Hawaii Insurance Adjuster License Practice Exam

In terms of coverage, what is the significance of floaters in insurance?

1. They provide fixed-location coverage only

2. They are used for high-value items

3. They limit coverage to one location

4. They are unnecessary for most clients

The correct answer is: They are used for high-value items

Floaters in insurance are specialized policies designed to cover high-value items that may not be fully insured under a standard homeowners or renters policy. These items could include jewelry, artwork, collectibles, or expensive electronics. Floaters provide broader coverage for these valuables, often including protection against risks that may not be covered under standard policies, such as accidental loss or mysterious disappearance. The significance of floaters lies in their ability to offer coverage that adjusts to the needs and value of the specific item, rather than being constrained by the general limits of a standard policy. This tailored approach is particularly beneficial for individuals who own high-value items and wish to ensure they have adequate protection against various risks. While fixed-location coverage, single-location limits, and the notion that floaters might be unnecessary can be relevant in certain discussions about insurance, they do not accurately encapsulate the primary role and importance of floaters, which is to provide enhanced and comprehensive coverage for high-value possessions.