In fact, I would take it a step further and advise people to check their homeowners or renters policies, regardless of whether they've bought or received an expensive gift. It's possible they'll find that their possessions are not adequately covered. Here's why:
People accumulate considerable amounts of things like clothes, furniture, and electronics over the years. The values of these items add up. I’ve seen example after example of policyholders being surprised by the combined value of their possessions. It’s been my experience that young people, especially those in their 30s, tend to underestimate their assets' worth. I also have some personal experience with the phenomenon of dollar values sneaking up on you: My son started buying and selling comic books when he was in high school. Most of them were moderately priced. Yet, by the time he left for college, he had five boxes of comics collectively worth thousands of dollars.
If you have homeowners or renters insurance, take stock of your assets and see if your policy affords you sufficient coverage. Look at the “Personal Possessions” or “Contents Coverage” line in your policy's declarations page. If you find that the amount doesn't cover your assets' value, or are not sure, call your agent.
While you’re looking over your policy, check whether your possessions are covered for “full replacement cost” or “actual cash value.” If it’s the latter, your insurer will pay you the replacement cost of an item, less depreciation. Asking your agent to change it to full replacement cost coverage will ensure that your insurance company will pay to replace the item at its current price.
Take some extra time to inventory your assets and confirm you’re adequately protected this year. Then if a cherished gift you received is lost, damaged, or stolen, you’ll be able to continue your enjoyment with a brand-new replacement.
About the Author
Allen Anderson, Senior Vice President, Chief Underwriting Officer, Personal Lines, is responsible for all Personal Lines, Flood Insurance, and Contact Center operations across the company. Allen joined Selective in 2006. His prior experience includes 16 years with Allstate Insurance in various underwriting and product development roles. He earned a B.S. in Business Administration from Nazareth College in New York.