Should You Add Floater Insurance to Your Home Insurance?
Floater insurance provides additional coverage beyond the standard coverage in your home insurance policy. When should you add floater insurance to your home insurance?
You should consider adding floater insurance to your home insurance policy when you own high-value items, such as art or wine collections, that exceed the standard coverage limits of your policy.
Here are some common scenarios where floater insurance might be necessary:
- Jewelry and watches: Expensive jewelry, watches, or other precious items.
- Collectibles: Art, antiques, coins, stamps, wine, or other collectibles.
- Electronics: High-end electronics like cameras, computers, or gaming consoles.
- Musical instruments: Expensive musical instruments, especially those that are unique or custom-made.
- Furs and fine clothing: Expensive furs, designer clothing, or other luxury items.
It's important to note that standard home insurance policies often have limitations on the amount of coverage for specific items. If your valuables exceed these limits, a floater policy can provide the additional coverage you need.
How does floater insurance work?
- Appraisal: You'll need to have your valuable items, such as jewelry, appraised to determine their value.
- Policy coverage: You'll purchase a floater policy that covers the appraised value of your items.
- Coverage: The policy will cover your items for loss or damage, regardless of location, as long as they're listed on the policy.
Types of floater insurance
Personal article floater:
- Covers high-value personal items such as jewelry, cameras, musical instruments, and fine art.
- Can be a separate policy or an endorsement added to a homeowner's insurance policy.
Commercial property floater:
- Protects business assets that are not stored at a fixed location.
- Commonly used by construction companies, carnivals, and businesses with mobile equipment.
Installation floater:
- Specifically designed for subcontractors.
- Covers materials, machinery, equipment, and supplies from the moment they leave the premises until job completion.
- Provides full coverage for items that may exceed standard policy limits.
- Protects items even when they are outside the home or business premises.
- Offers flexibility for businesses with mobile operations or valuable equipment.
- Can be tailored to cover specific high-value items individually.
- Floater insurance is particularly useful for protecting valuable possessions that may not be adequately covered by standard insurance policies, ensuring comprehensive protection for both individuals and businesses.
Coverage and benefits
- Provides full coverage for items that may exceed standard policy limits.
- Protects items even when they are outside the home or business premises.
- Offers flexibility for businesses with mobile operations or valuable equipment.
- Can be tailored to cover specific high-value items individually.
- Floater insurance is particularly useful for protecting valuable possessions that may not be adequately covered by standard insurance policies, ensuring comprehensive protection for both individuals and businesses.
Replacement cost vs. actual cash value
You should also check your home insurance policy to see if you will be compensated for the actual cash value or replacement cost of a stolen item should you make a claim.
Actual cash value is what the item is worth now. Replacement cost is what it would cost to replace the item.
Most homeowners prefer policies that will compensate them with the replacement cost of an item, not the actual cash value.
Did you know? If you have an item appraised, typically you will receive a written report that includes a complete description and an explanation of how the estimate was determined.
