Hawaii Insurance Adjuster License Practice Exam

What is the purpose of an installation floater?

1. To insure finished structures

2. To cover property intended to become a part of a structure

3. To protect tools and equipment from theft

4. To provide liability coverage on construction sites

The correct answer is: To cover property intended to become a part of a structure

An installation floater serves the specific purpose of providing insurance coverage for property that is intended to be installed as part of a completed structure. This type of coverage is essential for contractors or tradespeople who are working with items such as equipment, materials, or machinery that are not yet part of the finished product but will be when the construction or installation is complete. This insurance protects these items from various risks, such as theft, damage, or loss, while they are in transit to the job site or while they are on the job site before installation occurs. The unique aspect of an installation floater is that it tailors coverage specifically for items that will become part of the building once construction is finalized, ensuring that the materials are safeguarded throughout the installation phase. Other options serve different purposes. For instance, insuring finished structures pertains to the overall building once construction is completed, which falls under standard property insurance rather than an installation floater. Covering tools and equipment from theft relates to mobile equipment insurance, and providing liability coverage on construction sites is associated with general liability insurance, which protects against injuries or damages that may occur on site but is not related to protecting the items intended for installation.