PROTECT YOUR HOLIDAY PURCHASES
Shop for the Holidays, Understand Existing Insurance
and Store-Offered Extended Warranties
KANSAS CITY, Mo. (Nov. 10, 2010) — As
Thanksgiving approaches, many consumers are making their holiday
gift lists and keeping an eye out for Black Friday and Cyber Monday
deals, especially for items like flat-screen televisions, exercise
equipment, gaming consoles and computers.
You may be excited about bagging a bargain, but before you’re
asked if you want extra protection at the check-out, find out if
you’re already covered for damage or loss.
“Now is a great time to find discounts on popular items,
especially electronics, and it is equally important to insure the
investment,” said Jane L. Cline, National Association of Insurance
Commissioners (NAIC) President and West Virginia Insurance
Commissioner. “Consumers should know what their existing insurance
covers before purchasing additional protection, like an extended
What to Check Before Making Holiday
The NAIC offers the following tips to help decide whether to buy
Find out what your insurance policy already
covers. The first thing to check is your homeowners or
renter’s policy. Find out what household items are covered under
your existing insurance and if there are exemptions. Your insurance
usually protects against theft or damage, though there may be
caveats about what is covered.
“Many homeowners and renter’s insurance policies cover
electronics and other expensive goods up to a certain limit,” said
Cline. “It’s important to do your research ahead of time so you make
financially responsible choices at the register and avoid spending
more than you need to.”
The amount of coverage and the nature of coverage vary with each
homeowners and renter’s insurance policy. If your policy has actual
cash-value coverage, you will be reimbursed for the current cost of
the property at the time of the claim, minus the deductible. If you
have replacement cost coverage, you will be reimbursed for the full
value of the replacement item.
Know the stipulations of your policy or talk to your insurance
agent before making your purchase to avoid doubling up on coverage.
Ask your agent about coverage amount limits to make sure your new
purchases don’t exceed your policy threshold. Certain valuables
might be better covered with an insurance rider or additional
policy, depending on the circumstances. Your agent can help you
assess the benefits and costs when considering this option.
If you are a renter and don’t have renter’s insurance, you might
consider this kind of protection. Although your landlord should have
insurance for structural damage to the building, this coverage does
not extend to your personal property. The average renter’s insurance
policy costs between $15 and $30 per month. Replacing all of your
possessions will cost much more.
Understand the Difference Between Insurance and
Warranties. Part of the holiday shopping tradition is the
extended warranty sales pitch at check-out. However, a warranty is
not insurance and does not cover damage in the way a homeowners or
renter’s policy might.
A manufacturer’s warranty offers a certain kind of guarantee to
the quality or performance of an item for a specified time
period. Some are lifetime warranties; others are one- or
two-year warranties that cover malfunctions or repair needs.
Warranties vary by product, model and manufacturer.
In addition, some retailers offer extended warranties that
typically extend the original manufacturer’s warranty or provide
additional perks and services, such as in-store repair. Unlike a
homeowners or renter’s policy, these warranties do not cover the
cost of replacing the item if it is stolen, but some will cover
certain kinds of damage to the product or product malfunctions.
Update your home inventory. Keep a list of
electronics and other valuable household items with model numbers
and receipts. As you buy, give away or sell belongings over time,
your coverage needs can change. Checking your inventory regularly
can help you save money or avoid being under-insured. A home
inventory can also help when filing a claim after a loss.
For More Information
“Your existing insurance policies might not cover all possible
damages, but it’s important to be informed when weighing the costs
and benefits of additional warranties,” said Cline. “These
situations can be complicated – and often stressful when you’re
pressed for time at check-out – but you can always call your
insurance agent ahead of time to find what options you have for
protecting bigger or more expensive items.”
If you have questions or are confused about your insurance
coverage, contact your state insurance department. Click HERE for your state insurance
department's contact information.Get smart about your insurance
needs. For more information about auto, home, life and health
insurance options – as well as tips for choosing the coverage that
is right for you and your family – visit www.InsureUonline.org.