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The Background

A standard home insurance package includes contents insurance that covers your personal belongings. However, it won't cover these belongings at their full value. In most cases, sub-limits apply that leave you exposed to serious financial loss.

For example, you may find yourself with a hundred thousand dollars worth of jewelry, whereas your jewelry coverage limit is only $2,500. In such a case, you need a floater and additional coverage purchase to protect your items for their full value. Here are a few things you should know when buying floater coverage:

Amount and Type of Limits

Before buying floater coverage, you need to know the maximum it will pay in case of damage or loss of the insured property. That way, you can buy relevant coverage and enjoy value for your money. For example, there is no need buying a firearm coverage floater worth $10,000 if you have firearms worth four times that much.

Although floaters typically cover single items, it's also possible to find a floater that covers a group of items. In such a case, you need to know whether the coverage limit applies to each item in the group or for the collective items in the group.

Coverage Location

Most insurance companies offer floater coverage that will apply even if you take the covered items out of the home. This makes sense because many of the items covered by floaters, such as firearms, jewelry, and sporting equipment, are portable. However, you need to know how far you will be allowed to travel with the items while still maintaining coverage. Does the coverage only apply within the state or country, or does it apply worldwide? Those are the questions you need to be answered before coverage purchase.

Loss Value

You don't want to be arguing with your insurance carrier about the value of your jewelry after the piece is lost in a burglary incidence. Therefore, you need to agree with your insurance company on the value of your insured items before buying coverage for them. This usually takes the form of a valuation or appraisal of the properties, especially for non-standard properties or properties that have appreciated since you acquired them. That way you know exactly how much your insurer is prepared to pay for the loss of each item.

Deductible

Lastly, floater coverage tends to come with deductibles, so you also need to determine how much deductible to carry. Here you need to consider the size of your emergency fund, the value of the items, the risk of loss or damage, and the repair cost in case of loss.

For more information, talk to companies like Accurate Insurance Services.