Floater coverage is a type of property insurance designed to protect movable property. This category of insurance is unique because it covers items that are not fixed in one location and can be moved from place to place. Floater coverage can be structured on a scheduled or unscheduled basis, providing flexibility in how different types of property are insured.
Scheduled vs. Unscheduled Floater Coverage
Scheduled Floater Coverage
Scheduled floater coverage specifies individual items within the policy. Each item is listed explicitly, along with its respective value, ensuring tailored protection for high-value or unique items. For example, a professional photographer might insure each camera, lens, and piece of equipment separately.
Unscheduled Floater Coverage
Unscheduled floater coverage offers a blanket insurance amount that covers all items within a category up to a specified limit. This kind of coverage is more general and might be used for less valuable or more interchangeable items. An artist, for example, might use unscheduled coverage for their tools and supplies as a combined total.
Applicability and Use Cases
Personal Property
Individuals can use floater coverage for personal items such as jewelry, fine art, musical instruments, and electronics which frequently move with them.
Business Property
Businesses often use floater coverage for items that are integral to their operations and regularly transported, such as construction equipment, tools, and laptops.
Marine and Inland Marine Insurance
Floater coverage is a fundamental component of marine and inland marine insurance, providing protection for cargo in transit over land and sea.
Historical Context
The concept of floater coverage has evolved significantly over time, with its origins in marine insurance. As trade and commerce expanded, the need for insuring goods in transit grew, leading to more specialized policies like the inland marine insurance, which eventually developed to include floater coverage.
Comparison with Other Insurance Types
Standard Homeowner’s Insurance
Standard homeowner’s insurance typically covers items within the home up to certain limits and may not extend coverage for valuable items or property moved outside the home.
Scheduled Personal Property Endorsement
This is an add-on to homeowner’s or renter’s insurance that offers similar benefits to scheduled floater coverage, focusing on particular high-value items without encompassing a broad range of property.
Related Terms
- All-Risk Insurance: A type of insurance covering a wide range of perils except those explicitly excluded in the policy.
- Inland Marine Insurance: Insurance providing coverage for property in transit over land.
- Endorsement: An amendment or addition to an existing insurance policy which changes the terms or scope of the original policy.
Frequently Asked Questions
Is Floater Coverage Expensive?
The cost varies based on the item’s value, risk factors, and whether the coverage is scheduled or unscheduled. Generally, scheduled coverage can be more expensive due to the tailored protection provided.
Can I Add Floater Coverage to My Existing Policy?
Yes, many insurers allow you to add floater coverage to an existing homeowner’s or renter’s policy through an endorsement.
Are There Deductibles in Floater Coverage?
Yes, like most insurance policies, floater coverage usually includes a deductible, which is the amount you pay out of pocket before insurance kicks in.
References
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Insurance Information Institute. (n.d.). Understanding Floater Policies. Retrieved from III.org.
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National Association of Insurance Commissioners. (n.d.). Property and Casualty Insurance Basics. Retrieved from NAIC.org.
Summary
Floater coverage is essential for insuring property that moves from one location to another, offering scheduled or unscheduled protection based on the insured’s need. This versatile insurance form originated from marine insurance practices and is now crucial for both personal and business property protection. Understanding its applications, differences from other types of insurance, and cost considerations helps individuals and businesses make informed decisions about their property insurance needs.
