Get the right insurance for your gifts
- Coverage clarity
- Planning ahead
- Homeowners insurance
- Recreational toy insurance
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Does homeowners insurance cover gifts? The short answer is yes, but the longer answer is maybe, and it depends. Holiday gift giving is great, but without holiday gift insurance, you’re potentially leaving those gifts at risk.
While homeowners insurance covers possessions in the home, some items like fine art or jewelry would benefit from some additional coverage. Take this example: Erilyn doesn’t have much jewelry; she estimates the total worth of her jewelry to be about $500. She was gifted a necklace worth $400. Erilyn’s current homeowners insurance likely covers her gift because the total value of all of her jewelry is $900 and homeowners policies typically cover $1,500 in jewelry. However, to be safe, she should check her policy to see exactly what jewelry coverage she has.
Another example: Stephanie also had about $500 in jewelry. This year, her grandmother passes down $4,000 worth of jewelry bringing the total value of her jewelry to $4,500, well over the limit for most homeowners policies. Overnight, Stephanie went from having sufficient jewelry coverage to not enough. For Stephanie, additional insurance is necessary.
Those examples were jewelry, but the lessons apply to many big-ticket items. Look at your policy to see your limits and if the gifts you’ve received push you over the threshold making increased insurance for holiday gifts a must.
Here are some common gifts that you may need additional coverage for.
But what if you’re the giver, not the receiver?
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We know that homeowners insurance does cover gifts in certain circumstances, after they’ve been gifted. There are ways to protect items before they’re gifted as well. A typical homeowners policy will cover up to $2,500 for a single item. If the gift you’re giving costs less than that, you probably don’t have to do anything. If it costs more than that, you may want to consider temporarily increasing your coverage. It’s a small increase, so it’s likely worth it for the peace of mind. Talk to the VIU by HUB Advisory Team about the gifts you’ve purchased, your policy and your aversion to risk to get personalized advice for you.
Now you’ve got coverage for the gifts you have wrapped and are waiting to give. You know to get coverage for the gifts you will have received. What about the gifts that don’t make it?
The good news is that home insurance covers porch pirate theft in addition to burglary. However, this is only useful if the cost of your stolen gifts or deliveries are more than your deductible. It’s worth checking with your credit card company to look into purchase protection features that they may offer.
It’s best to consider tips for avoiding holiday theft rather than insurance tips for after holiday theft. We’ve put together some things that you can do at home to keep your gifts and deliveries safe.
