insurance

Floater

An insurance policy or endorsement that provides additional coverage for specific high-value personal items like jewelry, art, or collectibles that exceed the limits of standard homeowners insurance. Floaters typically cover items regardless of location and often include protection against a broader range of risks including accidental loss.

Example

“Jennifer added a jewelry floater to her homeowners policy to ensure her $15,000 engagement ring would be fully covered even if she lost it while traveling.”

Memory Tip

A floater 'floats' with your valuable items wherever they go - like a life preserver that follows your treasures around to keep them protected.

Why It Matters

Standard homeowners policies typically limit coverage for jewelry, electronics, and collectibles to $1,000-$2,500, leaving owners significantly underinsured for expensive items. Floaters ensure full replacement value and broader coverage, protecting against financial losses that could reach tens of thousands of dollars.

Common Misconception

Many people assume their homeowners insurance fully covers all personal belongings at replacement cost, but standard policies have sub-limits for categories like jewelry, electronics, and art. Additionally, some think floaters are expensive, when they often cost only $1-$2 per $100 of coverage annually for most items.

In Practice

A collector owns a vintage guitar worth $8,000, but their homeowners policy only covers musical instruments up to $1,500. They purchase a floater for the guitar at a cost of approximately $80 per year. When the guitar is stolen from their car during a concert, the standard homeowners policy would pay only $1,500, but the floater covers the full appraised value of $8,000, minus any applicable deductible.

Etymology

The term 'floater' originated in marine insurance, describing coverage that 'floated' with cargo as it moved between locations, later adopted for personal property that moves with the owner.

Common Misspellings

FloterFloatterFlotterFloater Policy

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