How to Protect Your Black Friday Buys

Introduction

As companies gear up special sales and inventory for Black Friday, shoppers should understand the ability (and limits) of their home and renters insurance. Whether you’re buying a Christmas gift for a loved one or treating yourself to some nifty electronics, you may have more coverage for your new holiday buys than you think. Home and renters insurance also gives you a number of ways to enhance your policy to better protect electronic appliances and expensive valuables. However, you should be aware of the limits to your policy.

Check Your Off-Premises Coverage Limits

Did you know that if somebody breaks into your car and steals your stuff, it’s your homeowners and renters insurance, not your auto insurance, that pays out your theft claim? Comprehensive coverage in auto insurance will pay for damage to your car, but it's homeowners insurance that will reimburse you for the stolen property.

Off-Premises Theft Coverage

Off-premises theft is usually capped at $1000. For instance, if a car thief steals $2500 worth of Black Friday goods from your trunk and your policy has a $1000 deductible, you will still need to cover $1500 of the loss out of pocket (deductible plus the remaining loss amount after the $1000 payout).

Another thing to keep in mind about off-premises theft coverage is it may not cover your personal belongings in certain locations if your insurer deems the area too risky to insure. Off-premises coverage area exclusions are especially common in urban areas with high crime rates. Check with your insurance company to see if off-premises theft is excluded from certain areas.

Image Description: Infographic explaining off-premises theft coverage and its limits.

Insure Your Personal Property at Its Full Replacement Cost

Double-check your policy to see how your personal property is covered. If it’s covered at its replacement cost, great. If it’s covered at its actual cash value, bad.

Replacement Cost Coverage

With replacement cost coverage, your Black Friday buys are covered at their full replacement value — not the sale price or the depreciated value of the stolen or damaged item. That means if you buy a $1200 set of kitchenware with a Black Friday markdown of $600 and it’s stolen or destroyed in a disaster, you get a check for its full replacement value ($1200) rather than the sale price.

Actual Cash Value Coverage

Actual cash value coverage is usually cheaper than replacement cost, but your personal property is only insured at its depreciated value.

Image Description: Comparison between replacement cost coverage and actual cash value coverage.

Consider Equipment Breakdown Coverage for Electronic Appliances

Black Friday is known for massive discounts on electronic appliances. TVs, video game consoles, and speaker systems typically come with warranties, but product warranties don’t always provide enough coverage.

Equipment Breakdown Coverage

Equipment breakdown coverage is a high-value add-on to homeowners and renters policies that covers home systems and appliances if they break down. It has several advantages over a manufacturer warranty: it doesn’t expire, covers more types of breakdowns (such as improper installation), and includes loss of use protection if you need to move out of your home because of a broken furnace or HVAC system.

“It’s a great way to protect expensive appliances if they suffer from a mechanical malfunction such as a power surge,” said Fabio Faschi, property and casualty lead at Policygenius.

You can get equipment breakdown coverage for as little as $25 to $50 a year on top of your home insurance premium.

Image Description: Illustration showing the benefits of equipment breakdown coverage.

Conclusion

Understanding the limits and enhancements of your home and renters insurance can help you protect your Black Friday purchases. Make sure to check your off-premises coverage, consider insuring your personal property at its full replacement cost, and look into equipment breakdown coverage for your electronic appliances. By doing so, you can ensure your holiday buys are well-protected.