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Extreme Christmas makeover: Does home insurance cover your outdoor holiday display?

Around the holidays, greedy Grinches strike homes across the country. Among their targets? Holiday yard decorations, such as oversized plastic candy canes, lit-up reindeer, inflatable Santas and even Nativity scenes.

According to media reports, homeowners should be concerned about visits from these Christmas crooks. For example:

• In late November 2011, many of a family's $1,600 worth of outdoor Christmas decorations were stolen from their home in Southern California.

• Around Thanksgiving 2011, thieves swiped plastic candy canes, a 4-foot-high Mickey Mouse, a 4-foot-high polar bear and other outdoor Christmas decorations from a home in Delaware County, Pa. "I know it doesn't sound that bad, but it kind of ruins my kids' Christmas," homeowner Mike Perry told his local newspaper.

• In Columbia, Mo., two University of Missouri fraternity brothers were charged in December 2010 with pilfering more than $500 worth of outdoor Christmas decorations from several homes, including plastic statues of baby Jesus, Mary and Joseph.

home insurance holiday decorations

Is your holiday display covered?

While this kind of thievery can make any homeowner feel like Scrooge, there is reason for some good cheer. If crooks run off with your inflatable snowman or holiday lights or vandals damage them, a standard home insurance or renter's insurance policy typically will cover the losses.

Dan Weedin, an insurance and risk management consultant in Seattle, says outdoor holiday decorations and lights are protected under your home or renter's insurance, just as any other personal property is -- at least up to the limits listed in your policy.

Should you file a claim?

However, not every victim of holiday hijinks will want to file an insurance claim. In 2009, vandals slashed all of the 30 or so Christmas inflatables in the yard of MaryAnn Koch's Illinois yard and crushed a team of animated reindeer. Estimated damage: nearly $2,000. Koch says she didn’t file a claim with her home insurance company because of a high deductible and because she feared her insurance rates would go up.

“There are many instances where you should think twice before turning in a claim,” says Deborah Becker, a State Farm agent in Eau Claire, Wisc. “You should gauge the situation carefully, because the financial reimbursement might not be worth the potential hit you could take in premium rates. The opportunity to recover a few hundred dollars could cost you much more than that in the long run."

If you do file a claim, the process is pretty much the same as if, say, a TV and a laptop were taken from your home.

“Homeowners should keep receipts for holiday decorations and take photos of them," says Ron Moore, senior product manager at MetLife Auto & Home.

"This information should be kept with a larger personal property inventory to help streamline the claims process in the case of a loss. Often at the time of the loss, people have a difficult time remembering all their personal property. Having an inventory can help make the claim process go much smoother and faster."

Is normal wear and tear covered?

Keep in mind that everyday damage to your outdoor holiday decorations, such as normal rips and tears, aren't covered by a standard insurance policy. Diana Turner of Crystal Lake, Ill., learned that the hard way.

“Rodents got in our garage and chewed through lights and other outdoor decorations. We lost several thousands in decorations between what was chewed and what was covered with rodent excrement,” Turner recalls.

If you want your home to be protected beyond the typical coverage for theft, vandalism and fire, you should explore something known as an all-risk policy, Moore says. All-risk coverage costs roughly 10 percent to 25 percent more than standard homeowner's coverage, says Mark Carrasquillo, a personal insurance agent with E.G. Bowman Co. Inc., an insurance brokerage in New York City. Not all insurers sell all-risk coverage, though.

What happens if there's a fire?

Aside from being targets of theft, vandalism and everyday damage, holiday displays are fire hazards.

Holiday lights and other decorative lights were involved in about 150 home fires each year from 2005 to 2009, according to the National Fire Protection Association. Almost half of those fires were reported in December. Those fires caused an average of $8.5 million in property damage each year, along with an average of eight deaths.

If your Christmas lights spark a blaze or some other fire-related decoration mishap occurs, you're generally covered by a standard home or renter's insurance policy. However, a fire claim could bump up your insurance rates.

“All those huge displays with electrical outlets all over the pace add more exposure than just higher energy bills. If any of them are damaged, frayed or just bad, a fire ... is a real concern,” Weedin says.

Weedin’s advice: "Decorate with care and follow all of the manufacturer’s safety guidelines to reduce your chances of a tragedy.”

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