Giving an Expensive Present? Here’s How To Insure It Properly

Posted on Nov 19, 2021
Giving an Expensive Present Here's How To Insure It Properly

Are you searching for the perfect, extravagant gift for your wife, husband, child, or a loved one for their birthday, holiday, or special occasion? Whether it be a new car for your child’s sweet 16, an engagement ring for your bride-to-be, or an expensive “just because” gift – it is important that you insure it properly.

Broaden your homeowners or renters insurance

When making an expensive gift purchase for a loved one who resides within the same home as you, it’s recommended to give your homeowners insurance or renters insurance policy a thorough read to see what it covers.

The majority of homeowner insurance policies limit coverage from $1,000 to $5,000 for valuables such as jewelry or art.  In addition, some policy forms assign a maximum limit per item. So while you have limited automatic coverage, it may not be sufficient, nor may the coverage form be as broad as you may hope.   

Purchase a specialized standalone insurance policy

A Personal Articles Floater ( PAF) can be added to your existing homeowner’s policy as an endorsement. These policies specifically schedule at an assigned value for broad special form perils and worldwide territory.  You may schedule jewelry, cameras, furs, stamps, coins, instruments, silverware, and golf equipment.   Appraisals may be necessary for higher valued items, but in some cases, a bill of sale will suffice.

It is important to note that when scheduling items, coverage for “mysterious disappearance “is included; this is broader than the burglary and robbery definitions included in the standard homeowners policy.

Ship items with confidence

Online shopping is at an all-time high with the Covid-19 pandemic, meaning thousands of items are shipped worldwide each day. The growing number of packages being shipped from place to place leads to an increased risk of a package being lost, damaged during transit, or worse, stolen.

If you’re making purchases online from a retailer, it’s important to understand the specifics of the company’s shipping policy. Do your due diligence to determine if and what insurance is provided on all orders that are shipped from the company, especially if you are making an expensive purchase. Many orders that are shipped with a preassigned limit for insurance consider increasing the amount of insurance to protect against a lost or damaged item of more expensive purchases.

Before you bring the perfectly wrapped gift to the post office, think about where the item will be shipped. Make sure the package will not be left unattended for an extended period of time, leaving less of an opportunity for the item to be stolen. In addition, utilize the option during shipping that requires the recipient to sign for the package upon delivery, as this can offer you protection. 

Looking to purchase a new car for your loved one? Think before you buy

Many parents dream of surprising their child on their 16th birthday with a new car with a big, bright red bow placed on top of it, waiting in the driveway for them when they wake up. Maybe you want to repay a loved one for all they have done for you with a new vehicle to show your appreciation? There are some things you should consider before leaping into the big purchase.

Automotive insurance must be placed on any vehicle purchased before driving off of the lot. While it is a relatively simple process when adding a vehicle to your insurance policy, the person driving it should also be listed as a driver on the insurance policy.  They will need to be covered if something were to happen while they were driving the vehicle.

Adding a child to your insurance policy is common for parents when the child gets their license, but what about when you purchase a vehicle for someone who is not on your policy? Consider surprising your loved one at the dealership!

The thought and gesture will still be just as grand, and they’ll be able to have the vehicle placed on their insurance policy to ensure both them and the new vehicle are covered.

Gift giving is a great way to show someone you love them and are thinking of them, but be sure to think of your exposure and insure appropriately.

Reach out to Otterstedt Insurance Agency to insure your expensive gifts.

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