Georgia Property & Casualty Practice Exam

What is the maximum amount of liability coverage provided for personal property, excluding firearms, under a homeowners policy?

1. No limit applies.

2. $10,000

3. $20,000

4. $50,000

The correct answer is: No limit applies.

Homeowners policies typically include coverage for personal property, which protects the insured's belongings against risks such as theft, fire, and certain types of damage. However, there are specific limits set for different categories of personal property, and while firearms are specifically noted as an exclusion from the general personal property coverage limit, the correct answer reflects that there may not be a predefined maximum limit applicable to other types of personal property. In many homeowners policies, the coverage for personal property does not have an explicitly stated cap, meaning that losses would be covered up to the policy limits of the dwelling itself. This results in a general understanding that certain categories of property, unless otherwise specified, can be covered without a strict dollar limit. This flexibility allows homeowners to have protection for vast amounts of personal belongings, provided they are covered under the policy terms. The other options represent specific dollar amounts that suggest limitations that do not generally apply to the entirety of personal property coverage in a homeowners policy. Thus, the maximum liability coverage for personal property under standard homeowners policies aligns with the idea that no strict limit applies to this category, barring specific exclusions or endorsements that modify this coverage.