You have the perfect Valentine’s Day planned – flowers, dinner, and a sparkly gift in a box tied with a red bow, but what about insurance for that gift?
If you’re planning to woo your loved one with a pricy present, it’s important to make sure you get it insured.
Many gift buyers make the mistake of assuming their home insurance policy will cover anything they buy.
Here are three good reasons not to count on your home insurance:
- Coverage for certain types of valuables – such as jewelry, fine art, antiques, furs and Oriental rugs – usually is limited to about $1,500 to $2,000 under a standard home insurance policy.
- For your home insurance to cover the loss of that token of your affection, it would have to be lost in a “peril” that’s covered by the policy, such as theft or fire.
- Even if the item is covered under your home insurance, you’ll have to pay a deductible.
However, you can buy extra home insurance coverage for a ring or another Valentine’s Day gift.
So, how do you decide whether your gift requires insurance? It depends on the type of gift.
Jewelry probably is the most common gift that should be insured. You’ll want to consider the value of the jewelry or any other gift. Some people would say a $5,000 pair of earrings is not worth insuring, and for other people it’s their life savings.
If you do decide the gift requires insurance, don’t put it off. You could lose the gift or it could get stolen.
To avoid having your Valentine’s Day ruined by a mishap, we recommend taking these steps:
1. Get the item appraised. A receipt will do in a pinch, but valuable jewelry – or art, antiques or a fur coat – should be appraised.
2. Add the gift to your home insurance policy. If you have home or renter’s insurance, consider buying a rider, an add-on to your policy that will cover the item. Adding a rider to an existing policy is the easiest, most inexpensive way to insure a gift.
3. Buy insurance separately. If you don’t have home or renter’s insurance, you can buy a separate insurance policy for valuables. But it likely will cost more than an add-on policy because insurance companies require a minimum dollar amount to write a policy.
4. Snap some photos. It’s a good idea to take pictures or a video of the item. The more documentation you have if it’s lost, the easier it makes the claims process. Having a photo jogs your memory and provides documentation for the claims adjuster should something happen.