Coming to Santa's rescue: Insurance for lost gifts

A lot of things can go wrong from the time a gift is purchased until it is delivered to its intended recipient.

Grinches steal Christmas presents from our homes or right out of the backseat of the car in the mall parking lot. And there's the risk that those carefully chosen gifts will be destroyed at home by a fire or a storm.

The good news is people with homeowners, renters or condominium owners insurance policies are covered if anything happens to the Christmas gifts they buy.

"The second you buy something, your possessions are covered," said Nick McCummings, manager of Harrington Insurance Agency in Brockton, Mass. "I try to explain to people that your property is insured and covered anywhere in the world if you have an insurance policy, be it homeowners, renters or condominium.

"A lot of people mistakenly assume their property is not covered outside the home."

There are a few caveats.

You must pay any deductible out of your own pocket. If gifts worth $2,500 were stolen or destroyed and you have a $500 deductible, your insurance company would pay $2,000. There also are a few types of consumer items that have limited coverage under standard insurance policies.

Coverage for jewelry, watches, furs, precious and semi-precious stones is often limited to $1,500 for loss by theft only. Silverware, goldware, platinum and the like are covered for theft up to $2,500.

Dave Phillips, a spokesman for State Farm Insurance Co. in Concordville, Pa., offered a few tips for keeping Christmas gifts safe.

-- Keep all receipts in your wallet or purse. Leaving the receipt in the bag makes it difficult to prove your purchase and easy for thieves to return the items for cash.

-- Move your vehicle to another spot in the parking lot if you opt to drop off purchases to your vehicle at a midpoint in your shopping trip. Onlookers will think that you have left the mall and your vehicle will be less of a target.

-- Spread your shopping over several days. You are away from your vehicle for a shorter period of time each day and shopping is less stressful.

Some items such as fine art are not insured on a replacement value basis because the pieces are one of a kind. Those would have to be "scheduled," or put on a list with the insurance company establishing their value.

The process requires getting an up-to-date appraisal or a sales receipt to prove the value of the item. You will owe no deductible and the item is covered in full if it is lost, stolen or destroyed.

"I always recommend scheduling all highly valuable items," McCummings said. "So, if you are buying an expensive piece of jewelry or the like, have the jeweler fax the appraisal to your agent, who can schedule the item immediately."

But sometimes, even regarding the loss of a Christmas gift, it might even be in your best interest not to collect on a homeowners policy.

McCummings said he has a customer who recently lost a watch valued at $6,000. He did not schedule the watch, but it is covered under his homeowner's policy.

"I told him to go ahead and put in a claim, but he runs the risk of having his policy renewed at a higher rate," McCummings said.

"The total limit on his policy is $3,500 for loss, theft or misplaced values, but it pays no more than $1,000 for any one article.

"His deductible also is $1,000. He could put in a claim and get nothing and end up paying a higher premium rate for at least the next three years. That's why it's best to talk to an insurance agent before you file an insurance claim."