Definition
Floater refers to coverage for property that moves from one location to another, either on a scheduled or unscheduled basis. If the floater covers scheduled property, each item is listed and insured individually. If the floater covers unscheduled property, all items are covered for the same insurance limits.
Examples
- Jewelry Floater: A floater added to a homeowner’s insurance policy to provide additional coverage for valuable jewelry pieces that are routinely worn and moved to different locations.
- Camera Equipment Floater: A professional photographer might use a floater to insure various pieces of camera equipment that are frequently taken to different shoot locations.
- Musical Instrument Floater: Musicians who travel frequently may utilize a floater to ensure their valuable instruments are covered regardless of where they are taken.
- Art Exhibit Floater: Galleries or individual collectors often use floaters to insure art exhibits as they move between different exhibition venues.
Frequently Asked Questions (FAQs)
What is the difference between scheduled and unscheduled floater coverage?
Scheduled floater coverage lists and insures each individual item separately with specified coverage amounts, while unscheduled floater coverage insures all property for the same limits of insurance without listing each item individually.
Why would someone need a floater policy?
A floater policy is useful for individuals or businesses that own valuable items which are frequently transported or moved from one location to another, ensuring continuous coverage and protection.
Is a floater policy only for personal property?
No, floater policies can cover both personal and business property. For instance, businesses might use floaters to cover tools, equipment, or inventory that is regularly moved or used in different locations.
Does a floater policy cover all risks?
Floater policies can be for “all-risk” or “named-perils.” An all-risk policy covers all perils except those explicitly excluded, while a named-perils policy only covers events specifically listed.
How is the premium for a floater policy determined?
The premium typically depends on the value of the items covered, the amount of coverage, and factors such as the frequency and distance of item movements.
Related Terms
Inland Marine Insurance: A type of insurance designed to cover property in transit over land, including property being transported by various means or associated with transportation risks.
Scheduled Personal Property Endorsement: An add-on to standard homeowners or renters insurance that provides additional coverage for high-value items like jewelry, furs, and electronics, often equivalent to scheduled floaters.
All-Risk Insurance: Covers all perils except those specifically excluded in the policy terms. It is a broad form of coverage that can be included within floater policies for extensive protection.
Named-Perils Insurance: Provides coverage only for events specifically listed in the policy, unlike all-risk insurance, which can be more restrictive.
Online References
- Investopedia - Detailed explanation of what a floater is and its applications.
- NAIC - National Association of Insurance Commissioners (NAIC) provides thorough insights into different types of insurance, including floaters.
Suggested Books for Further Studies
- “Insurance for Dummies” by Jack Hungelmann
- “Principles of Risk Management and Insurance” by George E. Rejda and Michael McNamara
- “The Handbook of Insurance” by Georges Dionne
- “Property and Casualty Insurance Concepts Simplified” by Christopher J. Boggs
Fundamentals of Floaters: Insurance Basics Quiz
Thank you for exploring the concept of floater insurance and testing your knowledge with our quiz. Keep learning to ensure you have a solid understanding of insurance principles!
