High-value holiday gifts aren’t always covered under your homeowner’s or renter’s insurance policy. If you received precious jewelry, fine art, a new fur, an expensive watch or computer, or other costly items, you’ll want to discuss your coverage with your insurance agent.
Typical Policy Coverage
Your standard HO-3 homeowner’s insurance policy typically covers household items such as your furniture, TV, and other household goods against “named perils.” These usually include claims for theft, fire, vandalism, lightning damage, and smoke.
If you have an all-peril policy it provides broader coverage, but both standard and all-peril policies either exclude or limit coverage on many expensive items.
Limits for Valuable Items
Insurers often limit or exclude theft coverage for items such as furs, antiques, jewelry, fine art, musical equipment, sporting equipment, bicycles, computer software and hardware, gaming devices, precious metals, coins, cameras, firearms, Oriental rugs, collections, cash, and collectibles.
If your policy provides coverage, the theft limits are probably very low for these high-theft type items. Most policy limits top out at about $2,000, or less. It is important you review your coverage with your insurance agent to ensure you’re probably protected. Don’t assume you are. Your agent understands the clauses in your policy and can highlight problem areas.
The optimal way to protect expensive items is by scheduling them with a rider. It is an add-on to your existing homeowner’s insurance policy which provides additional protection, including risks such as accidental loss. For instance, if you lost your expensive engagement ring or even if just the diamond fell out, your policy could cover it and you would not have to pay a deductible when you file your claim.
Scheduling your expensive items can allow for inflation and value shifts, too. This is particularly important for collectibles and collections whose values often fluctuate according to the market.
You’ll need to get a professional appraisal done on these items if you do not have one. Most times a purchase receipt works for insurance purposes too, but some items may require an appraisal if you want to capture the higher value. Also the appraisal and receipt should be dated within the last 3 years or the insurance company may request updated documentation.
Insurance experts agree that it is very important you create and update a home inventory, including photos or videos of your belongings. No insurance policy can fully protect you if you do not have sufficient records documenting your belongings.
A home inventory not only helps you recall what you own if you experience a major loss, it also provides invaluable information required during the claims process. It can also assist you if you need to substantiate your loss with a government agency after a catastrophe.
Don’t risk paying out-of-pocket to replace your expensive holiday gifts. Talk to your local, independent insurance agent. They have the expertise you need and they can fine tune your policy fit your needs and your budget.