Protect your gifts, gadgets and gizmos
My friend Karen called a couple of weeks ago to ask questions about the Christmas presents she is buying her family. Apparently she and husband Mike decided to spend Mike’s year end bonus on a few special items under the tree. One of the items she had shipped came damaged and the store replaced it immediately with no charge, but it got her thinking about what happens once the presents are opened...
She and Mike got a new 60 inch plasma HDTV for the family room. This is the room where they host Super Bowl parties and where Patrick, Cameron and Emily’s friends hang out. Karen is concerned if someone knocked the TV off the wall or damaged the screen, the cost to replace it would be prohibitive. The TV is also hooked up to the Wii, Xbox and the Blue Ray player. Also, not a fussy decorator, Karen is concerned about the cost to replace or repair the 2 year old leather sectional if it is torn or damaged. Super Bowl Sunday is known to get a little boisterous at their house.
Mike and Karen are getting a new iPad and between them the kids will get an iPod, Netbook computer, a Kindle reader and all of the chargers, covers and accessories needed. These small electronics just compliment the family’s existing cell phones, other MP3 players, laptops, game players, flash drives, external hard drives, digital cameras, and toys galore. With Mike on the road all day, Patrick away at college and Cam and Emily using these items daily for homework and relaxation the chances of one of these gadgets or gizmos getting damaged, lost or stolen seems fairly high.
So what can they do to protect their stuff?
I recommended Karen call her agent and find out if her homeowner’s policy includes “Named Exclusions” on her contents. This option costs more than the standard content coverages but gives coverage for almost any type of loss. So if you send a Wii controller through the plasma TV or sit on the sofa with your keys in your back pocket and shred the leather, your homeowners' policy will cover the loss. The down side to this is your policy deductible still applies and if you have increased it to save premium, it may be too high to help with some of these smaller items. Balancing deductible, premium, coverage and limits is something your agent can help you with. Remember though, you also want to be careful about putting in too many small claims; insurance should be used for the catastrophic losses you can’t absorb yourself. Your company could cancel you for frequency of claims if you report every small loss.
Another word of caution regarding Christmas gifts; the gift cards you received are treated like cash by your insurance company. The standard homeowner’s policy limits theft of cash to $200 with no coverage at all if they are lost or misplaced, and again the policy deductible will apply. If you have the “Named Exclusions” coverage on your contents, lost cards are covered but still only for $200. With some policies, you may already have increased the coverage when you wrote the policy or may be able to purchase additional coverage, up to $1,000. If you typically have cash or several gift cards in the house or in your wallet talk to your agent about your best options to protect yourself. Don’t forget Christmas isn’t the only time you have these cards on hand.
Hopefully you had a great holiday and need to talk to your agent about these questions.