GENERAL CHARACTERISTICS
There are 4 general characteristics that are present in Inland Marine Floater Policies. They are:
1. Coverage can be personalized to any specific type of property. The Personal Articles Floater (discussed later) provides coverage for 9 optional classes of personal property. The insured can select coverage for the class or classes of property needed to be covered. The flexibility is evident when the insured is able to cover jewelry and a valuable camera with Floaters.
2. The insured can select the desired policy limits. Since Homeowners Policies have limitations on coverage of certain types of valuable Personal Property, Inland Marine Floater Policies are quite popular. The advantage of the insured selecting his/her own policy limits is that the insured is given the flexibility of estimating their own value, thus providing adequate protection.
3. Floaters provide extensive coverage with respect to the perils covered. As noted earlier, Floaters are written on an AAll‑ Risks@ basis. The Floater will cover all Direct Physical Loss to the covered property.
4. Most Floaters cover the property anywhere in the world. A point to remember, fine arts are generally covered only in the United States and Canada.
FLOATER POLICY PROVISIONS
There are 9 general provisions in floaters:
1. Insuring Agreement
2. General Conditions
3. Loss Settlement
4. Loss to a Pair, Set or Parts
5. Loss Clause
6. Claim Against Others
7. Insurance Not to Benefit Others
8. Other Insurance
9. General Provisions
Insuring Agreement ‑ Most floater policies insure the covered property on an AAll‑Risks@ Basis. All Direct Physical Losses are covered except these exclusions:
1. wear and tear, deterioration or inherent use
2. insects or vermin
3. mechanical or electrical breakdown or failure
4. repairing, adjusting, servicing or maintaining the property
General Conditions ‑ Numerous conditions appear in an Inland Marine Floater covering Personal Property. We have listed them separately due to their importance in the Personal Floater Policy.
Loss Settlement ‑ The amount paid for a covered loss is the lowest of the following 4 amounts:
1. the Actual Cash Value at the time of loss.
2. the amount for which the insured could reasonably be expected to have the property repaired to its condition immediately prior to the loss.
3. the amount for which the insured could reasonably be expected to replace the property with identical property of that lost or damaged. Much of the property insured in a Floater Policy can be purchased by the insurer at a discounted price. The insurer may offer to replace the lost or damaged property rather than make a cash settlement. If the replacement offer is rejected by the insured, the insurer and cash settlement is limited to the amount for which the insured could reasonably be expected to replace the item. This amount is the insurer-discounted price for which the insured can reasonably expect to replace the item for.
4. Loss to a pair, set or parts. When the loss of, or damage to, an item is a pair or set, the amount paid is not based on a total loss. Instead, the insurer has the option to repair or replace any part, to restore the pair or set to its original value, the amount of insurance stated in the policy.
Before the loss, the insured could also pay the difference between the Actual Cash Value of the property before and after the loss.
Loss Clause ‑ Under this particular provision, the amount of insurance is not reduced except for the total loss of a Scheduled Article. If the insurance is reduced because of the total loss of a Scheduled Article, the unearned premium is refunded, or the insured can apply it to the premium due if the Scheduled Article is replaced.
Claims Against Others ‑ This provision states that if a loss occurs and the insurer believes they can recover the loss payment from the person or parties responsible, the Loss Payment to the insured is considered a loan to be repaid out of any recovery from others. Of course, the insured is expected to cooperate with the company in its attempt to recover from those responsible for the loss. If the recovery attempt is unsuccessful, the insured is not required to repay the Loss Settlement Aloan@.
Insurance Not To Benefit Others ‑ This provision states that no other person or organization that has custody of the property and is paid for services can benefit from the insurance on the property. This provision prevents a third party who caused the loss from denying liability for payment because the property is insured.
Special Exclusions ‑ The general exclusions of War and Nuclear Reaction or Radiation appear in all Floater Policies. In addition to the General Exclusions, there are special exclusions that apply to the specific type of insured property. These Special Exclusions will be discussed when the different Floater Policies are covered.
CHAPTER 2 ‑ QUESTIONS
1. A general characteristic present in the Inland Marine Floater Policies would be:
a. coverage can be personalized
b. insured can select the desired policy limits
c. floaters cover the property anywhere in the world
d. all of the above
2. All of the following are Floater Policy Provisions except:
a. Amendments
b. General Conditions
c. Loss Settlement
d. Insuring Agreement
3. The Insuring Agreement in most Floater Marine Policies insures the covered property on:
a. Named Peril Basis
b. AAll‑Risk@ Basis
c. Excludable Perils Basis
d. all of the above
4. What provisions will make the Floater Policy excess coverage?
a. Loss Settlement
b. General Exclusions
c. Other Insurance
d. none of the above
5. What exclusions appear in all Floater Policies?
a. nuclear reaction
b. radiation
c. both a & b
d. neither a or b
answers
1. d
2. a
3. b
4. c
5. c