Make sure that you insure your Christmas gifts

One of the toughest months in the year, ‘Janu-worry,’ has finally ended. Before you dismiss the last two months entirely and get ready to lose yourself in 2017, have you remembered to add expensive Christmas to your insurance policy?

Too often, families fall into the trap of buying expensive gifts over the festive season and then neglect to include these items under their insurance policy, which could result in costly losses later in the year. You may want to consider contacting your insurer, especially if your Christmas gifts fell in the following categories:

Electronic devices

These would include smart phones, gaming devices, laptops, and tablets, all of which fall into the high-price category. Unfortunately, it is almost a given that at some point, one of these items will fall and break, or get stolen or lost.

Jewellery

Jewellery is on just about every woman’s unspoken wish list. These might be tiny items but the impact on your pocket is usually quite significant, particularly in light of the current gold price.

While you might think taking on an increased insurance premium is not worth the hassle or cost, weigh that against the cost of losing these valuable items and one quickly realises the cost of not insuring them. For example, in the fictional Jones family, the following gifts were purchased this Christmas:

• PlayStation PS4 Pro, 1 terabyte – R6 990
• Raleigh mountain bicycle – R3 499
• Samsung 7 inch, 3G Wi-Fi tablet – R1 990
• Blue and white sapphire earrings set in gold – R1 999

The total value of the goods comes to R14 478, which could be significant if the items were lost or stolen before being insured. Carolyn Thompson, Head of Personal Lines at Mutual & Federal, says the majority of South Africans are underinsured, either on their cars or on their household contents. Having said that, she urges South Africans to make sure that they add their expensive Christmas gifts to their insurance policy.  She pointed out that customers also need to consider that certain items may have limits as to how much insurance cover you can take on them.

According to Thompson, it’s important for customers to weigh up the cost of the item against the excess they will have to pay when they claim. It is also important to remember that when you are insuring items, you should ideally insure them for their replacement cost, rather than current value. For example, if the Jones’ insured their PlayStation 4 for its current value and not for replacement cost and it is stolen in two years’ time, the cost of replacing it is likely to be higher than R6 990.

“When you insure your household contents, you should have drawn up a household inventory that details what you have in each room of your home. This ensures that nothing is overlooked. Ask your broker to add the items you are adding to your policy to your household inventory, so that it is updated.  And, you can keep an electronic copy of your household inventory for record purposes,” concludes Thompson.