Definition
A Personal Property Floater (PPF) is an insurance policy extension that provides coverage for all personal property owned by the insured, regardless of their location and the location of household residents. This includes personal belongings such as clothing, electronics, musical instruments, jewelry, and more. The coverage is written on an all-risk basis but excludes certain perils like war, wear and tear, mechanical breakdown, vermin infestation, and nuclear disasters. Additionally, the policy can extend to cover damage to real property resulting from the theft of personal property.
Examples of Personal Property Covered
- Clothing: From everyday wear to high-value items.
- Electronics: Televisions, radios, computers, and cameras.
- Musical Instruments: Guitars, pianos, violins, etc.
- Jewelry and Watches: Engagement rings, necklaces, luxury watches.
- Furs: Fur coats and related apparel.
- Furniture and Appliances: Sofas, beds, refrigerators, and microwaves.
Frequently Asked Questions
What is an all-risk basis?
An all-risk policy covers an insured’s property for all types of risks except those explicitly excluded in the policy. This means almost any sudden and accidental loss or damage is covered, except for the specified exclusions.
What perils are typically excluded under a Personal Property Floater?
Exclusions usually include war, wear and tear, mechanical breakdown, damage from vermin, and nuclear disasters. It’s essential to review the policy for the exact list of exclusions.
Can the PPF cover children away at school?
Yes, a personal property floater extends coverage to household residents, including children away at school, protecting their belongings even while they are not at home.
Is real property covered under a PPF?
Generally, real property is not covered under a personal property floater. However, if theft of personal property results in damage to real property, such damage may be covered.
How does this differ from a standard homeowner’s insurance policy?
A homeowner’s insurance policy provides coverage for personal property but often has limitations on the amount and type of property insured. A personal property floater allows for higher coverage limits and can include specific high-value items that a standard policy may not cover sufficiently.
- Homeowner’s Insurance: A type of property insurance that covers losses and damages to an individual’s house and assets within the home.
- Rider: An add-on provision to a basic insurance policy that provides additional benefits or coverage.
- All-Risk Insurance: Insurance covering all perils not specifically excluded from the policy.
- Scheduled Personal Property Endorsement: Additional coverage under a homeowner’s policy for high-value items.
Online References
Suggested Books for Further Studies
- “Property and Casualty Insurance Concepts Simplified” by Christopher J. Boggs
- “Insurance and Risk Management for Dummies” by Jack Hungelmann
- “The Handbook of Insurance” edited by Georges Dionne
Fundamentals of Personal Property Floater: Insurance Basics Quiz
### What does a Personal Property Floater cover?
- [x] All personal property of the insured regardless of location
- [ ] Only personal property at the insured’s primary residence
- [ ] Real property owned by the insured
- [ ] Vehicles owned by the insured
> **Explanation:** A Personal Property Floater covers all personal property of the insured regardless of location, including belongings of household residents and children away at school.
### On what basis is a Personal Property Floater written?
- [x] All-Risk basis
- [ ] Named perils basis
- [ ] Depreciation-adjusted
- [ ] Actual cash value
> **Explanation:** A Personal Property Floater is written on an all-risk basis, covering all types of risks except those explicitly excluded in the policy.
### Which of the following is typically excluded under a Personal Property Floater?
- [ ] Theft
- [x] War
- [ ] Fire damage
- [ ] Flood
> **Explanation:** War is typically excluded under a Personal Property Floater. Other exclusions include wear and tear, mechanical breakdown, vermin, and nuclear disasters.
### Does the Personal Property Floater cover real property?
- [ ] Yes, it covers all types of real property.
- [ ] Only if specifically mentioned in the policy.
- [ ] Yes, for new constructions only.
- [x] The floater primarily covers personal property, but may cover damage to real property resulting from the theft of personal property.
> **Explanation:** While primarily covering personal property, the floater may provide coverage for damage to real property resulting from theft of personal property.
### How does a Personal Property Floater benefit children away at school?
- [x] It provides coverage for their personal property wherever they are located.
- [ ] It insures their tuition fees.
- [ ] It covers their traveling expenses.
- [ ] It insures only the items kept at their permanent home.
> **Explanation:** A Personal Property Floater extends coverage to household residents, including children away at school, protecting their belongings regardless of location.
### What is one major advantage of a Personal Property Floater over standard homeowner’s insurance?
- [ ] It lowers insurance premiums.
- [ ] It covers more types of real property.
- [x] It allows for higher coverage limits on personal property.
- [ ] It provides coverage without the need for an insurance policy.
> **Explanation:** A Personal Property Floater allows for higher coverage limits on personal property, which can include specific high-value items that a standard policy may not adequately cover.
### Is mechanical breakdown typically included under a Personal Property Floater?
- [ ] Yes, it is always included.
- [x] No, it is usually excluded.
- [ ] Only for electronics.
- [ ] It depends on the state regulations.
> **Explanation:** Mechanical breakdown is typically excluded from coverage under a Personal Property Floater.
### Who benefits from adding a Personal Property Floater to their insurance policy?
- [ ] Individuals with only real property insurance.
- [x] Individuals possessing high-value personal property.
- [ ] Homeowners with no personal belongings.
- [ ] Renters with minimal assets.
> **Explanation:** Individuals possessing high-value personal property benefit from adding a Personal Property Floater as it provides higher coverage limits and additional protection.
### What is 'wear and tear' in terms of Personal Property Floater exclusions?
- [ ] Normal, unavoidable depreciation of value
- [ ] Damage due to fire or flood
- [x] Normal, expected deterioration of property over time
- [ ] Damage intentional caused by the insured.
> **Explanation:** 'Wear and tear' refers to the normal, expected deterioration of property over time, which is typically excluded from coverage under a Personal Property Floater.
### Can a Personal Property Floater be customized for specific items?
- [x] Yes, it can include specific high-value items with detailed coverage.
- [ ] No, it only provides generic coverage for all items.
- [ ] Only for musical instruments.
- [ ] Only if the insured pays a premium.
> **Explanation:** A Personal Property Floater can be customized to include specific high-value items with detailed coverage, offering more protection than generic policies.
Thank you for exploring the extensive coverage options and details of a Personal Property Floater. Test your understanding and ensure you’re fully protected against the unexpected!
