Why Is There a "Special Limits of Liability" Section in the Personal

question 23

Essay

Why is there a "special limits of liability" section in the personal property section of the HO-2 contract?

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Definitions:

Average Tax Rates

The ratio of the total amount of taxes paid to the total income, showing the fraction of income paid in taxes.

Regressive Tax

A tax imposed in such a manner that the tax rate decreases as the amount subject to taxation increases, disproportionately affecting those with lower incomes.

Tax Rate Structure

The framework defining how tax rates progress based on variables such as income level, value of property, or volume of transaction.

Proportional Tax

A tax system where the tax rate remains constant regardless of the amount of the taxable income or goods.