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Charles Meyer Insurance Agency Blog

All You Ever Wanted to Know About Insurance

Why it makes sense to insure expensive holiday gifts

If there's going to be something rather out of the ordinary under your Christmas tree this season like a diamond ring, fur coat or some other luxury item, you should probably look into making sure that it's adequately covered from an insurance perspective. Here are a few tips to follow that will certainly help.

Though your homeowners or renters insurance will cover most items, the payout might be capped under a standard policy, and all coverage is subject to the policy deductible. That can leave you with out-of-pocket expenses for which you are unprepared in the event that something unexpected takes place.

Typically, items such as jewelry, furs, collectibles and precious stones are limited to $1,000 to $2,000, according to the Insurance Information Institute.

The good news is that most carriers offer additional options to expand your coverage. 

#1:  Increasing Internal Limits

This endorsement allows the policyholder to increase the claim limit of a specific category. For instance, a standard policy might have an overall claim limit of $2,500 for jewelry. If you have two rings valued at $2,000 each, the standard policy would cover all of one ring and part of the other.

However, even increasing the limit may be insufficient. Most insurers have per-item limits, so if one of your rings is valued at $10,000, an endorsement could fall far short of covering the full value.

This is when you would want to consider scheduled personal property.

#2:  Scheduling Personal Property

Any single item whose value exceeds a category claim limit is a potential candidate for scheduling (or specifically insuring), which extends coverage for a specific item, such as that $10,000 ring. Each scheduled item is insured individually for its agreed-upon or appraised value.

From the Insurance Information Institute:

"Scheduling each piece or item may cost more in premiums, but it offers broader protection because the policyholder is buying back many of the excluded loss tyeps, including accidental losses -- such as dropping your ring down the drain of the kitchen sink or leaving an expensive watch in a hotel room -- that your homeowners insurance policy will not cover. The items covered must be professionally appraised and that appraisal description is actually described verbatim in the policy endorsement. The cost of this service varies depending on where you live."  

Scheduling personal property also buys back the deductible, so no deductible would apply in the event of a claim.  This is the best way to accurately insure a high valued items.  Typically, the premiums for this type of coverage range from $1 to $1.50 per hundred dollars that the jewelry’s appraisal. Based on the average engagement purchase price of $4,000, you're looking at just $40 to $60 per year for insurance.

So whether you're on the giving or receiving end of an expensive gift, we recommend you give us a call to discuss how we can make sure it's covered, long after the Holidays have come and gone.