And it is for this reason that there is a thriving industry in repairing and cleaning damaged and stained hotel furniture. “Before and after” photographs from one furniture re- pair company, which show repair to damaged and stained furniture, are posted at www.hotelfurniture repair.com.
If too much furniture in a given hotel is damaged too badly to be repaired or cleaned, and the furniture at issue can no longer be purchased, the hotel can preserve its matching décor only by replacing all of its furniture, damaged or not.
That is exactly what policyhold- ers seek to do when they pursue their matching furniture coverage after a disaster.
The language that requires re- placement of matching furniture in a given first party property dam- age policy generally is found in one of two clauses—the “pair and set” clause or the “consequential damages” clause that incorporates similar “pair and set” language. Each of these clauses is based on a form, and thus may be discussed without reference to a given policy.
The “pair and set” clause in- cluded in most first party property damage policies provides:
...in the event of loss or damage by a peril insured against to any arti- cle or articles which are part of a pair or set, the measure of loss or damage to such article or articles shall be, at the Insured’s option:
It is readily apparent that this language provides for the replace- ment of all furnishings necessary to ensure uniformity in hotel décor.
As an initial matter, it is obvious that hotel furniture is “part of a pair or set.” The relevant Webster’s definition of “set” is “a number of things of the same kind that belong or are used together.” Webster’s Ninth New Collegiate Dictionary (1984) at 1077. Given that definition, there is little doubt that hotel furniture is a “set,” as room furnishings are obviously “things of the same kind that . . . are used together” throughout a hotel.
The question thus should not be whether there is “pair and set” coverage when hotel furniture is damaged, but rather the scope of that coverage.
The “pair and set” clause ex- pressly provides that the “Insured” is entitled to elect one of two mea- sures of loss when part of a set is damaged: (a) the value of that part of the set that was damaged or (b) the value of the entire set, as long as the policyholder gives the remainder of the set to its insurer.
It is the latter option that entitles a policyholder to full replace- ment of all the furniture in a hotel should some of the furniture be rendered unusable by a natural disaster. Moreover, in light of the insurer’s cry of “windfall,” it is of note that such option is expressly...