how jewelry floaters work
a jewelry floater is an optional addition to a homeowners insurance policy that protects against financial loss from the damage or theft of valuable jewelry although basic homeowners policies typically provide some jewelry coverage individuals with sizable or valuable jewelry collections often opt to purchase a jewelry floater in addition to their basic policy if the jewelry does get damaged stolen or lost the jewelry floater can provide a higher dollar amount of coverage than would be possible under the basic home insurance plan aside from jewelry floaters are also often purchased for other types of valuable assets these are often called personal articles floaters pafs examples include fine art high end watches or even collectibles such as baseball cards 1 in some cases investors may even specifically purchase these assets as a type of alternative asset in their portfolios for these investors as well as wealthier individuals in general purchasing floaters might be a worthwhile expense to ensure peace of mind in addition to purchasing jewelry floaters policyholders will often also obtain formal appraisals of their jewelry s worth an appraisal helps the insured prove the value of their items in the event that they need to file a claim reducing the risk of any potential disputes with their insurer in fact many insurers will require that a professional appraisal be performed as part of their due diligence on the jewelry floater policy after all from the insurance company s perspective it is important to understand the value of the item so that it can set its insurance premiums at an appropriate level example of a jewelry floatertaylor is a collector of high end jewelry under their rental insurance policy taylor is entitled to a certain amount of coverage for all their personal possessions however taylor realizes that if the collection were to be stolen or destroyed they might quickly exceed the maximum coverage level under their renters insurance policy moreover because the jewelry in the collection is valuable and rare taylor worries that the insurance company might not understand its replacement value if they were to file a claim for this reason taylor decides to take out a jewelry floater in doing so taylor obtains a professional appraisal of their jewelry and incorporates this appraisal into their new insurance policy that way if taylor were to make a claim they have clarity that the insurance company understands and accepts the actual replacement value of their insured jewelry moreover taylor is careful to set the insurance policy so that its maximum coverage level would fully capture the value of their collection 