ISO PM 00 09–PERSONAL ARTICLES STANDARD LOSS SETTLEMENT FORM

(March 2024)

Purpose

Personal articles coverage, whether in the form of an endorsement or a separate policy, protects property against direct damage. Coverage includes valuable property associated with family and home life.

Separate coverage or scheduling facilitates protection at amounts that accurately reflect its value. Valuation is typically based upon relevant documentation such as a current appraisal or sales receipt. Separate protection is important since severe coverage limitations exists in standard homeowners policies for such property.

Related Court Case: Sublimit Applies To Rare Coins

Personal articles coverage may be written as a separate policy, as an endorsement to a Homeowners policy or, by some companies, as an endorsement to other types of personal policies.

HO 00 03–ISO Homeowners 3 - Special Form Coverage Analysis

Hobbies – Hazards and Opportunities

ANALYSIS OF POLICY

ISO provides inland marine personal articles coverage using one of two forms: PM 00 09–Personal Articles Standard Loss Settlement Form and PM 00 10–Personal Articles Agreed Value Loss Settlement Forms. The only difference between the forms is the settlement option. This analysis is based on the PM 00 09. The settlement difference will be discussed at the end of this analysis.

SCHEDULE

The schedule has space to enter the limit of insurance and premium that applies to one of more of the following classes of property:

· Jewelry

· Furs (including fur-trimmed items)

· Cameras

· Musical Instruments

· Silverware

· Golfers Equipment

· Fine Arts (including information on additional locations and whether breakage coverage applies)

· Collections (postage and coins)

The form has additional space for specifically listing items including indicating whether breakage coverage (fine arts) or in-vault coverage (jewelry) applies.

However, even if a limit is shown there is no coverage for a particular item unless it is specifically scheduled. The only exception is property that is considered Unscheduled Property subject to a blanket amount. A description of the unscheduled property and a limit for it must be provided. This is considered for Fine Arts but other classes can use this approach.

A. Property Covered

Personal Articles Floater coverage applies globally to all items listed as covered property.

1. Scheduled Property

Insures against all risks of direct loss to the property of a given property class for which an insurance amount and premium is entered.

The amount of payment for a particular item is subject to Paragraph D. 1. Loss Settlement in the Common Policy Provisions Form PM 00 01 since that provision includes coverage limitations.

Related Article: Common Policy Provisions

2. Unscheduled Property – Blanket Insurance

This provision affects only coverage to eligible classes of property other than jewelry and furs.

Insures against all risks of direct loss to the property of a given property class for which an insurance amount and premium is entered.

The amount of payment for a particular item is subject to Paragraph D. 1. Loss Settlement in the Common Policy Provisions Form PM 00 01 since that provision includes coverage limitations.

Related Article: Common Policy Provisions

3. Fine Arts – Scheduled and Unscheduled

Regardless whether protection applies specifically or on a blanket basis, items classified as fine art are subject to the following:

a. The applicable premium that appears in the schedule is based on the information the named insured supplied on that property’s location

b. If any covered items are moved from or to the listed location, it may only occur if the items are properly handled (packed and unpacked) by competent personnel.

In other words, losses involving any fine arts might be voided if the loss circumstances involved either unlisted locations or improper handling.

4. Classes of Property Described – These descriptions apply to such property that is owned by the name insured

a. Cameras

The following items listed are examples of what a camera is but the listing should not be considered a limitation:

(1) Cameras – Analog and Digital, (whether they have motion or still capabilities)

(2) Projection machines – whether movie, multi-media, overhead or slide variety

(3) Portable Sound Equipment – but it must be related to motion or still film processes (operation, projection recording or reproduction)

(4) Other ocular equipment (binoculars, microscopes, telescopes), but only if used with photographic equipment

(5) Related photographic and projection media (CDs, Diskettes, DVDs, Film, and Tapes)

(6) Accessories and Equipment, but only such property that is related to photography

Camera Insurance

Photography Glossary

b. Musical Instruments

This class includes all listed musical instruments. It also applies to accessories, equipment and sheet music that are related to the instruments covered by the policy.

