Does My Homeowners Insurance Cover My Holiday Gifts?
The holidays and special occasions are about so much more than the size of the gifts you receive. But sometimes a really big present adds extra excitement to the day. If you were given a generous gift — congratulations! In addition to sentimental value, that gift has financial value and should be protected, just in case anything happens. Is it already covered by insurance you have or do you need more coverage? Let’s look at some possible scenarios.
What Does Your Homeowners or Renters Insurance Cover?
If you already have renters insurance or homeowners insurance, then most of your big-ticket gifts are already covered. This means that new big screen TV, cool gaming system, expensive designer purse or fancy coat may already be protected. In most situations, 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. This typically means there is a limit on the amount you’ll get for certain property, so you may need to add more coverage. With scheduled personal property insurance, you’ll get coverage that helps protect the financial value of your gift. You’ll also want to check to see if there’s 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 with a new one. Check in with your agent to make sure you have coverage that includes replacement cost or actual cash value, because actual cash value considers depreciation in the value of the item while replacement cost does not.
Did You Get Jewelry for the Holidays?
If you received jewelry as a present, you probably already have some coverage under your homeowners or renters insurance. But that coverage may be limited, just as it is with any electronics or other high value gifts you received. It’s not the easiest question to ask, but, if you can determine the value of the jewelry, you can get a better idea of whether you should itemize — or schedule — your jewelry. This type of personal property coverage broadens what you’re covered for by insuring your jewelry against all losses except those that are specifically excluded by your policy.
A chat with your insurance agent can help you understand your current jewelry coverage and if you need more protection.
To determine how much personal property coverage you need for your new jewelry, make sure you know its value. Whether that’s its purchase price or appraisal value, take that number and make sure to purchase enough coverage to finance the cost of replacing your jewelry. And if you plan to travel with this particular gift or are prone to losing things, a scheduled personal property endorsement can help protect your jewelry’s value should it be lost.
Did You Get a Car for the Holidays?
The really big bows are saved for one special purchase — a new car! While you may be thrilled to find that big bow in your driveway, you’ll see that this present has some special considerations, too. Cars are a little different than other big holiday gifts — they come with legal requirements. While there are a few more steps involved, the dealer is probably more than happy to help you give this memorable gift.
If the giver is going to be on the title, then it’s a little easier to navigate the paperwork. If the giver isn’t on the title, you’ll need to get a copy of the recipient’s driver’s license and current insurance. This will require a little extra stealth, but it’ll be worth the surprise. Remember that the titleholder is the named insured for their insurance policy.
If the value of the vehicle is over $10,000 and the recipient and giver are not married, the recipient will need to complete an IRS cash reporting form. This can wait until after the gift is given, so it won’t need to ruin the surprise, but the gift will have to be reported on their taxes.
Heads up that there may be additional forms required by the state or the dealership. Check to make sure everything is filled out and in order so you can all enjoy the moment!
Another thing to consider is car insurance. The car insurance may depend on the relationship of the giver to the recipient, the lien company and the recipient’s current insurance. If the giver is not going to be on the insurance it might be more difficult to insure. In this situation, talk to the dealership. They may have a solution for you and, in some situations, they can put a dealer license plate on the car for overnight delivery and then insurance can be arranged in the morning. It’s also best to connect with your American Family Insurance agent to let them know you received a car as a gift to make sure it’s insured properly before hitting the road.
No matter what gift you received, it’s a great idea to check your insurance policy to see how your personal property is covered and if you need to add more coverage. Each policy is different, so it’s smart to know what your particular policy covers.
If you’ve already taken the proactive step of creating a home inventory, make sure you update it to include your cherished, 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 on your inventory. Your American Family Insurance agent can help you add more coverage if you need it.