insurance

Pair and Set Clause

An insurance policy provision that addresses how claims are handled when only part of a matched set or pair of items is damaged or lost. The clause typically limits the insurer's liability to only the damaged item plus a reasonable amount for the loss of value to the remaining items.

Example

“When one earring from Sarah's diamond pair was stolen, the pair and set clause in her homeowners policy covered both the replacement cost of the lost earring and depreciation of the remaining one.”

Memory Tip

Think 'pair problems' - when you lose one shoe from a pair, the other becomes less valuable, and this clause addresses that issue.

Why It Matters

This clause protects policyholders from being stuck with a single item from a pair that has little value on its own. Without it, you might only receive compensation for one earring while being left with a worthless mate, creating significant financial loss beyond the actual item stolen or damaged.

Common Misconception

Many people assume they'll automatically receive full replacement cost for an entire set if one piece is damaged. In reality, the clause often limits payment to the damaged item plus a percentage for depreciation of the remaining pieces, rarely covering full set replacement unless specifically stated.

In Practice

Consider a $10,000 diamond earring set where one earring is lost. Under a typical pair and set clause, the insurer might pay $5,000 for the lost earring plus 25% of the remaining earring's value ($1,250) for depreciation, totaling $6,250. The policyholder keeps the remaining earring but receives compensation for its reduced value as a single item rather than part of a matched pair.

Etymology

The term originates from traditional property insurance language, reflecting the need to address partial losses to matched items like jewelry sets, collectibles, or furniture suites.

Common Misspellings

pair and set clauspare and set clausepair and sit clausepear and set clause

Related Terms

Partial Loss Actual Cash Value

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