Example: An insured turns in a fire claim that includes damage to guitars, keyboards, and drums. Since the Personal Article Form’s schedule only refers to guitars and drums, no coverage applies to the keyboards.

c. Silverware

(1) This class of property includes silverware, silver plate, gold plate, pewter and platinum (as well as dinnerware that are plated with these metals)

(2) Flatware, hollowware, tea sets, trays and trophies are deemed silverware property if it is made of silver, gold, pewter, or platinum

d. Golfers’ Equipment

This property class applies to golf clubs, golf clothing and golf equipment belonging to an 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. Not that the following is a substantial point, but golf balls are insured only against loss by fire or burglary (if burglary appears to be the likely cause). In order to qualify for coverage, there must be evidence that balls were taken from within a building. Further, there must be evidence that a person broke into a covered location.

Example: Jada's sleeve of custom, monogrammed golf balls disappeared from a clubhouse dining room table - not covered.

Golfers’ Equipment Floater

Golf Glossary

e. Fine Arts

This applies to the following private, as opposed to commercially oriented property:

(1) Drawings (refers as well to etchings, lithographs, paintings, pictures, or tapestries)

(2) Windows made of art glass

(3) Legitimate artwork (includes, but not limited to antique furniture/silver, bric-a-brac, porcelains, rare books [including manuscripts], rare glass, rugs, and statues [bronze or marble])

(4) Other property that qualifies under this class are other rare items that have measurable artistic merit or historical value.

f. Postage Stamp Collections

This property class applies to a wide variety of philatelic property that is either owned by or in the care, custody, or control of an insured such as the following:

(1) Postal stamps (due, envelope, official, match, medical and revenue)

(2) Covers, essays, locals, proofs, and reprints (as well as similar property)

(3) Stamp books, mountings, and pages (but only when they contain covered philatelic property)

g. Rare and Current Coin Collections

This property class applies to a wide variety of items that facilitated financial transactions or with honorific value that are owned by or in the care, custody, or control of an insured such as the following:

(1) Bank notes, medals, and paper money

(2) Money, tokens, and similar numismatic property

(3) Property used to display, contain, or mount property that qualifies as coins and numismatic property

5. Newly Acquired Property

An important coverage benefit of the personal articles form is the automatic coverage for newly acquired items of jewelry, furs, cameras, musical instruments, and fine arts. However, the coverage for new purchases only applies when scheduled coverage already exists for similar property.

a. Jewelry, Furs and Cameras

The automatic limit is 25% of the amount of insurance for the class of property involved or $10,000, whichever is less.


Example: Shimmerly Jimstonz has a Personal Article Floater with the following schedule:
Personal Article Policy Schedule
Item	Coverage Amount	Premium
Diamond Bracelet	$3,355	$42
Emerald Ring	$3,200	$51
Diamond Earrings	$2,900	$30
Black Pearl Necklace	$4,780	$93
Total	$14,235	$216
Scenario 1: On June 1, Shimmerly’s latest gentleman friend celebrates their six months of dating by giving her a ruby pendant valued at $2,100. Shimmerly wears the pendant frequently on a favorite jacket. During a July 8 dinner date, with yet another gentleman admirer, Shimmerly returns to her table from the dance floor and notices that the pendant has been removed from her jacket. When she files a claim, her adjuster from Snooterly Property & Casualty denies coverage. Shimmerly is informed via certified mail that the pendant should have been added to her floater by July 1.
Scenario 2: On August 5, Shimmerly is visiting a friend who takes her to a private estate auction. Shimmerly falls in love with an authentic bronze statue of a Roman gladiator that is valued at $3,500. On August 9, Shimmerly loads the statue and luggage in the back seat of her car for the long drive home. When she returns to her car that she had parked while eating at a highway restaurant, she discovers her back window smashed and her statue gone. She reports the loss as soon as she gets home on August 10 and she is furious to hear that the loss does not qualify for scheduled coverage. Shimmerly points out that she only owned the statue for several days. The Snooterly P&C adjuster explains that the Newly Acquired provision would apply to a new piece of jewelry (which is on her current schedule), but not an entirely different class of property such as her statue.

b. Musical Instruments

The automatic limit is 25% of the amount of insurance for the class of property involved or $10,000, whichever is less. However, another restriction applies. If the policy covers any musical instruments on a blanket basis, newly acquired property in that class is ineligible for coverage if it is owned by (or rented to) a municipality, school, or school board.

