So You Got a Big Holiday Present. Now What?
The holidays and special occasions are about so much more than the size of the gift. But sometimes a really big present adds extra excitement to the day. If you were given a generous gift — congratulations! While there is definitely some excitement, there are some practical considerations too. In addition to sentimental value, that gift has real value and it 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 homeowner’s 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 luxe coat gift 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 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?
When bling makes your heart sing, then jewelry is the holiday gift for you. If you got jewelry as a present you probably already have some coverage under your homeowners insurance or your 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 get a better idea of whether you should add a jewelry rider to your insurance policy. A chat with your American Family Insurance agent can help you understand your current jewelry coverage and if you need more protection.
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 is a little extra hassle involved, the dealer is probably more than happy to help you give this memorable gift.
Car title. 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 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.
IRS forms. If the value of the vehicle is over 10,000 and the receiver and giver are not married, the receiver will need to complete an IRS cash reporting form. This can wait until after the gift is given, so it’s not going to ruin the surprise, but the gift will have to be reported on their taxes.
Additional paperwork. 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!
Car insurance. 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 best to connect with your American Family Insurance agent to let them know you’re planning on giving a car as a gift and they can get the ball rolling for you. That way it’ll be ready to be insured once it’s received.
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.