Which statement about Personal Articles Floater forms is true?

Which statement about Personal Articles Floater forms is true?

• A. The Personal Articles Agreed Value Loss Settlement Form pays the agreed value specified in the schedule
• B. The Personal Articles Standard Loss Settlement Form pays only the replacement cost
• C. Both forms always pay actual cash value
• D. The forms do not include coverage for jewelry

Answer: (A)

Personal Articles Floater uses two loss settlement methods. The Agreed Value option locks in a value for each scheduled item and, when a covered loss occurs, pays that agreed amount—the value specified on the schedule—regardless of depreciation, as long as the loss stays within policy terms. This provides certainty about the payout. The Standard Loss Settlement method, by contrast, generally pays the actual cash value at the time of loss (the item’s replacement cost less depreciation), and it does not automatically pay replacement cost unless a separate endorsement or provision applies. Because jewelry and other valuable items are typically scheduled under the Personal Articles Floater, coverage for such items is available; stating that jewelry isn’t covered isn’t accurate. Therefore, the statement about the Agreed Value form paying the agreed value on the schedule is the correct one.

Personal Articles Floater uses two loss settlement methods. The Agreed Value option locks in a value for each scheduled item and, when a covered loss occurs, pays that agreed amount—the value specified on the schedule—regardless of depreciation, as long as the loss stays within policy terms. This provides certainty about the payout. The Standard Loss Settlement method, by contrast, generally pays the actual cash value at the time of loss (the item’s replacement cost less depreciation), and it does not automatically pay replacement cost unless a separate endorsement or provision applies. Because jewelry and other valuable items are typically scheduled under the Personal Articles Floater, coverage for such items is available; stating that jewelry isn’t covered isn’t accurate. Therefore, the statement about the Agreed Value form paying the agreed value on the schedule is the correct one.