Topics covered:
Dispute over applicability of special limits
Homeowners language changed
Use vs. kind of property
Current ISO homeowners

Dispute over Applicability of Special Limits

The introduction of simplified language homeowners policies, both the Insurance Services Office (ISO) version and those of some independents, reopened the question of applicability of the money and stamp limits to coin or stamp collections. This issue, raised long ago under the original homeowners policies of the 1950s, was temporarily resolved by De Biase v. Commercial Union Ins. Co., 286 N.Y.S.2d 502 (N.Y. App. Term 1967). The $100 money limit did not apply to rare coins, taken out of circulation by the insured, a numismatist, and subsequently stolen from the insured's residence. Instead, these coins were considered general personal property and covered to the full personal property coverage limit.

The court found that money is a medium of exchange, whereas the coin collection was secreted away in the insured's residence apart from whatever money and coins the insured used as a medium of exchange. The collection was viewed instead as a commodity which could be bought or sold at considerably more than the face amounts of the coins.

In an opposite opinion, the Texas Supreme Court in National Surety Corp. v. Seale, 506 S.W.2d 579 ( Tex. 1974) found a coin collection was money. This finding also favored the insured, however, allowing recovery for burglary of the collection from a safe, under a blanket crime policy covering money and securities. The court made a distinction between the interpretation of money in the insuring clause and, as in the De Biase case, when applied as a limitation against recovery. The court upheld the long-standing principle that a finding of ambiguity either in the insuring clause or in a limitation of coverage must be resolved against the maker of the contract, the insurer, and in favor of the insured. In effect, in these cases, the insured was granted the best of both worlds. A similar finding for the insured, that coins are money under a crime policy covering money and securities, had previously been handed down by a Missouri appellate court in Cornblath v. Fireman's Fund Ins. Co., 392 S.W.2d 648 (Mo. Ct. App. 1965).

Likewise, in Walker v. State Farm Fire & Casualty Co., 758 So.2d 1161 (Fla. Ct. App. 2000), the court failed to differentiate between coins used for currency and rare, collectible coins. The homeowners lost $46,230 worth of rare coins due to theft. Their insurer, State Farm, paid only $200 for the loss, claiming that the coins fell into the special limits of liability section for money, bank notes, coins, and medal. The homeowners argued that the term coins was ambiguous and should therefore be read to include their stolen rare coins. The court, however, stated, “We find that the term 'coins' means just that.” There was no distinction, according to the court, because money was included in the list of items subject to the special limits. If the insurer wanted to simply limit coins in circulation, the court reasoned, money would be a sufficient term. But, because money and coins were used separately, rare, collectible coins are included.