Expensive holiday gifts, such as jewelry, electronics, or fine art, are popular during the festive season. However, their high value raises the question: Are these items covered under your insurance policy? Here's a breakdown of what you need to know to protect your valuables.
Coverage Under Standard Homeowners or Renters Insurance
Most standard homeowners and renters insurance policies include coverage for personal belongings, which often extends to holiday gifts. If these items are stolen, lost in a fire, or damaged by a covered peril, your policy may reimburse you. However, this coverage comes with limits, especially for high-value items like jewelry, fine art, or collectibles.
Policy Limits and Sub-limits
Insurance policies typically have a cap on how much they'll pay for personal property. For high-value items, sub-limits apply, which may be significantly lower than the item's worth. For example, jewelry might have a sublimit of $1,500. If your holiday gift exceeds this amount, the standard policy may not fully cover it.
Consider Scheduling High-Value Items
You could want to segregate valuable gifts on your insurance to guarantee complete protection. Often covering losses like accidental damage or mystery disappearance that ordinary policies could exclude, scheduled personal property coverage offers more general protection. Items must be scheduled with an assessment of value to guarantee correct coverage.
Protecting Gifts Before They're Given
Holiday gifts are often stored in your home before being presented. These items are typically covered under your existing policy during this time. If you're traveling with gifts, check whether your policy extends coverage to personal belongings off-premises. Some policies cover items up to 10% of your total personal property limit while away from home.
What About Gift Recipients?
Once you give a gift, the recipient becomes responsible for insuring it. If the recipient lives in your home, the gift may still be covered under your policy. However, if they live elsewhere, they'll need their own insurance to protect the item.
Steps to Safeguard Your Gifts
- Document the items: Keep receipts and take photos of expensive gifts for record-keeping.
- Inform your insurer: Contact your insurance company about high-value acquisitions and update your policy as needed.
- Store securely: Use safes or locked storage to protect gifts from theft or damage.
Conclusion
While your homeowners' or renters' insurance likely covers holiday gifts, the coverage may not be sufficient for high-value items. Scheduling these items or increasing your policy limits ensures adequate protection, giving you peace of mind during the festive season.