Property and Casualty Insurance Practice Exam

Which type of insurance uses the term "floater policy" due to its coverage of property in various locations?

1. Health insurance

2. Earthquake insurance

3. Inland Marine Insurance

4. Commercial property insurance

The correct answer is: Inland Marine Insurance

A "floater policy" refers to a specific type of insurance primarily associated with Inland Marine Insurance. This type of insurance is designed to cover personal property that is not fixed in one location and is often moved around or transported. It provides flexibility, allowing coverage for items that may be located in different places at different times, such as jewelry, artwork, or business equipment that travels to various job sites. The term "floater" embodies this mobility and the ability to secure coverage for items as they are displaced, whether they're on the move across states or simply stored in various locations. This characteristic is crucial as it distinguishes Inland Marine Insurance from other insurance types that typically provide coverage for property fixed in one location, leading to its unique terminology within the insurance industry. Therefore, recognizing "floater policy" as synonymous with Inland Marine Insurance highlights its purpose and functionality in safeguarding property that requires coverage in multiple locations.