It’s that time of year when your special someone may given or received a very special gift. Perhaps you’re giving a special anniversary or birthday gift, or something to celebrate a significant milestone. Maybe it’s an expensive watch, a piece of heirloom jewelry, or a valuable piece of art. These are all wonderful gifts that will have a great deal of sentimental value and significance for the recipient. But they also have real value and, as such, they should be properly insured.
Insuring and protecting expensive gifts may not be top of mind, but it’s definitely something to consider. “Oh,” you say, “I don’t need to do that. My homeowner’s or renter’s insurance will cover any damage or loss. Right?” Well, maybe yes and maybe no.
Protecting Expensive Gifts
The reality is, if your item is lost, due to theft, fire or some other “mysterious disappearance,” your homeowner’s policy may only partially cover the cost of replacing the item. (See our post about keeping your home safe while you’re away!) A typical homeowner’s policy limits coverage of luxury items to between $1,000 and $2,000. If you paid five, six, even ten thousand dollars or more for your gift, you would suffer a considerable loss if it were stolen or lost.
Replacement vs. Cash Value
The other thing to consider is if your current policy covers replacement or actual cash value. If the answer is cash value, then your insurance will cover the cost of the item, minus depreciation. If you bought a Rolex, which will increase in value, you should contact your insurance representative to obtain a rider to your policy that will take care of you as the item 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.
To add a rider or floater to your policy, you will first need to have the item appraised. 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 nominal fee. The appraisal document, along with the receipt for the item, should be kept with your insurance policy in a safe place.
Security & Prevention
And, speaking of safe places, if your gift is of exceptionally high value, it is best to keep it 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 may need to consider when buying and delivering expensive gifts. Do you know if your homeowner’s policy has “off-premises” coverage? That is, will your insurance cover your item if it is stolen from your car, or if it is stolen while you are on a vacation? This is something you may want to consider before you bring your gift home from the store.
Before you make a big investment, get your questions answered by one of our knowledgable team members. Call O’Brien Insurance in Glens Falls at 518-793-5173, where can help give you information and peace of mind. Or, simply request your free quote online.
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