Note: This class of property’s location requirement would also act to further limit coverage.

c. Fine Arts

The automatic limit is 25% of the amount of insurance for the class of property involved.

d. Reporting Condition

The newly acquired property feature is particularly helpful since persons who schedule coverage are likely to be persons who collect higher-valued property. This coverage feature allows such persons reasonable time to remember to report their new property and, most importantly, have their coverage adjusted. Of course, prudent action often needs encouragement, so, it is a condition that coverage ceases on a newly acquired item if it is not reported within 30 days, except for fine arts which is 90 days.

B. Property Not Covered

Personal Articles Floater coverage is inapplicable to a number of situations in several property classes. Specifically, under the following:

1. Jewelry

a. Gems that are not in jewelry mountings

b. Precious metals (silver, gold, platinum, etc.) not in common form, including bullion

c. Goldware, pewterware, platinumware, and silverware, including such property plated with these metals

d. Flatware, hollowware, tea sets, trays and trophies made of which include precious metals (including plating)

Coverage is denied as the above items are either too prone to loss, difficult to value, or which are covered under other property classes.

2. Cameras

Ineligible property extends to property highly likely to be used commercially. Therefore, items failing to qualify include aerial and radar cameras (including related accessories and equipment), TV cameras, accessories, and equipment (when used commercially), cameras operated by coins/tokens, cameras, equipment, and accessories that are owned by dealers or manufacturers.

3. Musical Instruments

Ineligibility under this class is created by property use. Unless such coverage is purchased as an option, getting paid for instrument use disqualifies the property. This exclusion is lifted if a performance for pay appears in the form’s Declarations.

Playing for pay includes use of the property as a paid music instructor anytime within the policy period. Also, payment for other instrument use any time during the policy period qualifies as paid performance.

4. Silverware

Ineligibility under this class extends to pens, pencils, flasks, smoking accessories, or jewelry that are made of or which includes silver or other precious metals.

5. Fine Art

Ineligibility under this class occurs according to who, effectively, owns or controls such property. Specifically, disqualification extends to the following instances:

a. Fine arts held by an art gallery, art institution, auction house, art dealer or which is on public display in a room or museum. Ineligibility applies when such property has existing coverage under the applicable party having custody.

b. Fine art that is on exhibit at fairs or at expositions (national or international). However, such property is still eligible if the personal articles policy lists the location as a covered location.

c. Fine art that is owned by and insured on the behalf of government authorities (County, Federal, Municipal or State).

6. Postage Stamps and Coins

Ineligibility under this class occurs for several the following reasons:

a. The property is NOT part of a collection (either stamp or coin)

b. The property while being mailed (unless it is registered mail)

c. The property is in the custody of a transportation company

Finally, legal status also affects eligibility.

7. Contraband and Illegal activity

Regardless the type of property, if it is contraband or is involved in any form of illegal activity, it is disqualified as covered property.

Example: Billy’s guitar is made of Brazilian rosewood which is subject to a ban in the United States. The guitar was destroyed and, because the guitar was made of contraband material, its loss was not eligible for coverage. The only exception would be if there was authenticated provenance that the rosewood used in the guitar had been purchased prior to the ban.

C. Perils Insured Against

The ISO Personal Articles Policy protects against all forms of direct, physical loss. However, it does not insure against loss or damage caused by:

1. Wear and tear, or gradual deterioration

2. Insects, vermin, or inherent vice

3. With regard to a covered, permanently installed organ (Musical Instruments section), no protection applies to:

a. Loss involving breakdown or failure (electrical or mechanical)

b. Repairs, adjustments, service, or maintenance (except coverage still applies to fire or explosion that occurs along with such activity). However, regarding the ensuing fire or explosion exception, coverage applies only to the portion of loss directly attributable to those perils.

