WHAT IS PERSONAL PROPERTY INSURANCE/ INLAND MARINE
INSURANCE?
T CHARACTERISTICS OF INLAND MARINE INSURANCE
T POLICY PROVISIONS



WHAT IS PERSONAL PROPERTY INSURANCE/ INLAND MARINE INSURANCE?

This is intended to cover personal property / items that are transported from one place
to another using various modes of transportation (except over ocean). By adding
various floater policies, personal effects can be insured. Homeowner’s insurance is
limited in that it contains various limitations of coverage - the Inland Marine insurance
provides broader areas of coverage.

CHARACTERISTICS OF INLAND MARINE INSURANCE/ INLAND MARINE
INSURANCE

Specific coverage

Inland Marine Insurance provides a choice of various classes of personal property such
as Jewelry, Cameras etc. The insured is allowed the flexibility of having coverage
written for separate items falling within the broader categories.
Policy Limits
A floater policy is unencumbered by limitations as to the extent of coverage on certain
types of valuable property, as is the case with a basic homeowner’s policy. The
combined effect of a homeowner’s policy with these inland marine floaters will provide a
much larger coverage for property that is valuable and fetches a lower limit under the
homeowner’s policy.
Geographical Coverage.
Coverage is available worldwide in all classes of property, except Fine Arts.

POLICY PROVISIONS

The applicable policy terms are as follows:
Loss Value
The amounts that will be compensated by the insurance company are limited to one of
the following:
􀂃 The current value of the property at the time of loss
􀂃 The replacement cost of the property
􀂃 The reasonable cost of repair of the property
􀂃 The amount specified in the policy
Loss to a Pair
If a loss occurs to a pair, the insurance company will not treat it as a loss to the entire
set. It will either replace or repair a part of the set, or it will pay the difference in value of
the set before and after the loss.
Lost Item Settlement
If there is a total loss to the insured item, the insurance company will not reduce the
amount of insurance provided and will either refund the unearned premium, or allow the
unearned premium to be adjusted against the current premium due, in case the item is
replaced.


POLICY PROVISIONS CON’T
 INSURANCE EXCLUSIONS
 SCHEDULED PERSONAL PROPERTY FLOATER
 PERSONAL EFFECTS FLOATER (PEF)


 SUMMARY

Claims against others
In case a loss is caused by a third party, the insurer will try to recover the amount from
this third party. In the meantime, the insured will be paid by an extension of loan by the
insurer to be settled once the recovery from the third party is made. If the recovery
efforts are unsuccessful, then the loan amount will be adjusted against the loss
settlement.
Insurance not to benefit others
This clause is put in place so that no third person may evade paying for damage caused
by them on the pretext that the property is insured. This third person, for example, may
be someone who has custody of the property.
Insurance Exclusions
In addition to the general exclusions of War, Nuclear Reactions and Radiation, the
following are some of the exclusions that apply for physical loss to covered property:
􀂃 Insect infestation
􀂃 Inherent Vice
􀂃 Wear and tear
􀂃 Gradual deterioration
Important Point
The Personal Articles floater is designed to provide coverage to nine classes of
personal property including:
• Jewelry
• Furs
• Stamp and Coin collections
• Cameras
• Golfing equipment
• Fine Arts (Rare books, paintings, antique furniture etc)

SCHEDULED PERSONAL PROPERTY FLOATER

A scheduled personal property floater is used to insure categories other than the nine
classes covered under the Personal articles floater. These additional items may be
Typewriters, wheelchairs etc. In effect, any kind of personal property can be insured
under this floater, and coverage can be adapted to meet individual needs. Newly
acquired property will be subject to a loss coverage of the lower of either 10% of the
total amount of Insurance or $2,500.

Important Points

• A personal property floater may be used for unscheduled property such as
Silverware, Clothing, Rugs, Appliances and Musical Instruments etc. (there are
13 categories).
• In terms of policy limits, the total amount of insurance in each of the categories is
the maximum coverage provided in case of each loss in that category.
• Similarly, the total amount of coverage of the 13 categories is the maximum
coverage limit of the policy.

PERSONAL EFFECTS FLOATER (PEF)

• Designed for travelers who want to insure their personal effects while traveling.
• The PEF is applicable only when the property has left the residence of the insured.
• This coverage on this floater includes:
􀂃 The insured
􀂃 His or her spouse
􀂃 Children who are unmarried and living with the insured
• Coverage includes:
􀂃 Luggage
􀂃 Clothes
􀂃 Sporting equipment and items counted as personal effects
• Those which are excluded from the PEF are:
􀂃 Property such as cars, motorcycles, bicycles
􀂃 Currency
􀂃 Property that is placed in storage or is in the possession of children while
in school

SUMMARY

This lesson covered Inland Marine Insurance. We discussed different features of inland
marine insurance and also looked at the different policy provisions for this type of
insurance. At the end, we looked at the two personal property floaters related to inland
marine insurance.