Topics covered:

Development of the personal property floater

Scope of coverage

Definitions

Property covered

Property not covered

Perils insured against and exclusions

Optional coverages

Deductibles; credits

Loss conditions

Other insurance

Other provisions

When to schedule

Development of the Personal Property Floater

The personal property form was developed in the early part of the twentieth century, when increasing use of the automobile created the need for insurance coverage away from an insured's home. The fire insurance policies in force at the time provided an extension of 10 percent of the contents limit for property away from the residence. However, the two primary perils faced by a traveler—theft and the perils of transportation—were not covered. In Marine Insurance: Ocean and Inland (Prentice Hall; Englewood Cliffs, New Jersey; 1970) the writer says that a traveler would need "five insurance policies to give himself reasonably complete protection under the old monoline insurance concept of insurance." The five policies would be: "fire and extended coverage policy, a residence theft and burglary policy, a water damage policy, an earthquake policy, and a personal effects policy." In addition, a sixth policy might be needed for valuable personal articles.

But with the advent of homeowners insurance (which can provide open perils coverage on contents under form ISO HO 00 05 or AAIS Form 5.), the personal property form was relegated to being used principally for apartment and condominium dwellers.

The form provides blanket protection on unscheduled personal property as a class. Specific items may be taken out of the blanket protection and scheduled, using the appropriate separate form. See Personal Articles Form for a discussion of the various classes of property that may be scheduled. Jewelry and furs are often treated in this way, though they can be allowed to remain unscheduled if the insured is content with the more limited coverage available on that basis. Scheduling is discussed later on in this article.

Forms and rules treated in these pages are those promulgated by Insurance Services Office (ISO). The American Association of Insurance Services (AAIS) has a personal property floater (IM-176) that differs in some respects from ISO's. Where significant differences between the two programs exist, they are noted.

Scope of Coverage

The ISO personal property form PM 00 19 is a simplified-language contract which is attached to and subject to the provisions of the common policy provisions form PM 00 01 12 02, the basic or skeleton form required for use in writing all personal inland marine coverages. (The common policy provisions are discussed elsewhere; see Personal Articles Form.

The personal property form may be used to insure the bulk of an insured's property—ordinary possessions—on an unscheduled basis. A separate amount of insurance applies to each of fourteen categories: silverware, goldware, and pewterware; clothing; rugs (including all floor coverings) and draperies; musical instruments and electronic equipment; objects of art; china and glassware; photographic equipment; guns and other sports equipment; major appliances; bedding and linens; furniture; all other personal property, plus professional books, instruments, and equipment while actually in the insured's residence; all other personal property including items as diverse as wine and garden tools and equipment; and building additions and alterations. This latter category is particularly important to a tenant or condominium unit owner. If the insured does not request insurance in a specific category, this must be indicated by entering "nil" or "none" where the amount would be entered. The ISO minimum coverage limit is $15,000 at the insured's principal residence; $10,000 is the minimum for property at another residence. AAIS sets no minimal limit; however, an individual insurer may impose a limit.

The amount of insurance indicated in the policy for each category represents the insured's aggregate limit of recovery for any one loss of property in that category. In older ISO forms for the personal property floater, all unscheduled property was written under a single amount of insurance; values were assigned to the separate categories of property insured, but only as estimates used in fixing the total amount of insurance. Theoretically, at least, the older policy's full amount of insurance could be applied even to a loss confined to one of the listed categories. Coverage under the present ISO form may be viewed as more restrictive in this respect. The AAIS personal property floater, like the older ISO contract, can provide a single amount of insurance, or the insured may elect to specify an amount of insurance for each class.

Any property insurable under a separate personal inland marine contract may be scheduled by means of the appropriate form (such as the fine arts form PM 00 17 12 02) attached to the PM 00 01 along with the personal property form. Scheduling is a particularly important option with respect to certain types of valuable property such as jewelry, furs, fine arts, etc. See When to Schedule later in this article.

Definitions

The current personal property form PM 00 19 contains definitions intended to be added to those in the PM 00 01 (you and your; we, us and our; and insured). They are your residence, which means "the residence stated in the declarations or in the policy"; and residence employee, which means "1. An employee of an 'insured', or an employee leased to an 'insured' by a labor leasing firm, under an agreement between an 'insured' and the labor leasing firm, whose duties are related to the maintenance or use of 'your residence premises', including household or domestic services; or 2. One who performs similar duties elsewhere not related to the business of an 'insured'. A 'residence employee' does not include a temporary employee who is furnished to an 'insured' to substitute for a permanent 'residence employee' on leave or to meet seasonal or short-term workload conditions." These definitions are identical to those in the ISO homeowners 2000 forms. For a discussion, see ISO Homeowners Definitions.

Property Covered