The holiday season is finally here, with lots of time to spend with family and friends while eating good food and exchanging gifts with everyone. However, despite all the holly and cheer, porch pirates and shipping conundrums tend to rear their heads during this time of year. Without insuring your holiday gifts, if anything is lost, stolen, or damaged, it could spell out financial losses. This is where insurance coverage can come in handy.
Why Should You Insure Holiday Gifts?
Many homeowners are under the assumption that the items they currently own or will receive are automatically accounted for in their homeowner's insurance policy. However, unless an item is strictly listed under your household inventory contents, it's most likely not covered. Depending on their size or monetary value, some items may not be covered under insurance based on coverage limits. Typically, items like jewelry, antiques, or other luxuries and collectibles aren't included.
Moreover, in recent years, trends in theft have risen, calling for coverage more than ever before. In the first year of the pandemic, the United States Postal Service (USPS) saw a 161% increase in mail theft complaints that continued to grow through 2021 and 2022. In 2023, it's predicted that losses will rise by 5% before the end of the year. The solution? Appropriate insurance protection.
What Gifts Should You Get Insured?
Any high-value gift or purchase could benefit from insurance coverage. If that item were to be lost, stolen, or damaged and the cost of replacement or repair costs you more than you're willing to pay, get insurance.
At the end of the day, you should consider two things when purchasing coverage for gifts: the type of item and the cost. Below are two types of coverage you will most likely encounter:
Property Protection
Depending on the item, it may be placed in a "capped" category. This means that they might be covered in your homeowner's policy up to a certain limit. This can include items like:
- Art
- Cameras and equipment
- Collections
- Firearms
- Furs
- Jewelry/watches
- Instruments
- Rare books
These items are sometimes also considered "special limitations" that affect the insured value of certain items like computer software, business equipment, large sums of money, and others. On the other hand, there are some expensive items that aren't typically capped, including furniture or stereo equipment – but this may not be included in deductibles.
Liability Protection
Depending on the designation of the gift, it may also have what is known as a "liability limit." Take, for example, an expensive drone; this would be included in your property protection but is also a liability and you may want to insure it as such. This can also include slides, trampolines, mini motorbikes, or anything else that can potentially injure a third party. Without this, you open yourself up to lawsuits, paying for repairs/hospital bills out of pocket, or potentially both.
How Do You Get Coverage for Holiday Gifts?
To reiterate, homeowner's coverage usually does not cover any items that are not listed on your home contents list. If your home policy does protect new gifts, limits are typically capped at such a low value they won't cover any portion of the value.
Jewelry is typically capped at around $1,500 – regardless of the amount the jewelry is worth. When considering coverage, also consider the true value of your items. There are four ways you can go about covering your gifts if they're worth more than your homeowner's capped limit.
1. Get A "Blanket Rider"
A "rider" is a way that you can broaden the coverage you have to encompass all of your gifts and possessions. Typically it is used as an add-on to your policy that provides extra "blanket" coverage for valuable items. This is especially useful if you are trying to insure multiple moderately priced items without raising premiums too much.
2. Schedule Your Gifts
A "scheduled" item is a rider on your homeowners or renters policy that is specifically for one (1) item. You typically go through a process of getting that gift appraised and then receiving coverage based on the appraised and set value. This is recommended if you have given or received a gift that is high-value and needs its own coverage, including jewelry or collectibles.
Some people choose to insure these items without a deductible, meaning that if anything goes wrong, they don't have to pay anything. However, this will typically increase the premium for this rider, but it can work in your interest if there were a claim.
3. Consider Standalone Coverage
If you don't have a homeowner's or renter's policy, you may consider purchasing a separate policy that insures a specific item. Sometimes, this can mean covering the item on another plan or opening a line of coverage for that item specifically.
4. Change Your Policy
Although it may result in more work and time in the long run, you may want to consider switching policies altogether. Start considering other policies that have higher limits of insurance, such as comprehensive plans, or one with a greater scope of coverage, like umbrella liability.
Quick tip: Have a discussion with your insurance agent about possibly waiving deductibles for certain items. Though this might increase premiums, you won't have to worry about paying out of pocket for claims on that item.
Tips for Insuring Holiday Gifts
- Talk to an agent ASAP: When you buy or receive an expensive item, let your insurance know about it right away. You could find yourself losing a pair of newly gifted earrings while walking around town or dropping a brand-new TV while mounting it. Getting insurance as fast as possible will help in the long run.
- Get your item appraised quickly: If your insurance is going to give scheduled coverage for an item, you may want to get it appraised. The sooner that this is completed, the sooner you know the full value of the gift.
- Consider shipping insurance: The USPS is a trusted system, but sometimes packages get lost or destroyed in transit, and homeowner's insurance may not cover it. Shipping insurance can help safeguard these items.
- Notify recipients and friends of gifts: Consider giving your family or friends a heads-up that they will be receiving a package soon. Share this article with your loved ones and let them know the benefits of having holiday gift coverage. Knowledge is power!
Adding valuable gifts to your insurance may raise your premiums slightly, but if an accident happens, the right coverage can help keep your holiday season stress-free. Enjoy the magic of the season and the gift-giving that comes with it, and get holiday gift insurance today.
Discover the right coverage for you this season. Get a quote today.