When it comes to holiday giving it may be the thought that counts, but when it comes to insurance the bottom line is what’s covered for a potential loss.
Even keeping grinches from stealing the Christmas goodies doesn’t guarantee items will stay safe. They can be lost or destroyed by any number of disasters.
That’s why anyone giving or receiving a costly item should make sure it’s covered by their insurance provider, according to the Insurance Information Institute
“If you receive a sparkling engagement ring, a stunning piece of art or even took advantage of the end-of-year sales to treat yourself to a new set of golf clubs or fast new bike, it is important to contact your insurance professional to make sure the items are properly insured,” Jeanne M. Salvatore, senior vice president and consumer spokesperson for the I.I.I., said in a statement.
Generally speaking, personal possessions are covered under standard homeowners and renters insurance policies. However, there may be a limit on the amount covered for theft. Typically, items such as jewelry, furs, collectibles and precious stones are limited to $1,000 to $2,000.
To properly insure jewelry, owners might consider purchasing additional coverage through a floater. In most cases, a floater also provides coverage for ‘mysterious disappearance,’—for example, if a wedding ring falls off or is lost, it would be financially covered.
Floaters (also known as endorsements) are available as an addition to homeowners and renters insurance policies, carry no deductibles and frequently provide the option of having the insurance company replace the item for you.
Prices vary depending on the type of jewelry, the insurance company you choose, where you live and where the item will be kept. In addition to jewelry, floaters are also available for furs, fine art, musical instruments and even sports equipment.
Anyone who receives an expensive present and wants to make sure it is adequately protected, the I.I.I. suggests the following:
• Contact an insurance professional immediately. Let the insurance professional know about that new piece of jewelry, a fur or other expensive item. Find out how much coverage is provided under your current policy and whether additional insurance is needed.
• Find out if you have a replacement cost or actual cash value policy. An actual cash value policy pays to replace your possessions minus depreciation, while a replacement cost policy pays to replace your possessions at their current market value.
For example, if a fire destroys a 10-year-old TV a replacement cost policy will pay to replace the television with a new one. On the other hand, an actual cash value policy will pay only the depreciated amount of the TV. Some replacement cost policies also replace the item and deliver it to the owner.
Generally, the price of replacement cost coverage is about 10 percent more than that of actual cash value, but it is a better value in the long run. However, keep in mind that anyone with a National Flood Insurance Program policy for their belongings, it is only available on an actual cash value basis.
• Keep a copy of the store receipt. Forward a copy of the receipt to your insurer so that the company knows the current retail value of the item. Keep a copy for and include it with a home inventory.
• Have the item appraised. Heirlooms and antique jewelry will need to be appraised for their dollar value. Ask the insurer for recommendations regarding a reputable appraiser. It is important that expensive items be appraised properly—anyone who purchases a floater will pay a premium based on the appraised value and, in the event of a claim, be compensated for this dollar amount.
• Take a photo or video of the item. Get into the habit of keeping a visual record of all of your personal possessions. If using a video camera, you can also provide a verbal description of the item or collection. This helps to document the loss and speed up the claims process. It is also useful for documenting antique and unusual pieces of jewelry.
• Add the item to your home inventory. A home inventory can help in purchasing the correct amount of insurance and speed up the claims process when there is a loss. The I.I.I. has a free Web-based home inventory software, Know Your Stuff® – Home Inventory.
The software includes secure online storage so that can be accessed anywhere, anytime. Consumers can also download the Know Your Stuff app in the iTunes App Store (or search for “iii inventory”) or from Google Play.
Information about your belongings can be entered either through the mobile app or online and the data will automatically synchronize between the two. All of this information will be kept in your personal, password protected account, on Amazon secure servers. Like the online version, the Know Your Stuff® app is free.
