What is Installment Sales Floaters?
Installment sales floaters are a type of inland marine insurance designed to protect sellers who finance the sale of high-value personal property. These floaters cover the seller's financial interest in the property until the buyer completes all installment payments. If the property is damaged, lost, or stolen before the buyer finishes paying, the policy helps protect the seller from financial loss.
Who Needs It
This coverage is most often used by businesses or individuals who sell goods on an installment basis. Examples include:
- Retailers offering financing for electronics, appliances, or furniture
- Dealers selling vehicles, boats, or machinery
- Private sellers who allow buyers to pay over time
If you sell valuable items and retain a financial interest until the buyer pays in full, this coverage may be important for your risk management strategy.
What It Typically Covers
An installment sales floater usually covers the seller’s interest in the property against:
- Fire and theft
- Accidental loss or damage
- Transportation risks (in some cases)
Coverage generally applies while the buyer is making payments and the title has not yet fully transferred.
Common Exclusions and Limitations
Like most insurance policies, installment sales floaters have exclusions. Common ones include:
- Wear and tear or gradual deterioration
- Losses due to improper use or lack of maintenance
- Intentional damage by the buyer
- Losses occurring after the title has transferred
Policy terms vary, so it’s important to review coverage details with your provider.
Factors That Influence Cost
Several factors can affect the cost of an installment sales floater:
- Type and value of the goods sold
- Number of sales transactions covered
- Buyers' creditworthiness
- Risk associated with transport or storage
- Coverage limits and deductibles
Each policy is tailored to the seller’s specific situation and risk exposure.
Proof of Insurance and Compliance
While not always legally required, having this insurance can demonstrate financial responsibility and protect your business interests. Some lenders or financial institutions may require proof of coverage. Requirements can vary by state and type of goods sold.
How to Get a Quote
To get a personalized quote for installment sales floater insurance, visit our quote page and provide details about your sales and the items you finance.
Frequently Asked Questions
Is an installment sales floater the same as a warranty?
No. A warranty covers product defects or performance, while an installment sales floater insures the seller's financial interest in the property until payment is complete.
Does the buyer need to carry insurance too?
In many cases, yes. Sellers often require buyers to have insurance on the item as part of the installment agreement, especially for high-value goods.
When does coverage under an installment sales floater end?
Coverage typically ends when the buyer completes payment and the title fully transfers to them.
Can I get coverage for multiple installment sales under one policy?
Yes. Many policies can be structured to cover multiple transactions, depending on the insurer and your business needs.
What types of property are eligible for this coverage?
Eligible items often include vehicles, electronics, appliances, boats, and other high-value personal property sold on an installment basis.
Still have questions? Talk to a local insurance expert.