Floater insurance is a policy that provides additional coverage for movable property. Unlike standard insurance policies that often cover only specific, stationary items at a fixed location, floater insurance is designed to protect assets that are not confined to a single site. These assets can include valuable personal items such as jewelry, electronics, artwork, and professional equipment that are often transported or used in multiple locations.
Definition and Features
Standard Definition
Floater insurance, also known as a “personal articles floater,” offers flexible and comprehensive coverage for high-value or easily movable assets that may not be entirely protected under a standard homeowners or renters insurance policy.
Key Features
- Flexibility: Covers items that can be moved from one location to another.
- Comprehensive Protection: Provides protection not just against theft or damage but also other risks like loss and mysterious disappearance.
- Valuable Assets: Intended for items with significant monetary value such as jewelry, cameras, musical instruments, and sports equipment.
- Worldwide Coverage: Often, floater insurance provides worldwide protection, not limiting the coverage to a specific geographical area.
Types of Floater Insurance
Personal Floater
This type of policy covers personal belongings that may be frequently transported or used in various locations, such as:
- Jewelry
- Electronics
- Artwork
- Instruments
Commercial Floater
Designed for businesses, this policy insures movable properties used professionally that may be transported for work-related purposes:
- Technical equipment
- Tools
- Portable machinery
- Trade show exhibits
Special Considerations
Valuation
Items covered under floater insurance usually require a professional appraisal to ascertain their value accurately. This ensures appropriate coverage limits and premium calculations.
Premiums and Deductibles
Premiums for floater insurance depend on the item’s appraised value and the level of risk associated with it. Deductibles are typically negotiated during policy purchase, balancing between premium costs and out-of-pocket expenses in the event of a claim.
Examples of Floater Insurance Applications
Jewelry Coverage
- An individual has an engagement ring valued at $10,000. Standard homeowners’ insurance covers up to $1,500. A floater policy can cover the full $10,000, protecting against theft, loss, or damage.
Musical Instruments
- A professional musician using several high-value instruments needs worldwide coverage to ensure they are protected during travels for performances or tours.
Historical Context
Floater insurance traces back to marine insurance, where merchants used policies to protect goods transported by ships. Over time, this concept was adapted for terrestrial use to cover expensive and portable personal or business items, evolving into the coverage we know today.
Applicability
Floater insurance is particularly useful for individuals or businesses with high-frequency use or transportation of valuable items. It ensures that the protection extends beyond the confines of a home or business premises, offering peace of mind to the insured.
Comparisons
Floater Insurance vs. Homeowners Insurance
- Homeowners Insurance: Covers structures and personal belongings within the home with certain value limits.
- Floater Insurance: Specifically covers movable personal or business items with generally no geographical limits.
Related Terms
- Endorsement: An addition to an existing insurance policy that modifies coverage.
- Scheduled Property: Specific items listed on an insurance policy for individual coverage.
- Umbrella Policy: Provides additional liability coverage beyond the limits of primary policies.
Frequently Asked Questions (FAQs)
Is floater insurance expensive?
The cost varies based on the value and risk associated with the insured items but typically provides reasonable premiums for the coverage offered.
Do I need a separate floater policy for each item?
Not necessarily. Many insurers allow multiple items to be covered under a single policy, provided each is listed and properly appraised.
How do I file a claim?
Contact your insurer, provide proof of ownership and value (appraisals or receipts), describe the loss event, and submit the necessary documentation.
References
- “Insurance Information Institute: What is a Floater?” - www.iii.org
- “Understanding Floater Insurance” - www.investopedia.com
Summary
Floater insurance offers essential supplemental coverage for movable and valuable items that standard policies may not adequately protect. It ensures comprehensive protection for personal and commercial movable property, providing peace of mind and financial security to the insured. As a flexible and often worldwide coverage solution, floater insurance is a crucial aspect of a robust insurance strategy.
