So, you’ve been surprised with the perfect Valentine’s Day Gift. Whether it’s the perfect piece of jewelry, artwork, or a brand new gadget, after you’ve thanked your admirer, make sure you protect your gift with the right insurance coverage.
The Full Value of the Item May Not Be Covered
While homeowners & renters insurance polices do cover your personal items, there are limits on certain types of high-value items, such as jewelry, watches, furs and artwork. Caps on coverage amounts typically apply to certain categories of possessions (say, all the jewelry in the house is covered up to $2,500 combined, unless otherwise scheduled with your insurance carrier).
Sentimental Value is Not Insurable
Gifts from that special person in your life may be priceless to you, but insurers may not share your sentiment. Valuables can only be appraised for their actual or appraised value, not its sentimental or perceived value.
Homeowners & Renters Insurance Doesn’t Cover Accidental Loss
The typical policy limits coverage depending on how the loss occurred. For example, homeowners & renters policies cover “named perils” such as theft, fire, lightning, and windstorm, but accidentally dropping your ring down the drain of the kitchen sink is not a named peril. To cover such circumstances, you’ll need a valuable articles personal property endorsement, or a floater, added to your homeowners policy.
The Benefits of Scheduling Valuables
Scheduled Personal Property is an optional add-on to your homeowners insurance policy that increases the limits on specific high-value items for more protection. To get the items scheduled, you typically need to provide your insurance company with a recent receipt or a professional appraisal. Scheduling your belongings can increase your premium, but it can come with additional benefits. Scheduled personal property may be covered for additional risks, including accidental loss (like dropping your wedding ring down the drain), which typically isn’t something covered by a standard homeowners policy.
Don’t Forget the Deducible
If you have added your gift to your policy, and it is damaged or lost due to a peril that’s covered by your policy, you’ll get a payout up to the cap, minus your deductible. That means if your $1,000 necklace is stolen, and your policy has a $300 deductible, your homeowners policy will payout $700 for your claim. This does not apply to any items that are endorsed or scheduled items.
Policies can vary from carrier to carrier, but typically endorsements don’t require deductibles. That means that if your Valentine’s Day gift mysteriously disappears, you won’t have any out-of-pocket costs to replace it, up to your coverage limit.
Keep a Copy of Your Item Receipts
Having a copy of the receipt of the item showing the value can be critical when it comes to submitting a claim & getting the right amount of coverage. While it may be difficult to obtain purchase receipts for gift items, just ask your admirer if you can get a gift copy. If you can’t get your hands on a copy of the receipt, get a quote of the cost from the store. If the item was purchased on sale, get a copy of the appraised value of the item. The same applies to heirloom and antique jewelry; the item will need to be appraised, and your insurance company can help recommend a reputable appraiser.
Snap Some Pictures
Take high-quality photos of the valuable item(s) you wish to insure and add it to your home inventory. Keep it in several safe places, such as a storage account in the cloud, on a flash drive, in a locked filing cabinet or in a bank safe deposit box. Photos of valuable items and collections, receipts or appraisal reports, and an up-to-date inventory of your personal possessions can help you purchase the correct amount of insurance and speed up the claims process in the event of a loss.
While you may never get over the loss of a precious gift, the more documentation you have, the easier it will be to make a successful and painless insurance claim.
Have a question about your coverage options? Get in touch below!
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