What amount will the HO-3 insurer pay for the loss of Sam's boat and trailer valued at $4,000?

In the context of homeowners insurance policies like the HO-3, the coverage for personal property typically extends to items like boats and trailers, but there are specific limits and conditions that apply. When evaluating the coverage provided for personal property under this type of policy, it’s important to consider any applicable limits for specific categories of items.

For personal property, the HO-3 policy generally covers items at their actual cash value, but certain items may have specific sub-limits. In this case, while Sam's boat and trailer are valued at $4,000, the policy might impose a limit on the payout for personal property of this nature. If the policy has a specific limit for boats and trailers, it might only allow reimbursement up to that limit, which is the scenario where $1,500 comes into play.

Thus, an amount of $1,500 could reflect the policy's specific limitation for boats and trailers, illustrating how the total coverage may not equate to the full market value of the property in question. This distinction helps insured individuals understand the limits of their coverage and the importance of reviewing their policy thoroughly to be aware of the conditions and limits that can affect claims.