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Form PM 00 09: Personal Articles Standard Loss Settlement Form

What the form is:

The PM 00 09, Personal Articles Standard Loss Settlement Form, is a crucial component of a Personal Inland Marine policy designed to provide scheduled coverage for valuable personal articles. Unlike a standard homeowners policy, which often has limitations on the coverage for high-value items, this form allows individuals to list specific articles and insure them for their appraised value. It is used in conjunction with the PM 00 01 (Common Policy Provisions) and often with specific class forms (e.g., for jewelry, fine arts, etc.) or can be used to cover several types of property under one form. This form specifically outlines the standard loss settlement provisions, which dictate how losses will be paid. This is distinct from an "agreed value" loss settlement (which would typically be found in form PM 00 10). Coverage is often on an 'all-risk' or 'open peril' basis, meaning the items are covered for all types of losses unless specifically excluded in the policy.

Classes of business it applies to:

This form is used in Personal Inland Marine insurance. It is not for commercial use. It applies to individuals and their resident relatives who wish to insure valuable personal possessions that may exceed the coverage limits or types of perils covered under their standard homeowners or renters insurance. Real-world examples of when this form would be used include:

• An individual with a significant jewelry collection wants to ensure each piece is covered for its appraised value against risks like theft or mysterious disappearance.
• A musician who owns several expensive instruments needs worldwide coverage as they travel for performances.
• An art collector requires specialized coverage for their paintings and sculptures, which might include provisions for breakage or damage during transit.
• Someone with a valuable stamp or coin collection needs protection against specific risks relevant to collectibles.
• Other covered items can include furs, cameras, silverware, and golfer's equipment.

Special considerations:

• Standard vs. Agreed Value: The PM 00 09 outlines a standard loss settlement. This typically means that in the event of a covered loss, the insurer will pay the lowest of the following: the cost to repair the item, the item's actual cash value (ACV), the replacement cost, or the applicable policy limit. This differs from an "agreed value" settlement (form PM 00 10), where the insurer pays the amount for which the item is listed on the policy schedule, regardless of current market value or depreciation, though this option may come with a higher premium.
• Scheduling is Key: For coverage to apply to a particular item, it generally must be specifically listed (scheduled) on the policy declarations, along with its description and insured amount. An exception can be for unscheduled property subject to a blanket limit, particularly for classes like Fine Arts.
• Appraisals and Documentation: Current appraisals or bills of sale are usually required to establish the value of the scheduled items at the time the policy is written. This documentation is crucial for a smooth claims process.
• Worldwide Coverage: Personal articles floaters often provide worldwide coverage, meaning the items are protected even when temporarily away from the insured's residence, such as during travel.
• No Deductible (Typically): Many personal articles floaters do not require a deductible, although choosing one might reduce the premium.
• Relationship to PM DS 00: The PM DS 00 is likely a declarations page that would be used in conjunction with the PM 00 09 and PM 00 01 to detail the specific articles insured, coverage limits, premiums, and other policy-specific information. The PM 00 09 provides the loss settlement terms, while the declarations page personalizes the policy to the insured.

Key information for agents and underwriters:

• Risk Assessment: Underwriters will carefully assess the type and value of the articles being insured. High-value items, especially jewelry and fine arts, may require specific security measures (e.g., home alarms, safes) or in-vault storage requirements for certain coverage to apply. The vulnerability of items to theft, damage, or fraudulent claims is a key consideration.
• Pricing: Premiums will be based on the type of articles, their appraised values, the desired coverage level (standard vs. agreed value, though PM 00 09 is standard), the insured's loss history, and geographical location. Some insurers may offer reduced rates for items with security features, like gemprinted jewelry.
• Coverage Gaps with Homeowners: Agents should clearly explain the limitations of standard homeowners policies for valuable articles (e.g., sublimits for theft of jewelry, no coverage for "mysterious disappearance" for some items) to highlight the need for a personal articles floater.
• Loss Settlement Explanation: It's critical for agents to ensure clients understand the "standard loss settlement" provision of the PM 00 09. Clients might assume they will receive the full scheduled amount, but under standard settlement, the payout could be the ACV or repair cost if that is less. If a client desires the certainty of receiving the scheduled amount, an Agreed Value form (PM 00 10) would be more appropriate.
• Newly Acquired Property: Policies often include a provision for newly acquired property, providing temporary coverage for a limited time (e.g., 30 days) and up to a certain percentage of the total scheduled value, but these items must typically be reported to the insurer within that timeframe to maintain coverage.
• Exclusions: While 'all-risk' coverage is broad, common exclusions include wear and tear, deterioration, inherent vice, insects, or vermin. Breakage of fragile articles might only be covered if caused by specific perils like fire, theft, or an accident to a conveyance.
• Pairs and Sets: For losses involving items that are part of a pair or set, the PM 00 09 may specify that the insurer will pay the full amount shown for the pair or set if the insured surrenders the remaining article(s) to the insurer.