How Lavish Gifts Can Change Your Insurance Policy
Did You Receive Expensive Gifts Over the Holidays? Read This.
So your husband bought you a gorgeous diamond tennis bracelet. And this holiday season, you finally caved and bought him his 80 inch, curved 3D Smart TV he’s been begging you for all year long. Over Black Friday, you decided to upgrade your kitchen flooring and countertops. The sales were just too good to pass up.
But did you think about what happens if your precious jewels go missing? Or if someone breaks in and steals his prized television? What if there’s a fire in your kitchen? These things may or may not be covered in your current homeowner’s policy. This is why it’s so important to schedule an annual review with your insurance agent. A 30-minute chat can save you money, find holes in your insurance coverage, and eliminate any future unexpected expenses.
If you’ve received gifts that are valued over $2,500, give us a call today to make sure your policy is sufficient to cover any losses, damages, or thefts. Most insurance policies only cover luxury items between $1,000 to $2,000. If your gifts are over this amount, you could suffer a considerable loss.
Replacement vs. Cash Value
Another thing to think about is if your current policy covers replacement or actual cash value. If the answer is cash value, then your insurance policy will cover the cost of the item, minus depreciation. So let’s go back to the tennis bracelet. You should talk to your insurance agent to obtain a ‘rider’ to your policy that will take care of you as your bracelet appreciates in value.
In most instances, adding a “rider” or a “floater” to your insurance policy will ensure that your item will be covered for its actual value and not just the standard $1,000 to $2,000 limit mentioned earlier.
You must have the item appraised in order to add a rider or floater to your policy. Most jewelers will give you a written appraisal at the time of purchase. If, for some reason, you have not received one, you can go to an authorized appraiser and have the item appraised for a reasonable fee. The appraisal document, along with the receipt for the item, should be kept with your insurance policy in a safe place.
Security & Prevention
While we’re on the topic of safe places, if your gift is of exceptionally high value, keep your special item(s) in a secure location, such as a safety deposit box. This extra measure of security will enable you to purchase “in vault” coverage and will save you some money. When the item is going to be worn on special occasions, you can purchase a rider from your insurance representative for the period of time the item will be out of the vault or safety deposit box.
There are other scenarios you might need to consider when buying and delivering expensive gifts. Do you know if your homeowner’s policy has “off-premises” coverage? In other words, will your insurance cover your item if it is stolen from your car, or if it’s stolen while you are on a vacation?
Ready to schedule your annual insurance policy review? Give us a call!