Floater Insurance
Floater insurance is a type of insurance policy that covers easily movable personal property and provides additional coverage that standard insurance policies do not. It can cover anything from jewelry and furs to expensive stereo equipment and is also known as a "personal property floater."
How Floater Insurance Works
Some items are frequently not fully covered by homeowners insurance. The addition of a floater policy ensures that the full value will be replaced in the event of theft, loss, or damage. These policies typically cover a single item, so if you have multiple items that require full coverage, you will need to obtain a floater for each.
A standard homeowners insurance policy covers jewelry and other valuable items against all perils specified in your policy (such as fire, windstorm, theft, and vandalism). Certain valuables, however, have limitations.
Jewelry and other small valuable items are easily stolen, increasing the risk. To keep coverage affordable, standard homeowners policies typically provide only about $1,500 in coverage for such items, which means the insurer will not pay more than that amount for any given piece of jewelry or other valuable item.
Floater insurance typically covers the following items:
- Fine Art- Such things as antiques, books, china, crystal, collectibles, fine arts, furniture, glass, lithographs, mirrors, rugs, tapestries, paintings, pictures, sculptures, and silverware
- Firearms- Both antique and modern
- Cameras- Any type of camera, projector, and audio-visual equipment for personal, not professional, use.
- Sporting Equipment- Golf, surfing, tennis, or other recreational equipment not intended for professional use.
- Musical Instruments- Pianos, guitars, electronics, and other types of music equipment for personal use only, not professional use
- Postage Stamps- Stamps and other related items
- Collections- Collectible coins (including gold and silver), baseball cards, comics, LPs and CDs, and other collections
Special Considerations
There are two ways for those who own jewelry, furs, collectibles, or other expensive or irreplaceable items to increase insurance coverage to levels more in line with the value of those items.
Floater Policy
This entails getting a floater policy and scheduling your personal valuables. This insurance option provides the most comprehensive protection for valuables. Floaters cover all types of losses, including those that your homeowners insurance policy does not cover, such as accidental losses, such as dropping a ring down the drain or leaving an expensive watch in a hotel room. Items intended for coverage must be appraised by a professional before you can purchase a floater.
It is critical to review floater policies every two or three years to ensure that valuations are up to date. You should also add new purchases, particularly those received as birthday or holiday gifts.
Raise Liability Limits
This is less expensive than purchasing a separate floater policy, but coverages for individual pieces and overall losses are limited. For example, an individual item's coverage limits could be $2,000, with a total limit of $5,000.
Example of Floater Insurance
Susan recently purchased a $50,000 piece of jewelry. She purchases a floater insurance policy to protect the piece from theft and damage.
As part of the insurance process, her jewelry is appraised by a reputable jeweler to determine whether it is genuine and worth the price quoted. As a result, the insurance company charges a premium of 1% of the piece's assessed value, or $500.
For the piece, there are two types of claims available. The first will cover the cost of the piece's repairs, while the second will replace it at full value. Because the value of jewelry does not depreciate over time (and in some cases increases), the insurance company will only pay Susan a certain amount in either case.