There are lots of confusing details regarding your home insurance policy. What’s included? What’s not included? How do I know the difference? What if I never asked the agent about whether my specific situation is covered by the policy I was told to buy?
This article is about some of the things that aren’t covered in standard insurance policies and how you can still get coverage for them. Specifically, we are going to address things you own that may be excluded from your policy.
Save Me Time!
- Do you have nice stuff? Insurance may not fully cover it. You may need a personal floater policy instead.
- Floaters let you insure specific items for specific amounts.
- Common items that require a floater are jewelry, art, and collectibles.
The Rest of the Story
Insurers like to exclude stuff from your policy or limit coverage if they do cover it. They don’t make it easy to know what these things are unless you want to read your policy. The good news is we can help you and it is faster and easier to read it here.
So let’s cover some of the things insurers tend to have restrictions on under the contents section of your policy. These restrictions will tend to limit the circumstance of when they’re covered or the size of a claim they will pay.
| Jewelry | Art | Antiques |
| Collectibles | Cameras | Golf Clubs |
| Musical Instruments | Guns | Bicycles |
As mentioned, some of these are covered in your basic contents coverage but the amount is generally too small, often maxing out between $500 to $2,500.
Enter The Floater
If you have items that the traditional contents policy won’t fully cover, your best option is to add a policy called a personal articles floater, or a “floater” for short. This will cover these items individually rather than under your broader contents coverage.
To make this concept more clear, your basic policy may have $100,000 of contents coverage. That coverage applies to any possession that fits the policy definition. You don’t have to specify ahead of time which items are covered or for how much.
For items that require a floater, you must specify each possession you want covered. You must also designate the value of that item when you add it to the policy.
For example, if you have a diamond bracelet that is worth $10,000, you must tell the insurer that you want to cover that specific bracelet for that specific amount.
So while general contents coverage is open ended in that it covers most things in your home (even if you don’t provide an inventory), it can be restrictive in how much it pays if you have a loss or not allow for certain types of content.
Alternatively, personal floaters are restrictive in that you have to specify what they cover and how much they’re worth, but are more flexible in the amount of coverage you can buy for each covered item.
How A Floater Works
In addition to having to itemize what possessions you want covered, there are two other main drawbacks with floaters.
First, you will need to document the value of the item. This can be in the form of a receipt (if you bought it recently) or an appraisal. Obviously, the downside of an appraisal is it adds an extra cost.
The second challenge is that you need to keep it current. If you buy more jewelry, you have to let the insurer know (within a certain period of time) that you want to add it to your policy.
The good news with a floater is items insured are covered for practically any cause of loss and you know exactly how much the insurance company will pay you. Also, there is no deductible if you do have a claim.
Why Do Some Items Need A Floater But Others Don’t?
Because insurance companies are arbitrary. No, really, that’s it.
Why do cameras and video equipment require a floater but cell phones (with fancy cameras inside) don’t? Because once upon a time, some insurance underwriter decided cameras needed to be on a floater and nobody since then has bothered to change it.
Why does jewelry require a floater but designer handbags or luggage don’t? Probably because nobody at the insurance company thought of it.
Jewelry requires separate coverage because it is valuable and easily stolen. That makes sense. But isn’t it just as easy to lose your luxury purse?
Just remember, in your excitement that your basic contents policy covers your designer goods, don’t forget that if they are covered on an ACV basis, you won’t get enough cash to buy a new one!
More Effort For More Protection
Of course, you don’t have to get a floater just because you have nice things. You can choose to self insure them if you prefer. However, floater policies are pretty cheap relative to the cost of your goods (about 1%).
There is some extra work involved in scheduling your items, getting appraisals, and trying to remember when you buy something new if it needs to be added to the policy.
However, many of the items you’d put on a floater have sentimental value on top of their financial value. It avoids a lot of heartache if you lose or break a precious possession and have to add financial loss to the emotional loss. A floater policy tends to be money well spent.
