of the total insurance.
Fine Arts Coverage has 3 major exclusions:
1. loss to property on exhibition at fairgrounds or at national/international expositions unless the premises are covered by the policy.
2. breakage of art glass windows, glassware, statuary, marble, bric‑a‑brac, porcelain and similar fragile articles are also excluded. The exclusion does not apply if the breakage is caused by fire, lightning, explosion, aircraft, collision, windstorm, earthquake, flood, malicious damage or theft, and derailment or overturn.
3. damage as a result of repairing, restoration or retouching process.
Stamp and Coin Collection ‑ valuable Stamp and Coin Collections are also insured under the PAF. The stamps and coins can be insured on either a Scheduled or Blanket Basis. If the items are valuable, the property should be scheduled so that each item is listed and insured. If the property is insured on a Blanket Basis, each item is not separately listed and the insurance applies to the entire collection.
Loss Settlement ‑ If a loss occurs to a scheduled item, the amount paid is the lowest of the following accounts:
1. Actual Cash Value
2. the amount for which the property could reasonably be expected to be repaired
3. the amount for which the property could reasonably expected to be replaced
4. the amount of insurance.
If the stamps or coins are covered on a Blanket Basis, the amount paid is the Cash Market Value at the time of loss. There is a $1,000 maximum limit of any unscheduled coin collected and a $250 maximum limit on any single stamp, coin or individual article, or any single pair, block, series, sheet, cover, frame or card.
Another limit also applies if the stamps or coins are insured on a Blanket Basis, and it has the effect of a 100% Coinsurance Clause. The insurance company is not liable for a greater proportion of any loss than the amount of insurance on Blanket Property bears to the Cash Market Value at the time of loss.
EXCLUSIONS
The following exclusions apply to Stamps and Coin Collections:
1. theft from any unattended automobile (unless shipped as registered mail)
2. loss to property not part of a Stamp or Coin Collection
3. loss to property in the custody of transport companies
4. damage from being handled or worked on
5. mysterious disappearance unless the item is scheduled or specifically insured, or is mounted in a volume and the page to which it is attached is also lost
6. transfer of colors, inherent defect, dampness, extremes of temperature, or depreciation
7. damage from fading, creasing, denting, scratching, tearing or thinning.
CHAPTER 3 QUESTIONS
1. How many classes of Personal Property are covered by the Personal Articles Floater (PFA)?
a. 6
b. 10
c. 5
d. none
2. What types of jewelry may be insured?
a. all
b. diamond studded only
c. only gold chains
d. none of the above
3. When insuring cameras, what must be done?
a. camera must have been produced in the U.S.
b. item must be described and valued
c. camera must only be single lensed
d. all of the above
4. The limit of coverage for Fine Arts is?
a. 10% of the total insurance
b. 15% of the total insurance
c. 25% of the total insurance
d. 30% of the total insurance
5. If a loss occurs to a scheduled item, the amount paid is the lowest of ... ?
a. the amount for which the property could reasonably be expected to be repaired/ replaced
b. the Actual Cash Value
c. the amount of the insurance
d. all of the above
answers
1. d
2. a
3. b
4. c
5. d