Q

Our HO-3 ('91 edition) insured had some CDs stolen from his car. The thief also took the portable CD player that belongs to our insured's son. This is one of those players that can be powered by batteries or operated with an adaptor in the car's cigarette lighter.

The insurer is denying the claim entirely, based on the property not covered provision 3.b., that says the policy does not cover electronic apparatus that is designed to be operated “solely by use of the power from the electrical system of motor vehicles or all other motorized land conveyances…Electronic apparatus includes…tapes, wires, records, discs or other media, for use with any electronic apparatus.”

Our contention is that the policy does provide some limited coverage for these items in the special limits of liability. What is your opinion?

Maryland Subscriber

A

The coverage for the stolen property is, as you say, in the special limits for electronic equipment. The policy provides $1,000 for adaptable electronic equipment that can be powered by the vehicle's electric system, while capable of being powered by other means. That is what the portable CD player was. Included as well within the $1,000 is coverage for “tapes, wires, records, discs, or other media for use with any electronic apparatus as described in this item 10.”

Although you did not say anything about the deductible, remember that the deductible applies to the amount of the loss as it pertains to the insured—not to the sublimit.

So, if the insured lost property valued at $1300, the deductible (let's say $250) is first applied to the $1300, leaving a payable amount of $1050. However, that amount payable is further limited by the $1000 sublimit.