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.”