Q

One of my clients, who is insured on a HO 00 02 04 91, lost $7,200 worth of property in a burglary. There was $1,700 worth of jewelry and $5,500 of personal property taken. The policy deductible was $1,500. I believe that the deductible should be applied to the loss before the jewelry limitation of $1,000 is taken into consideration.

Using this logic, I believe the client should recover $5,700, which is the amount left if the deductible is applied to the loss before the jewelry limitation is considered. Is this correct?

Virgin Islands Subscriber

A

We agree with your logic. The deductible is applied first. Stated another way, only one deductible is applicable to the total loss. If we allocate the $1,500 deductible to the $1,700 in stolen jewelry, the recovery would amount to $200 for jewelry and $5,500 in personal property for a total loss payment of $5,700. The $1,000 theft limit for jewelry is thus incorporated into the $1,500 deductible.