In case you’ve misplaced you Advent calendar or turned off your radios, TV’s and social media outlets, we are here to remind you that Christmas is near! With holiday parties, Christmas vacations and shopping keeping us all preoccupied and busy, it is important to remember to think about protecting the gifts that you may be giving or receiving this holiday season.
Around this time of the year, the value of what you own can change quickly. Rest assured that, when someone in the family gets a new iPhone or diamond earrings on Christmas morning, those items are automatically insured by homeowners or renters coverage. However, it is crucial to understand that these policies have limits for the amount of personal property you own. To get a better idea of how you can protect your Christmas gifts (or any gifts), we’ve listed a few considerations regarding your home insurance and how new, valuable possessions may be impacted.
Actual Cash Value vs. Replacement Cost: As we mentioned above, your homeowner’s insurance policy will have a coverage limit for your personal possessions, but depending on the policy, this coverage could be for the items’ actual cash value instead of replacement cost. Whereas actual cash value takes into consideration depreciation, replacement cost coverage is based on the amount it would cost to buy the new item.
According to Trusted Choice, replacement coverage costs about 10% more than actual cash value coverage. Understanding the difference between these two coverages is important when determining the total value of your person property and finding the right coverage to protect it.
Coverage limits: Coverage limits are another variable to consider when it comes to insuring your valuables. Within the personal property coverage limit under your home insurance policy, you may also have sub-limits for certain types of property for theft; such as a $2,000 limit for jewelry, for example. If this is the case, a new engagement ring or diamond necklace could cause the value of your jewelry to exceed this limit, leaving some of your valuables unprotected. It might be a good idea to review your home insurance coverage with your Starke insurance agent and adjust it accordingly.
Collectibles Insurance: If you’re hoping to find a one-of-a-kind collector’s item under your tree on Christmas morning, this next tip is for you: You may want to consider a separate type of coverage known as collectibles or stated amount insurance. Since homeowners or renters insurance might offer you only a small amount of coverage if your collectibles suffer damage, it may be time to look into collectibles insurance to protect some of your most prized possessions.
For more information on insuring your holiday gifts, give one of the Starke agents a call at 334-263-5535 or visit us online.
From everyone at Starke Insurance Agency, we wish you a very Merry Christmas and happy 2015!