If you’re splurging on an amazing gift this year, it makes sense to protect your purchase.
While it is great to exchange gifts with loved ones, a lost or damaged gift will not be remembered. Before you rush to the jewelry shop with a $5,000 necklace in your hand, plan to insure it. You should have insurance if you buy a gift that exceeds $500 or if replacing it would be financially difficult.
Here are some ways to cover a large gift, whether it hangs on a wall or sits in a garage.
Renters or home owners insurance can be expanded
You can insure expensive gifts by simply increasing your homeowner or renter coverage. Standard policies cover items like cameras and bicycles if they are stolen or damaged.
However, coverage for valuables like jewelry, art, and collectibles is usually limited to $1,000 to $5,000. This is after you have paid your deductible.
You can expand your homeowners insurance coverage with a “scheduled” rider, floater or endorsement. Scheduled items are covered based on the cost of the item or their current value. To get coverage, you will need to provide receipts or an appraisal from a licensed professional. This insurance is great for protecting fur and jewelry as well as gifts that may increase in value such art or heirlooms.
Talk to your agent or insurer to help you choose between coverage options, such as a scheduled rider versus standalone jewelry insurance for an engagement ring.
Buy standalone policies
Certain policies are only covered by some insurers, such as jewelry, electronics, and boats. If your loved one doesn’t have homeowners or renters insurance, these policies could provide peace of mind.
If the gift is to be used for business purposes, you might consider a standalone policy. This is a common exclusion in homeowners insurance policies.
Sending a gift is a delicate matter.
If the gift must travel, there is a greater chance that it will be lost, stolen, or damaged. If you need to ship fragile items, such as fine art, hire a professional packer and shipper. Make sure they have insurance.
It is normal to shop online during a pandemic. Before you click “purchase”, think about where your gift will arrive. It is becoming more common for packages to be stolen online. You might consider using a shipping service that requires signature at delivery. Or, ask the recipient discreetly if they have security cameras.
Before you drive off the lot, get auto insurance
It sounds wonderful to surprise your loved ones with a brand new SUV wrapped in red ribbon. However, it is not as simple as holiday commercials would have you believe. The vehicle will need car insurance, including coverage to get it off the lot.
It’s easy to add the car to an existing auto insurance policy that you have with the gift receiver. Then, transfer the title. If you buy a vehicle for someone else, they will need their own insurance.
You might surprise them at the dealership, rather than in the driveway. This will ensure that the car is properly titled from the beginning and is insured. They’ll love the big red bow, but they will not appreciate it.