Consider Your Homeowners Schedule Your Seasonal “Nice List”
By Lauren Dallas, Personal Lines Manager
It’s the holiday season! People everywhere are getting excited about giving and receiving gifts. Of course, nobody wants to dampen that enthusiasm by thinking about their insurance policies, but it is very wise to do just that. It is important to add high-value items to your homeowners or renters insurance policy should the item get lost, stolen or damaged.
Whether you are on the giving or receiving end of a valuable gift this season, be sure to add those precious presents to your insurance policy by way of a schedule — perhaps otherwise known as a “nice list” this time of year.
How to Make Sure Those Valuable Gifts Are Fully Insured
During this season of giving, some common gifts that are considered to be “high-value” are things like jewelry, furs, fine art and other expensive or difficult-to-replace items. While it’s easy and understandable to get caught up in the emotional side of such gift exchanges, it’s important to not lose sight of the intellectual aspect of that item’s replacement value. Tragedy strikes at any time — the holiday season included. And small items, like engagement rings, can be easily lost or, unbelievably, stolen. Should that happen before the item is insured, just think of the loss (both financial and sentimental) both the gifter and recipient will endure.
To save yourself unnecessary heartache and monetary distress, make sure the item is properly and completely insured as soon as possible. In almost every case, this means having the item “scheduled” on your homeowners or renters insurance policy, as opposed to merely adding the item as personal property on your policy. If you simply list the new valuable as personal property (and don’t schedule it), that item’s coverage for replacement value may be subject to depreciation and whatever deductible exists on the policy.
Though there may be a minimal fee to have the item scheduled with agreed value, it is often negligible and the benefits far outweigh the costs, should a loss occur. If scheduled, a lost, stolen or damaged item will be insured at 100% of the agreed value of the item, with no deductible applied. In other words, if a diamond ring is insured for $10,000 and needs to be replaced, the insured will receive the full $10,000 come claim time — no depreciation, no deductible…the full $10,000.
Another benefit of having the item scheduled is that the item will be fully insured, even in the event of what’s known as “mysterious disappearance” or being lost by the owner. That’s very often not the case if the item is simply added as personal property to the homeowners or renters policy.
I Gave or Received a High-Value Gift. What Should I Do Now?
If you are on the giving or receiving end of a precious high-value gift this year, take these simple steps to make sure it is fully and appropriately insured:
Call your insurance professional as soon as possible. To avoid a worst-case scenario, contact your insurance professional as soon as you purchase or receive the item and explain the situation. He or she will work with you to help you understand what your options are. Depending on the item’s value, your insurance carrier may require an official appraisal be done (typically if the item exceeds $15,000 in value). Otherwise, an accurate and detailed description of the item may suffice.
Make sure you understand whether you are scheduling the item or merely including it to your personal property contents on your standard policy, with the former most often being our agency’s recommendation.
It never hurts to take photos. Come claim time (whether loss or damage), photos are your friend when trying to recover your loss.
Leave the details to the professionals. There are often nuances involved, so it’s usually best to have your insurance professional guide you through the process. One common example is an engagement ring given to a fiancée who doesn’t yet live with her future husband. The insurance obligations rest with the owner of the item, so that new ring would need to be added to the homeowners or renters policy where the bride-to-be lives — either her own or her parents’, but not her fiancé’s policy. But once the couple moves in together, that item needs to be added to the homeowners or renters policy of their new home. Complications such as this are why it’s often best to simply explain the situation to your insurance professional and let him or her work out the details as appropriate.
Review the value from time to time. Depending on the item, there is a chance that a valuable item, such as fine art, will appreciate over time. It wouldn’t hurt to reassess the value (or formally appraise it) every three to five years, just to make sure that the item’s monetary value isn’t outpacing what you have it insured for.
By all means, enjoy this season of giving and receiving! But don’t lose sight of the fact that some high-value gifts have more than mere sentimental value — they have monetary value as well and need to be insured accordingly.
It may be better to give than receive, but when it comes to claim time, it’s most certainly better to receive the true replacement value, rather than give back a portion of what the item is truly worth.