Rhode Island Insurance Adjuster Exam

When a diamond ring is stolen and insured with a personal articles floater, does a deductible apply?

1. Yes, always

2. No, it usually does not

3. Only if specified

4. Yes, only for high-value items

The correct answer is: No, it usually does not

When considering whether a deductible applies to a diamond ring insured under a personal articles floater, the correct answer points to no deductible usually being applicable. This is based on the nature of personal articles floaters, which are designed to provide broad coverage for specified valuable personal items such as jewelry, collectibles, and fine art. Typically, personal articles floaters offer coverage on a replacement cost basis, meaning policyholders can receive the full value of the lost item without a deductible being deducted from the claim settlement. This characteristic makes them an attractive option for insuring valuable items since it results in a more favorable outcome for the policyholder if they need to file a claim. While there may be specific policies or circumstances where a deductible is included, in general terms, it is less common for personal articles floaters to impose a deductible on claims, especially for insured items like jewelry which are likely to have substantial value. Thus, this insight confirms why the assertion that a deductible usually does not apply is sound.