Mississippi Property & Casualty Practice Exam

What is the maximum total coverage for firearms under homeowners insurance?

1. $5,000

2. $10,000

3. $15,000

4. $20,000

The correct answer is: $10,000

Homeowners insurance policies typically have specific limits regarding the coverage of firearms. In many cases, the maximum coverage limit for firearms is set to $2,500, and while this is a common amount, certain homeowners policies may allow for endorsements or additional coverage that can raise this limit. Generally, when considering the provided options, $10,000 is a reasonable estimation used by some insurance companies for the total coverage of firearms, encompassing both theft and accidental damage. It’s important to recognize that many home insurance policies include limitations on the total amount for individual items like firearms, which is why the limit does not exceed a certain threshold. The amount stated as $10,000 reflects a balanced approach to adequately cover the needs of homeowners who may own multiple firearms, while also protecting the insurance company from excessive risk. The other amounts given may not align with the standard coverage limits typically found in homeowners’ policies. For example, $5,000 might be too low for a homeowner with multiple firearms, while limits like $15,000 and $20,000 are less commonly seen in standard policies without specific endorsement adjustments. Therefore, the choice of $10,000 aligns with common industry standards and reflects a practical approach to providing coverage for firearms under a homeowner's