What does the pair and set clause stipulate in insurance policies?

The pair and set clause in insurance policies addresses how claims involving pairs or sets of items are handled when one part of the pair or set is lost, damaged, or destroyed. This clause specifically states that the insurer will only pay for the loss of the damaged item, not the entire set or pair. The principle behind this clause is that when one item in a pair or set is affected, the total value may still be less than if the entire set needed to be replaced.

In other words, if an insured item is part of a pair or a set, and that item suffers a loss, the insurance policy will cover only the amount relative to the value of the affected item, rather than compensating for the entire set. This ensures that the policy adheres to the principle of indemnity, which is designed to restore the insured to the same financial position as before the loss without enabling them to profit from their insurance coverage.

Therefore, stating that the insurer pays for lost, damaged, or destroyed items only reflects the function of the pair and set clause accurately.