Don't Let Expensive Gifts Go Uninsured
I'm sure you're thrilled if Santa left you that set of high-end golf clubs, diamond ring or piece of artwork you wanted under the Christmas tree. Now you need to make sure that expensive item is protected by properly insuring it.
Your standard homeowners or renters policy should cover personal possessions, but it might limit the amount of coverage on items such as jewelry, furs and collectibles to $1,000 to $2,000, according to the Insurance Information Institute. In that case, you'll need a "floater" policy, which provides additional coverage and protection for "mysterious disappearance" (i.e. loss) of such items. Floaters even provide protection for musical instruments and sports equipment.
The Insurance Information Institute recommends you take these steps to protect any exceptionally expensive gifts you might have received for the holidays:
-- Alert your insurer to find out whether you need additional coverage to protect your new items.
-- Ask if you have a replacement cost or actual cash value policy. A replacement cost policy pays to replace items at their current market value, while an actual cash value policy pays to replace items at their value minus depreciation. For this reason, replacement cost coverage is about 10% more than actual cash value, but the Insurance Information Institute says that it's a better value in the long run.
-- Send a copy of the receipt for your item to your insurance company so it knows the current value. Keep your receipt in your home inventory file.
-- Have the item appraised if you don't have a receipt or if it's an antique. Ask your insurer to recommend a reputable appraiser. The premium for your floater will be based on the appraised value and you'll be compensated for this amount if something happens to your item.
-- Photograph or video the item and add it to your home inventory. If something happens to the items, a visual record will help document the loss and speed up the claims process. Add the photo or video to your home inventory. If you don't have a home inventory, start putting one together now. The Insurance Information Institute’s free Know Your Stuff software can help you create a home inventory.