When you think of ways to protect your personal belongings, home insurance is probably right up there on your list. After all, it’s designed to cover the personal belongings inside your home or on your property. However, most policies only cover damages up to a certain amount and may not sufficiently cover – or even refuse to cover – particularly expensive items. That’s where floater insurance comes in.
In this article, you’ll learn what floater insurance is and how it complements your home insurance policy. You’ll also find a list of questions to consider, helping you decide if floater insurance is the right fit for you and your most prized possessions.
What Is a Floater in Insurance?
A floater in insurance is an add-on to your home, condo, or tenant insurance policy that covers high-value items at their full appraised value if they are lost or damaged due to a covered peril. By extending coverage beyond what a standard policy offers, a floater ensures that expensive and valuable individual items are fully protected.
While it may sound like a policy more appropriate for boats or other aquatic equipment, floater insurance gets its name because it protects easily movable property, even when it’s not at home. In other words, the insured items can “float” or move from place to place and still remain protected.
While there’s no specific minimum dollar amount that qualifies an item for a floater policy, any item of high market value that may not be adequately covered by your home insurance policy can be a suitable candidate for one. Here are some common examples:
- Jewelry and watches
- Electronics (Sound systems, video game consoles)
- Fine art (Paintings, drawings, sculptures)
- Antiques
- Camera equipment
- Musical instruments (Pianos, guitars, violins)
- Sports equipment (Skis, bicycles, golf clubs)
- Rare books and comics
- Wine collections
- Entertainment, historical, and sports memorabilia
- Firearms
- Precious gems and stones
- Model trains
- Coin or stamp collections
Keep in mind that when adding a floater, your insurer will typically request a receipt or appraisal upfront. If you ever need to file a claim, you’ll be asked to provide those documents again to the claims adjuster, along with a detailed description, proof of ownership, and any relevant documentation of the loss or damage.
Quiz: Is Floater Insurance Right For You?
A floater insurance policy isn’t necessarily for everyone – it really depends on what you own, how valuable those items are, and whether your existing insurance policy provides enough coverage. To help you determine if additional protection in the form of a floater is needed, ask yourself the following questions or take the interactive floater insurance quiz. Either will help you assess if the valuable items you own are worth insuring beyond the limits of your current policy.
- Do you own any items that exceed your home insurance policy’s coverage limits?
- What item(s) exceed your home insurance policy’s coverage limits?
- Would these items be hard or expensive to replace?
- Have you had these items professionally appraised in the last 5 years?
- How frequently do you take these items outside your home?
- Have you ever lost or damaged a valuable item in the past?
How Does Floater Insurance Work
Every home insurance policy comes with coverage limits, which means you’ll only be compensated for damages up to the maximum amount specified in your policy documents. Unfortunately, these limits may not be enough if your high-value items like electronics, jewelry, or artwork, get damaged, lost, or stolen.
The way it works with floater insurance is that you can insure individual high-value items for their appraised or replacement value by adding a floater to your home, condo, or tenant insurance policy. This ensures that if the item is damaged, lost, or stolen, you can file a claim for its full insured value.
For example, let’s say your home was broken into, and your home insurance covers your valuables up to $8,000. However, among the stolen items is your heirloom engagement ring, valued at $10,000. In addition to the ring, some necklaces and watches were also taken. Your home insurance policy will only cover up to $8,000 for all of those valuables combined, leaving you under-compensated for your loss. On the other hand, if you had a floater policy specifically for your ring, you’d be reimbursed for the value you insured it at.
Floater vs. Endorsement: What’s the Difference?
There are many ways to customize your insurance policy, including with floaters and endorsements. If you don’t know the difference between them though, you might not get the coverage you need or expect. To avoid that and help you make an informed decision, here’s a simple breakdown of the differences between a floater and an endorsement in insurance.
Floater
- Definition: A floater covers one particular item for its entire appraised or replacement value. You can cover multiple items by adding multiple floaters to your policy.
- Purpose: Offers extra, bespoke protection for items that may exceed the coverage limits of a standard home insurance policy.
- Example: Engagement rings often necessitate an increased coverage limit in the form of a floater.
Endorsement
- Definition: Endorsements, also referred to as riders, are modifications to an existing insurance policy that change the terms of coverage. They are used to add, remove, or alter coverage.
- Purpose: Allows you to customize your policy without the need to purchase an entirely new policy.
- Example: Individuals with a home-based business might obtain an endorsement to ensure their equipment and inventory are fully covered.
Next Steps: How To Buy Floater Insurance
If you own a valuable item, a floater policy can fill any gaps in your insurance coverage. Curious about how much home, tenant, or condo insurance costs with a floater policy? With the YouSet platform, it’s simple! Just tell us about yourself, your home, and the belongings in question, and our algorithms will compare insurers and find exclusive discounts to ensure you’re getting the most coverage at the best possible price.