I'm sure you're thrilled if Santa left you that set of high-end
golf clubs, diamond ring or piece of artwork you wanted under the
Christmas tree. Now you need to make sure that expensive item is
protected by properly insuring it.
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Your standard homeowners or renters policy should cover personal
possessions, but it might limit the amount of coverage on items
such as jewelry, furs and collectibles to $1,000 to $2,000,
according to the Insurance Information Institute. In that case,
you'll need a "floater" policy, which provides additional coverage
and protection for "mysterious disappearance" (i.e. loss) of such
items. Floaters even provide protection for musical instruments and
The Insurance Information Institute recommends you take these
steps to protect any exceptionally expensive gifts you might have
received for the holidays:
Alert your insurer
to find out whether you need additional coverage to protect your
Ask if you have a replacement cost or actual cash value
A replacement cost policy pays to replace items at their current
market value, while an actual cash value policy pays to replace
items at their value minus depreciation. For this reason,
replacement cost coverage is about 10% more than actual cash value,
but the Insurance Information Institute says that it's a better
value in the long run.
Send a copy of the receipt
for your item to your insurance company so it knows the current
value. Keep your receipt in your home inventory file.
Have the item appraised
if you don't have a receipt or if it's an antique. Ask your insurer
to recommend a reputable appraiser. The premium for your floater
will be based on the appraised value and you'll be compensated for
this amount if something happens to your item.
Photograph or video the item and add it to your home
If something happens to the items, a visual record will help
document the loss and speed up the claims process. Add the photo or
video to your home inventory. If you don't have a home inventory,
start putting one together now. The Insurance Information
Know Your Stuff
software can help you create a home inventory.
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