4. With regard to any applicable Fine Arts coverage, no protection extends to the following:

a. Loss due to breakage that occurs to art glass windows, bric-a-brac, glassware, marble, porcelains, statuary, and similar articles.

b. An exception is made to breakage loss when it is due to any of the following:

· Fire or lightning

· Aircraft, collision, or explosion

· Earthquake, flood, or windstorm

· Malicious damage or theft

· Conveyance derailment or overturn

5. With regard to any applicable Postage Stamps or Rare and Current Coin Collection coverage, no loss applies to any of the following:

a. Loss directly connected to covered property being handled or worked upon

Example: John has taken a framed, prized stamp cover to have it examined and appraised. As the appraiser attempts to remove the cover from the frame mounting, he tears it in two. This damage is not covered.

b. Loss from ordinary sources such as:

(1) Creases, dents, fading, scratches, tears or thinning

(2) Color transfer, dampness, depreciation, inherent defect, or temperature extremes

(3) Individual article disappearance (including coins or stamps). However, exceptions exist for individual items that are specifically described and insured as well as items that are mounted in a volume and the volume page containing the item also disappears.

D. Deductible

This insurance is subject to the policy deductible that appears on the declaration page.

E. Options

The ISO Personal Articles Policy offers several additional coverages as options that supplement its base coverage. The following options are in effect if the policy shows that they have been selected either in the declarations or elsewhere.

1. Safe or Vault Premium Credit for Postage Stamp and Coin Collections

A premium credit applies to the amount charged for insuring property under these classes. However, the credit is contingent upon keeping 75% of the collections within either a fireproof safe or within a vault that is equipped with a combination lock. The storage requirement applies only when property is not being used or exhibited. The 75% of the collection stipulation is based on the collection’s total value covered, not on its volume.

2. Named Perils Coverage for Musical Instruments

When this option is selected, the risk of direct physical loss coverage for musical instruments is replaced with protection granted only for loss created by the named perils of fire, lightning, cyclone, tornado, flood, theft, or conveyance accident.

3. Breakage of Fragile Articles Coverage for Fine Arts

When this option is selected, the breakage limitation does not apply to described articles where a dagger mark is printed next to those articles.

4. Windstorm, Hurricane or Tornado Exclusion for Fine Arts

When this option applies, all items within the fine arts property class are stripped of protection against severe wind loss (windstorm, hurricane, or tornado). The exclusion applies to both direct and indirect severe wind loss and is unaffected by the location of the property.

5. Jewelry in Vault Credit

When the named insured accepts this premium credit, the following stipulations apply:

a. Specified jewelry indicated on the policy Schedule with a number mark (#) next to the item description must be stored within a vault. The vault must be located at an institution (bank or security firm) appearing in the declarations or elsewhere in the policy.

b. No coverage applies to article damage or loss when such articles are not located as stipulated. However, an exception is granted if, before removing the property, the insurance company is notified and has already been paid an applicable premium to cover the additional exposure during the removal period.

6. Jewelry Pair or Set Broad Coverage

When this option is selected, the Loss To A Pair, Sets Or Parts in PM 00 01–Common Policy Provisions Form that applies to jewelry is replaced by this item which provides the following:

When loss occurs to scheduled jewelry which is a pair, set, or consists of multiple parts, the insurer has the option of paying the full, scheduled value for the complete pair, set or multiple part item and then the named insured must surrender any remaining parts of the item to the insurance company.

This option lends reasonableness to the settlement process. Sometimes a loss will involve matched set property which, for all practical purpose, cannot be made complete if part of the set is lost or destroyed. Though a cash settlement is not a perfect option, it at least provides some level of compensation when property just cannot be restored or replaced.

7. Additional Person Insured – Engagement Ring, Wedding Ring Or Guard Ring Only

When this option applies, another party with a legitimate financial interest in a specified article of jewelry must be listed on the policy or in the declarations. However, that status is ONLY with regard to the identified jewelry item. The insured specifically agrees that such additional interest has no covered status regarding any other part of the policy.

F. Loss Conditions

Under this provision, Item D.1. b. Agreed Value Loss Settlement – Scheduled Property Only under PM 00 01 Common Policy Conditions form is modified so that it ONLY applies to items classified as Fine Arts.

PM 00 10–Personal Articles Agreed Value Loss Settlement Form

This form is identical to the PM 00 09 described above except for two sections.

Under Section E. Options, the Jewelry Pair or Set Broad Coverage is eliminated.

Under Section F. Loss Conditions, all references to PM 00 01, Paragraph D.1.a, Standard Loss Settlement is deleted. This means that the Agreed Value Loss Settlement – Scheduled Property Only applies along with Unscheduled Property – Blanket Insurance Loss Settlement.