Skip to content Accessibility info

Advanced Insurance Solutions Blog

All You Ever Wanted to Know About Insurance

Big-ticket Christmas gifts and their insurance implications

Purchasing all the gifts listed in "The Twelve Days of Christmas" will set you back $34,363 this year, up from $233 in 2015, according to the 33rd annual PNC Wealth Management Christmas Price Index.

Of course, maybe a recipient would prefer a high-end guitar to geese-a-laying, or a diamond engagement ring to five gold rings. Regardless, big-ticket Christmas gifts not only are costly to purchase, but they could be expensive for your household to replace in the event they are damaged or destroyed.

It's a good idea to consider your insurance coverage should something go awry. 

Tracy Hartman, operations manager for Advanced Insurance Solutions, said your homeowners or renters insurance will cover most items. However, the payout might be capped under a standard policy, and all coverage is subject to the policy deductible. This can leave you with out-of-pocket expenses for which you are unprepared.

Typically, items such as jewelry, furs, collectibles and precious stones are limited to $1,000 to $2,000, according to the Insurance Information Institute.

The good news is that most carriers offer additional options to expand your coverage.

Also called a rider, an endorsement allows the policy holder to increase the claim limit of a specific category.

For instance, a standard policy might have an overall claim limit of $2,500 for jewelry. If you have two rings valued at $2,000 each, the standard policy would cover all of one ring and part of the other.

However, even increasing the limit may be insufficient. Most insurers have per-item limits, so if one of your rings is valued at $10,000, an endorsement could fall far short of covering the full value.

This is when you would want to consider a scheduled floater.

Any single item whose value exceeds a category claim limit is a potential candidate for scheduling (aka floater policy), which extends coverage for a specific item or collection, such as that $10,000 ring. Each scheduled item is insured individually for its agreed-upon or appraised value.

From the Insurance Information Institute:

"Scheduling each piece or item may cost more in premiums, but it offers broader protection because the floater covers losses of any type, including accidental losses -- such as dropping your ring down the drain of the kitchen sink or leaving an expensive watch in a hotel room -- that your homeowners insurance policy will not cover. Before purchasing a floater, the items covered must be professionally appraised. The cost of this service varies depending on where you live."

Some insurance carriers don't allow you to schedule items under a homeowners or renters policy. Instead, they offer a separate personal articles policy, which allows you to schedule items but also covers accidental loss or damage, such as a missing stone in an engagement ring.

This Goodhousekeeping article suggests a policy for jewelry costs $1 to $1.50 per hundred dollars the jewelry is worth. Based on the average engagement purchase price of $4,000, you're looking at just $40 to $60 per year for insurance.

It's best to have a discussion with your insurance agent about how best to protect your valuable items, long after the Twelve Days of Christmas have come and gone.