Many Kansans are now working on their family holiday gift lists for Christmas. When you are deciding on those gifts that will remain in your home, it is important to know what your existing insurance covers before purchasing additional protection, like an extended warranty.
The Kansas Insurance Department (KID) and the National Association of Insurance Commissioners (NAIC) offer the following tips to help you decide whether you need additional protection.
Find out what your insurance policy already covers. The first thing to check is your homeowners or renters policy. Find out what household items are covered under your existing insurance, and check to see if there are exemptions. Your insurance usually protects against theft or damage, although there may be stipulations about what is covered.
Many homeowners and renters insurance policies cover electronics and other expensive goods up to a certain limit. It’s important to do your research ahead of time so you make financially responsible choices at the register and avoid spending more than you need to.
Ask your insurance agent about coverage amount limits to make sure your new purchases don’t exceed your policy threshold. Certain valuables might be better covered with an insurance rider or additional policy, depending on the circumstances. Your agent can help you assess the benefits and costs when considering this option.
If you are a renter and don’t have renters insurance, you might consider this kind of protection. Although your landlord should have insurance for structural damage to the building, this coverage does not extend to your personal property. The average renter’s insurance policy costs between $15 and $30 per month. Replacing all of your possessions will cost much more.
Understand the difference between insurance and warranties. Part of the holiday shopping experience is the extended warranty promotion at the check-out stand. However, a warranty is not insurance, and it does not cover damage in the way a homeowners or renters policy might.
A manufacturer’s warranty offers a certain kind of guarantee to the quality or performance of an item for a specified time period. Some are lifetime warranties; others are one- or two-year warranties that cover malfunctions or repair needs. Warranties vary by product, model and manufacturer.
In addition, some retailers offer extended warranties that typically extend the original manufacturer’s warranty or provide additional perks and services, such as in-store repair. Unlike a homeowners or renters policy, these warranties do not cover the cost of replacing the item if it is stolen, but some will cover certain kinds of damage or malfunctions to the product.
Update your home inventory. Keep a list of electronics and other valuable household items with model numbers and receipts. As you buy, give away or sell belongings over time, your coverage needs can change. Checking your inventory regularly can help you save money or avoid being under-insured.
A home inventory can also help when filing a claim after a loss. Go to www.ksinsurance.org to download a copy of the KID Personal Home Inventory booklet. You can also use the NAIC smartphone application myHOME Scr.APP.book for your inventory creation.
For More Information
Your existing insurance policies might not cover all possible damages, but it’s important to be informed when weighing the costs and benefits of additional warranties.
If you have questions or are confused about your insurance coverage, contact our Consumer Assistance Hotline (in Kansas), 800-432-2484, or visit our KID website, www.ksinsurance.org.
Here’s to a great holiday season for you and your family.