Covering the Holidays

Are you covered if the holiday presents you just bought are stolen from your car? What if they’re destroyed at home by a fire or a storm?

If you have a homeowners, renters or condominium owners policy, you are covered, according to Nick McCummings, manager of Harrington Insurance Agency’s office in Brockton, Mass.

“The second you buy something, your possessions are covered,” he says.

But there are a couple of caveats. You must pay the deductible out of pocket. If gifts worth $2,500 were stolen and you have a $500 deductible, your insurer would pay $2,000.

More important, a few types of items have limited coverage under standard policies.

Coverage for jewelry, watches, furs, precious and semi-precious stones is limited to $1,500 for loss by theft only. Silverware, goldware, platinumware and the like are covered for theft up to $2,500. Coverage for firearms, money, securities and stamps is also limited when the loss is by theft, he points out.

So, if you buy your spouse an $11,000 diamond ring or a grandchild a stash of gold coins, it’s wise to get insurance.

Insurance for most types of special items is available and fairly inexpensive, McCummings says. You just add an endorsement to your home, renters or condo policy. Insurance agents call this scheduling. You will need an up to date appraisal or a receipt to establish the value of the item.

Scheduled coverage is “all risk” — nearly all causes of loss are covered without a deductible. If a scheduled item is stolen, destroyed or lost, the insurer will pay in full, up to the amount it was insured for. In some instances, they may elect to replace the item at their cost instead.

“I always recommend scheduling all highly valuable items,” he says.

So, if you’re buying an expensive piece of jewelry or the like, have the jeweler fax the appraisal to your agent, who can schedule the item immediately, McCummings advises.

If you give the present to anyone who doesn’t live with you, contact your agent after Christmas. The insurer will cancel the endorsement and credit you for the unused portion. But urge the recipient to insure the item on their own homeowners, renters or condo policy, McCummings says.

Many valuable items, like rugs, paintings, high-end electronics and antiques, aren’t subject to strict coverage limits. But here the problem is proving the value of what you lost, McCummings says.

Scheduling removes the guesswork because the insurer always insists on getting proof of the item’s value at the start, he says. Then, if there is a loss, you won’t have to worry about how much you’ll collect.