Splurging on your loved ones. It’s as much of a holiday tradition as caroling and sleigh rides.
But if you’re really going big, say a 10-carat ring, a valuable piece of art or a full-length mink, the next thing you’ll want to do after picking out your holiday gift is to call your insurance broker.
Standard homeowners insurance policies include coverage for personal items such as jewelry. However, many policies limit the dollar amount for theft of valuable personal possessions such as jewelry, furs, and precious stones to $5,000.
That’s obviously not going to be enough for a Piaget, men’s or women’s.
Instead, what you’ll want to properly insure jewelry and any other expensive holiday gift is what’s known as a floater or an endorsement.
The cost for floaters and endorsements will vary depending on the type of jewelry, the insurance company you choose, where you live and where the item will be stored. With floaters and endorsements, there are no deductibles and you will typically get the option of having the insurance company replace the item for you.
In most cases, you also would also be covered for “mysterious disappearance,” so that if your ring falls off your finger or is lost, your policy would protect you.
To make sure your jewelry or other holiday gift is adequately protected, we suggest the following:
Contact your insurance professional immediately. Let your agent know that you’ve made a big buy. Find out how much coverage you might have under your home insurance policy and if additional insurance is needed. Remember, too, that expensive items go up or go down in value. Talk to your agent about how to make sure the dollar amount of your floater or endorsement reflects these changes.
Have the item appraised. It’s important that expensive items are appraised properly. If you purchase a floater or endorsement, your premium will be based on this value, as will any subsequent claim.
Keep a copy of the store receipt and add it to your home inventory. You will need to forward a copy of the receipt to your insurer so that the company knows the current retail value of the item. Keep a copy for yourself and update your home inventory. Also, photograph your purchase. This helps to document your loss and speed up the claims process, particularly for claims involving antique and unusual pieces of jewelry.
Store valuables in a secure location. Storing an infrequently-worn item in a safe deposit box can save you money on the cost of insuring it. Some insurers will offer you an option of purchasing additional coverage for the time your item is in use. You will, of course, have to notify your insurer in advance.
Mike Rosser leads the Private Client Group at CCIG. Reach him at MikeR@thinkccig.com or 720-212-2068.
CCIG is a Denver-area insurance brokerage with the full-service capabilities of a national brokerage. We do more than make sure you have the right policy. We also help you lower your long-term cost of insurance with our risk and claims management expertise and a commitment to service excellence.