DEFINITION of 'Jewelry Floater'

An optional addition to a homeowner's insurance policy that protects against financial loss from the damage or theft of valuable jewelry. A jewelry floater provides a higher dollar amount of coverage for jewelry than a basic homeowner’s insurance policy does. Some jewelry floaters also provide coverage against more perils than homeowners insurance does—they might cover accidental loss, for example, while a basic homeowners policy would not.

BREAKING DOWN 'Jewelry Floater'

Since not everyone owns expensive jewelry that they want to insure, a basic homeowners policy provides limited coverage for jewelry so that homeowners aren’t paying for coverage they don’t need. A basic policy might provide $1,000 or $1,500 in jewelry coverage, so a homeowner who has just purchased a $5,000 engagement ring might contact his insurance agent about buying a jewelry floater so the ring’s full value is protected. Depending on how much the premium for the jewelry floater is, he might decide to self-insure, meaning that he’ll plan to pay for a new ring out of pocket if the existing one is stolen during a burglary, falls off in the ocean during the couple’s honeymoon or is otherwise damaged.

If you own jewelry that’s valuable enough to merit purchasing a jewelry floater, you’ll want to have proof of the items value in case you ever need to file a claim, and you’ll probably need proof just to purchase the floater. A good form of proof is a professional appraisal showing how much the item is worth. The insurance company needs a valid way to determine how much it should pay in the event you file a claim. They won’t just take your word for it that your stolen diamond was worth $20,000.

It’s also possible to purchase floaters for other high-value possessions, such as baseball card collections, antique silverware sets, fine art paintings, computers and fur coats. And renter’s insurance insures personal possessions such as jewelry, too; you don’t need to be a homeowner to insure these items. You can also purchase a jewelry floater for a renter’s insurance policy.

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