If you were fortunate enough to get an expensive gift during the recent holidays, congratulations! If that gift has real value it should be protected. Now you should determine if the item is already covered by your homeowners, renters, or condo insurance. It could mean the difference of thousands, or even millions, of dollars.
If you have a fire, a flood, theft or other event that is covered by your insurance, then your possessions are protected for as much as your policy allows; but that is the tricky part. This typically means that there is a limit on the amount you’ll get for certain property, so you may need to get an endorsement to get more coverage. With that endorsement you’ll get coverage that goes that extra mile to protect what matters most to you. You’ll also want to check to see if there is a deductible that applies.
Another thing to consider is whether your insurance covers the replacement cost or the actual cash value of your property. Actual cash value refers to the estimate of what the fair market value of the item was at the time of its loss. Replacement cost is the estimate of what it will cost to repair or replace the item.
Did you get jewelry for the Holidays? If so, then you might already have some coverage under your existing policy, but that coverage may be limited.
Katherine Smith, Director of Personal Lines at William A. Smith & Son Insurance company in Poughkeepsie cautions to the benefits of scheduling an item to the policy before anything happens. She shared a recent story. Smith said, “A client received a Rolex watch for Christmas, valued at $10,000. He called in January to say that the watch was misplaced. His insurance company did cover the claim, but he only had coverage of $2,500 His deductible was $1,000 leaving him with only $1,500. The watch was valued at $10,000 which translated to an $8,500 personal loss.”
Conversely, had he attached the item to his policy when he received the watch, it would have cost roughly $100 dollars, but in this scenario he would have been reimbursed for the full value of the watch.
If you’ve already been proactive by creating a home inventory make sure you update it to include your new gifts. If anything ever happens, you’ll be thankful you’ve included that new big screen TV, expensive purse, exciting gaming system or whatever big gift you were given during the holidays.