By Sheryl Smolkin
So your guy finally popped the question at Christmas and now you are sporting a shiny new bauble on your left hand. I hope after you called your parents, your next call was to your insurance company.
Whether Santa brought you a sparkling engagement ring, a stunning piece of art, a new set of golf clubs or a fast new bike, it is important to to make sure the items are properly insured.
When my husband and I got engaged he was still a student. The ring he gave me cost $300 and I almost got run over crossing Bloor St. in Toronto because I was so busy admiring it. In spite of its sentimental value I never worried about insurance for that ring, but 25 years later he bought me a much more costly replacement for our anniversary.
We are insured with TD Insurance through Security National. TD’s entry level gold policy limits recovery for theft or loss of jewellery to $4,000. Although we have the platinum policy which covers jewellery up to a value of $12,000, by the time I added up the bits and pieces I’ve acquired over the years including my newest acquisition, I realized our coverage wasn’t nearly enough.
So I decided to bite the bullet and purchase an additional floater (also called an endorsement) to cover my ring at the annual cost of $18.78/$1,000 of coverage. And I’m very glad that I did.
Several years later we were in Stratford for the weekend and went to a local gym on Sunday morning. I looked down at my right hand as we left the parking lot and was horrified to see the pear shape solitaire was missing from my ring. Even after searching in all the obvious places including a bin of wet, dirty towels, it was nowhere to be found.
I reported the loss to my insurance company and within a few weeks they calculated the replacement value of a stone of similar size and quality and paid that amount to my jeweller, inclusive of taxes. If I hadn’t intended to replace the stone, I could have received a personal cheque minus the taxes.
Prices for floaters and endorsements vary depending on the item, the insurance company you choose, where you live and where the item will be kept. There are no deductibles and frequently you get the option of having the insurance company replace the item for you.
To make sure your recently acquired valuables are adequately protected, the Insurance Information Institute (I.I.I) makes the following five suggestions:
- Contact your insurance company immediately: Let the company representative know that you now own a new piece of jewelry or other expensive item. Find out how much coverage you have under your current policy and whether additional insurance is needed.
- Keep a copy of the store receipt: Forward a copy of the receipt to your insurer so that the company knows the current retail value of the item. Keep a copy for yourself and include it with your home inventory.
- Have jewelry appraised: New jewelry should come with an appraisal. Heirlooms and antique jewelry will have to be appraised for their dollar value. It is important that expensive items be appraised properly because if you purchase a floater, you will pay a premium based on the appraised value and, in the event of a claim, be compensated for this dollar amount.
- Take a photo or video of the item: With a camera in every smartphone, keeping a visual record of all of your personal possessions is easier than ever. If you use a video camera, you can also provide a verbal description of the item or collection. This helps to document your loss and speed up the claims process. It is also useful for documenting antique and unusual items.
- Add the item to your home inventory: A home inventory can help you purchase the correct amount of insurance and speed up the claims process when there is a loss. To make creating your inventory as easy as possible, you can use the I.I.I.’s free Web-based home inventory software, Know Your Stuff® – Home Inventory. You can also download the free app for iPhones and Androids.
- Store valuables in a secure location: Protect your jewellery by storing it in a secure location in your home. If you don’t wear the item regularly or are saving it for a family member, consider keeping it in a safe deposit box. You may save money on the cost of insuring it, as some companies offer “in vault” coverage.
Do you have any other ideas how to protect your valuables? Send us an email to email@example.com. If your idea is posted, your name will be entered in a quarterly draw for a gift card. And remember to put a dollar in the retirement savings jar every time you take steps to ensure your valuables are properly documented and stored in accordance with the suggestions above.
If you would like to send us other money saving ideas, here are the themes for the next three weeks:
|31-Jan||Winter vacation||How to protect your credit cards on vacation|
|7-Feb||Valentine’s Day||Budget-friendly Valentine’s Day ideas|
|14-Feb||Retirement savings||Pros & cons of available savings vehicles|