Pair or Set Clause

Our insured threw away an old bathrobe, not realizing her diamond earrings were in the pocket. By the time she discovered they were gone, the trash had been collected and there was no way to recover them. She is insured on a policy that provides “$5,000 for loss by theft, misplacing or losing of jewelry, watches, furs, precious and semi-precious stones, but not to exceed $2,500 for any one article.” The earrings were not scheduled, but they were appraised at over $5,000.

But when we turned in the claim, the adjuster insisted that a pair is one article, and therefore will only pay $2,500 for the loss of two earrings. The “pair and set” clause reads that the insurer “may elect to a) repair or replace any part to restore the pair or set to its value before the loss; or b) pay the difference between actual cash value of the property before and after the loss.”

We think the total of $5,000 should be paid, but the adjuster remains adamant. What is your opinion?

Oregon Subscriber

We agree with your interpretation. Not only is the adjuster overlooking the meaning of pair, which, according to Webster's Collegiate Dictionary (Tenth Edition) is “two corresponding things designed for use together,” but also the “pair and set” clause. If two items were one article, the clause could simply state “set clause.”

Had the insured lost only one earring, would the adjuster, based on his or her interpretation, proceed to reimburse the insured for the loss of half an earring? Obviously, this makes no sense; the logical interpretation is to treat each earring as one article, and pay the entire loss subject, of course, to any deductible.

 

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