Our insured has a package policy covering his building and his business personal property. Attached to this policy is an inland marine endorsement covering electronic data processing (EDP) equipment. The building and personal property form has a $250 deductible and the EDP endorsement has a $250 deductible.

A recent fire damaged some telephone equipment and some EDP equipment. The insurer wants to apply two deductibles to this loss. We believe that because there was only one fire—and there is only one policy—only one deductible should apply.

What are your thoughts?

Pennsylvania Subscriber

In the case you describe, the insurer is correct in applying two deductibles. The package policy does not cover property that is specifically insured. In this case, the computer equipment is specifically insured under an EDP floater attached to the package policy.

The terms of the EDP floater govern all claims on that property. The floater says that any property loss under it is subject to a $250 deductible. That is what the insured purchased; that is how the rate for that coverage was calculated.

The other property damaged—the telephone equipment—is subject to the terms of the building and contents form. That form also carries a $250 deductible, applicable to the phone equipment.

The more specific form always applies in lieu of the general form. The settlement would be the same if your insured had a separate EDP policy, instead of a floater attached to the package. It is really separate coverage, with its own conditions.

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