Gift-giving is a part of the holiday season for many. It's also when some people pop the question with an engagement ring. Insurance should factor when buying valuable gifts like jewelry and vehicles. The National Association of Insurance Commissioners (NAIC) offers these considerations for insuring expensive gifts.
Know Your Coverage
Before you buy an engagement ring or expensive jewelry, know what your policy says. Most homeowners and renter's insurance include jewelry as personal property, but that coverage may not be enough to cover your purchase. Many policies set a limit and might not protect against all losses. Given the sentimental value of some heirlooms, think about coverage for all situations.
- Your standard policy might only cover a fraction of what your jewelry is worth.
- Most policies will protect against theft, but you may need additional coverage to protect your jewelry against damage or loss.
Check with your insurance agent to better understand the scope of your policy. If it's not enough to cover the items you want to protect, consider purchasing a separate policy or adding an endorsement.
Appraise and Document Your Jewelry and Collectibles
You must know the value of your items to ensure you have the right coverage. In many cases, insurers will require an appraisal.
Contemporary art, heirlooms or jewelry may gain value over time. For these items, you should consider a rider that pays the increased value if the gift is stolen or damaged. Some policies may require periodic appraisal. Store photos of each item and a copy of the appraisal in a safe place and add them to your home inventory.
An item's dollar value has the most influence on your premium and deductible, which is why an accurate appraisal is important. For expensive jewelry pieces, secure storage and how often you wear it can affect your policy. For example, items worn daily carry more risk due to more exposure to loss or damage.
Ask your insurance agent about discounts for having a home safe, alarm system or safety deposit box.
Purchasing a Vehicle as a Gift
If you're buying a new car, SUV or truck as a gift, the person driving it off the lot will need coverage to leave the dealership. If you already have coverage, you may have a grace period to add the car to your policy.
If you share an auto insurance policy with the person receiving the new gift, the process can be easy. Simply add the car to your shared policy and transfer the title.
Updating Your Home Inventory
Add any expensive or sizable gifts to your home inventory. If you need to start a home inventory, check out the NAIC myHOME Scr.APP.book application (Apple Play or Google Play) or the Insure U checklist. Include as many details as you can, take photos of each item and take videos of rooms in your house. Most home insurance policies have standard limits for big-ticket items like electronics, art, jewelry or sporting equipment. You may need special coverage, so call your agent to discuss your policy.
If you have questions about expensive gifts and insurance, please contact your state insurance department. For more information about your insurance needs and tips for choosing the coverage that is best for you, visit Insure U.