5.2 Inland Marine — Scheduled Personal Property
Key Takeaways
- Scheduled Personal Property is written as the HO 04 65 endorsement or as a standalone Personal Articles Floater (PAF) — open perils, agreed value, and no deductible
- Standard ISO classes scheduled: jewelry, furs, cameras, musical instruments, silverware/goldware, golfer's equipment, fine arts, stamp collections, and coin collections; firearms are frequently added as a tenth class
- Newly acquired property is automatically covered for 30 days (90 days for fine arts) up to the lesser of 25% of the existing class limit or $10,000
- Appraisals or bills of sale are required for jewelry above roughly $1,000-$5,000 and for any scheduled fine-art piece
- Fine arts coverage includes pair-and-set and breakage protection but excludes wear and tear, gradual deterioration, insects, vermin, and inherent vice
Why Schedule at All
The Homeowners (HO-3) form caps theft of jewelry, watches, and furs at $1,500. A $40,000 engagement ring stolen from a hotel room therefore pays only $1,500 — and only if the loss was by a named peril. Scheduled Personal Property (SPP), written either as the HO 04 65 endorsement on the homeowners policy or as a standalone Personal Articles Floater (PAF) (an inland marine form), closes that gap. Both deliver the same upgraded coverage:
- Open perils (all-risk) rather than named perils
- Agreed value at total loss — the carrier pays the scheduled amount with no depreciation
- No deductible on scheduled items
- Worldwide territory with no trip-length limit
- Pair-and-set protection on fine arts and, in many forms, jewelry
The inland marine concept comes from "floaters" — coverage that floats with mobile property wherever it goes, a legacy of ocean marine extending coverage to goods moving over land.
The Nine ISO Classes (plus firearms)
| Class | Key feature |
|---|---|
| Jewelry | Open perils; mysterious disappearance covered |
| Furs | Pair-and-set on matching pieces |
| Cameras | Includes lenses, accessories, and drones |
| Musical instruments | Personal use only (professional use excluded) |
| Silverware / goldware / pewterware | Single bundled class limit |
| Golfer's equipment | Clubs, balls, and clothing kept in a locker |
| Fine arts | Appraisal required; breakage covered; pair-and-set |
| Stamp collections | Blanket plus scheduled rarities; counterfeit excluded |
| Coin collections | Blanket plus scheduled rarities |
| Firearms (often added) | Roughly $2,500 each before an appraisal is required |
Newly Acquired Property
The floater automatically extends to newly acquired items within an already scheduled class:
- 30 days for most classes
- 90 days for fine arts (appraisals take longer to obtain)
- Limit: the lesser of 25% of the existing class limit or $10,000
- The insured must report and pay premium within the window, or coverage reverts to the HO Coverage C sublimits
A frequent trap: the auto-acquisition feature only works if the insured already schedules at least one item in that class. A first-ever camera bought by someone with no scheduled cameras gets no automatic floater coverage.
Appraisals and Valuation
For most jewelry and for any fine-art piece, carriers require a recent appraisal (typically within 3-5 years) or an itemized bill of sale. The appraisal establishes the agreed value paid at total loss, eliminating arguments over depreciation. On a partial loss the carrier pays the cost to repair or restore.
Key Exclusions
- Wear, tear, gradual deterioration, and inherent vice (a defect within the item itself)
- Insects, vermin, rodents, war, nuclear hazard, and governmental action
- Breakage of fragile articles (china, glassware, statuary) unless caused by fire, theft, lightning, windstorm, vehicle, aircraft, vandalism, derailment, or collapse — but fine arts and cameras are usually exempt from this limitation
- Mechanical or electrical breakdown
- Mysterious disappearance — covered on jewelry, cameras, and instruments; excluded on stamps and coins unless specifically added
- Counterfeiting loss to stamp or coin collections
Coverage C vs. Scheduled Property — Side by Side
| Feature | HO-3 Coverage C | Scheduled PP / PAF |
|---|---|---|
| Peril basis | Named perils | Open perils |
| Deductible | Policy deductible applies | None on scheduled items |
| Valuation | ACV (or RC if endorsed) | Agreed value at total loss |
| Sublimits | Yes — $1,500 jewelry, $2,500 firearms, etc. | None — the full scheduled amount |
| Territory | Worldwide with trip limits | Worldwide, unrestricted |
| Newly acquired property | None until renewal | Automatic 30 days (90 for fine arts) |
Worked example: A client owns a $30,000 diamond bracelet. Under HO-3 alone, a theft pays $1,500 (the jewelry sublimit) minus any deductible, and a mysterious disappearance (no forced-entry evidence) may pay nothing. Schedule the bracelet on HO 04 65: the same loss pays the full $30,000 agreed value, with no deductible, anywhere in the world, and mysterious disappearance is covered. That single contrast — sublimit/named-peril/deductible versus agreed-value/open-peril/no-deductible — is the most-tested idea in this section, so be ready to compute both outcomes from one fact pattern.
Blanket vs. Scheduled, and Partial-Loss Settlement
Collections may be written two ways. A scheduled approach lists each item with its own agreed value — best for unique, high-value pieces. A blanket approach insures the whole collection under one limit without itemizing — convenient for stamp and coin collections with many low-value pieces, but the carrier may require any single item over a stated amount (often $1,000-$2,500) to be scheduled separately. On a partial loss the carrier pays the cost to repair or restore the item, not the full agreed value; agreed value applies only when the item is a total loss.
Candidates frequently overpay a damaged-but-repairable item in scenarios by reaching for the scheduled amount.
Inland Marine Concepts on the Exam
- Floater — coverage that follows mobile property anywhere
- Bailee exposure — when others' property is in the insured's care (less common on personal lines but tested as a concept)
- Trip transit — coverage while goods are in transit, e.g., moving a fine-art piece
Premium and Documentation Checklist
| Step | Requirement |
|---|---|
| Identify item value | Above the relevant HO sublimit triggers a schedule recommendation |
| Obtain appraisal | Within 3-5 years for jewelry/fine arts |
| Choose blanket vs. scheduled | Scheduled for unique pieces; blanket for many small ones |
| Confirm open-peril/agreed-value terms | No deductible, worldwide territory |
| Set newly-acquired reporting reminders | 30 or 90 days |
An insured schedules a $25,000 ring on HO 04 65 with no deductible. The ring vanishes from a hotel safe abroad with no proof of forced entry. The homeowners deductible is $2,500. What does the policy pay?
An insured has $20,000 of cameras scheduled on a PAF. On June 1 the insured buys a $4,000 lens, intending to schedule it at the October renewal. On June 20 the lens is stolen before the carrier is notified. The auto-acquisition limit is 25% of the class limit. How does the floater respond?