Valentine’s Day often includes buying your loved one a special, valuable gift. Traditionally, it is jewelry, but it might even be a piece of fine art or maybe even a vehicle (lucky them!).
However, one often overlooked consideration is whether your gift is covered under your existing insurance coverage. Here’s what you need to know and how to protect valuable Valentine’s Day gifts.
Policies Have Limits
Items such as jewelry, furs, fine art, antiques, collectibles, and other items typically have policy limits of between $1,000 and $2,000, and you must first pay your deductible.
This obviously doesn’t provide sufficient coverage if you bought your Valentine a $6,000 ring or a $10,000 Rolex watch.
Additional Coverage Available
Usually, it is a relatively simple process to add an endorsement to your policy to provide a higher limit, but it isn’t always the best choice.
A thorough understanding of your existing coverage is important. Can you rely on it for “off-premises” coverage if the gift is stolen from your car or when you’re on vacation?
Does your policy offer replacement cost or actual cash value coverage? Replacement cost compensates you the amount needed to replace items at their current market value.
Actual cash value compensates you for the item’s value, less depreciation. Often times, the higher cost of replacement cost coverage is worth it, but especially for expensive items that increase in value over time.
When You Need a Standalone Policy
Your agent may recommend a standalone insurance policy in certain cases.
For instance, you can’t insure a gift under your homeowners, condo or renters insurance if the person doesn’t live in the same household. Also, if you don’t have an existing policy, you’ll need a standalone policy.
Items used for work are usually excluded from standard policies too. This could include computer, music, photography or sporting equipment your Valentine uses for their job.
Fortunately, a standalone policy offers higher limits and broader coverage. Policies may include ‘mysterious disappearance’ and accidental loss.
Vehicles Need Separate Insurance
If you’re buying your loved one a new vehicle, you need insurance coverage to drive it off the lot. Once they receive it as a gift, they need their own coverage. If you share a policy with the gift recipient, it’s just a matter of adding the vehicle to your policy and transferring the title.
However, when a person doesn’t live with you they need to insure it independently. The best way to get over this hurdle is to spring the surprise on them at the dealership.
Discuss your coverage with a local, independent insurance agency like ours. We understand insurance clauses, exceptions, and exemptions and can help you fill insurance gaps. We’ll always recommend the best and most affordable solution to protect that special Valentine’s Day gift for your loved one.