Should You Add Big Holiday Purchases to Your Home Insurance Policy?

The holidays are a time for gift-giving, and for many Canadians those gifts are particularly special. They can include jewelry, high-priced electronics and other big-ticket items. After such a large and important expense, the last thing you want is to lose the item. Maybe you can't prevent theft or damage, but you can make sure those items are properly insured. Your home insurance is the place to start because you may have to update your policy after those holiday purchases.

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What Home Insurance Typically Covers

Home insurance gives you protection for belongings in your home and vehicle. But there are certain provisions to that coverage. Your policy may not cover valuables, like special collections, jewelry, and family heirlooms. You may need to purchase separate coverage for these. Also, something like the theft of your new vehicle -- not what's kept inside it -- may have its own insurance, and therefore isn't covered by home insurance at all.

The basic rule is that items kept in your home or car are usually protected. That can include things belonging to someone else that are kept in your home temporarily. That's an important detail if you are thinking about big gifts at holiday time: for example, if your children split their time between more than one household, and you buy them new laptops, you might want to confirm whether those items are covered under your home insurance or that of the children’s other parent.

Coverage also comes with monetary limits. Let's say jewelry is covered, but only to a maximum $5,000. If you gift a member of your household with a piece worth more than this amount, you won't be able to claim its full worth in the event of loss.

The starting point is to know what's already in your policy, and where the new purchase fits in.

When to Update Your Policy

If you need to change your home insurance policy, there are several potential avenues. Some of the options include:

  • Increasing coverage limits
  • Adding additional coverage for the particular item, or category of items
  • Buying separate insurance for the new item

You may want to start this conversation with your existing insurance company. They can offer to update your policy. Before you call, have an inventory of what you have purchased (or plan to purchase) including its value, specifications, and to whom it will belong. For particularly unique items like jewelry, you may want to have an appraiser offer an official assessment of value.

You may choose an updated policy that will include higher premiums. You may be given the option to reduce your premium cost in exchange for a higher deductible amount. At the same time, your insurance company may discount the insurance cost if you take steps to keep the item secure, like keeping it in a safety deposit box.

Finding the Right Insurance

At any time, you have the option to get a new policy from another insurer. If you are satisfied with your home insurance, you might even want to consider a stand-alone insurance for the new, high ticket purchase. Whatever route you take, you can rest assured by comparing home insurance coverage that will give you peace of mind before you for that extra special holiday gift.

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